Trip Cancellation Insurance: What’s Covered and What Is Not?

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Trip Cancellation insurance can cover travelers for 100% of their prepaid and nonrefundable trip expenses if they need to cancel for a reason that’s specifically listed by their policy. The most common covered reason to cancel a trip under the Trip Cancellation benefit is an illness, injury, or death.

However, there are many other events covered under the Trip Cancellation benefit. Travel insurance comparison site, Squaremouth, explains what can be covered and what is not covered by Trip Cancellation insurance.

What Does Trip Cancellation Insurance Cover?

Trip Cancellation insurance can cover travelers for unforeseen events that prevent them from taking their trip. Below are the reasons that may be covered by the Trip Cancellation benefit:

  • Illness, injury, or death – you can be covered if you, a traveling companion, or family member become sick or injured, preventing you from taking your trip
  • Hurricane and weather – you can be covered in inclement weather significantly delays or cancels your trip, damages your destination, or forces an evacuation at your destination
  • Terrorism – you can be covered in the event of a terrorist attack at or near your destination
  • Financial default – you can be covered if your airline, cruise line, or other common carrier go into financial default
  • Employment layoff – you can be covered if you are unexpectedly let go or fired from a job, as long as you have been there for at least 1-3 years, depending on the policy
  • Work time off revoked – you can be covered if your pre-approved time off from work is revoked due to job obligations

How Much Does Trip Cancellation Insurance Cost?

This year, the average cost of a cancellation-style travel insurance policy is $352. However, this price depends on three main factors: total trip cost, age of the travelers, and length of the trip. Typically, a cancellation-style policy will cost between 5% and 10% of your total trip cost.

Trip Cancellation-style polices are more expensive than policies without because the risk in covering a traveler’s entire trip cost. Aside from Trip Cancellation, however, these policies typically include the same benefits.

What if I Want to Cancel for a Reason Not Listed?

After reviewing the list of covered reasons under the Trip Cancellation benefit, some travelers still have concerns that something else may occur. For these travelers, the Cancel For Any Reason upgrade is the best option.

Cancel For Any Reason will typically add about 40-50% to a policy’s premium. However it will give you the flexibility to cancel for a reason that is not otherwise listed by you policy. These reasons can include fear of traveling to a destination after a terrorist attack or simply not wanting to go.

In order to be eligible for Cancel For Any Reason coverage, you must meet the following requirements:

  • Purchase your policy within 14-21 days of making your initial trip deposit
  • Insure 100% of your prepaid and non-refundable trip expenses

As long as you cancel your trip at least 2-3 days before your departure date, you can reimbursed up to 75% of your trip costs.