Trip Cancellation Insurance

How Does Trip Cancellation Insurance Work?

Trip Cancellation Insurance typically comes included with comprehensive travel insurance policies.

This coverage can reimburse up to 100% of your trip cost, including non-refundable bookings for airfare, lodgings, tours and excursions, rental cars, trains, and more.

The trip cancellation coverage is typically triggered if you’re forced to cancel your trip due to a sudden, unforeseen, and uncontrollable event as outlined by your specific policy’s coverage.

Keep in mind that cancellation coverage is a pre-departure benefit that typically starts the day after you purchase your policy and ends on the day you leave for your trip. After this date, Trip Interruption coverage typically takes over.

One important caveat to note about Trip Cancellation coverage is that it only reimburses prepaid, non-refundable trip costs. This means that all payments must be finalized and paid for at the time of making an insurance claim, and any eligible refunds you receive from your original bookings, like an airline-issued refund for cancelling your flight, will be discounted from your insurance provider’s total payout.

Keep in mind that not all travel insurance policies include Trip Cancellation coverage, as is the case with many medical-only travel insurance policies.

What Does Trip Cancellation Cover & Not Cover?

Trip Cancellation insurance protects against unexpected events out of your control, rather than cancellations due to convenience or a sudden change of heart.

To qualify for reimbursement through this benefit, the reason for cancelling your trip must be explicitly listed in your policy.

Common Covered Reasons	Common Exclusions
Illness, injury, or death of you, a traveling companion, or a family member Inclement weather or natural disasters that prevent travel Terrorist attack at your destination Unexpected job loss or layoff Jury duty or other legal obligations Your travel supplier ceasing or suspending operations	Foreseeable or known events* Pre-existing medical conditions* Pregnancy, childbirth, and fertility treatments* Self-inflicted injuries, such as intentional self-harm or substance abuse Acts of war or declarations of war Changing your mind or cancelling on a whim Fear of travel

Exceptions for Commonly Excluded Scenarios*

Certain plans may offer coverage for scenarios related to some common exclusions.

Cancel for Any Reason Coverage for Foreseen Events

Over a third of travel insurance policies on Squaremouth offer Cancel for Any Reason as an optional add-on to eligible travelers, which allows you to cancel your trip for any reason at all and still receive compensation. This benefit provides partial reimbursement, typically between 50%-75%, if you choose to cancel for a reason not covered by your plan. This includes cancellation reasons that are excluded by your plan.

For example, with CFAR, you can cancel your trip because you changed your mind and no longer want to travel, and still be reimbursed for some of your prepaid, non-refundable expenses.

Pre-Existing Condition Coverage Waiver

Most standard travel insurance plans don’t cover financial loss related to a pre-existing medical condition, such as heart disease, diabetes, or cancer. However, some plans offer a pre-existing condition waiver, which removes this exclusion, allowing you to be reimbursed if a flare-up of an existing health issue forces you to cancel your trip.

To qualify for this coverage, you must meet your policy’s specific eligibility requirements. To learn more about these requirements and how pre-existing condition coverage works, visit our Pre-Existing Condition benefit page.

Pregnancy Emergencies

While normal pregnancy procedures, routine checkups, and childbirth are often excluded from coverage, some plans do offer protection if you experience a pregnancy complication that causes you to cancel your trip. Additionally, certain policies may cover cancellation if you become pregnant after purchasing your policy and are advised by a doctor not to travel due to medical reasons or if the destination poses a health risk to your pregnancy.

How Much Is Trip Cancellation Insurance?

Trip Cancellation coverage is typically only available as part of comprehensive travel insurance plans, which are more expensive than medical-only travel insurance policies.

Comprehensive coverage usually costs between 4%-10% of your total insured travel expenses. At the time of writing, the average cost of travel insurance with Trip Cancellation coverage is $30 per day for Squaremouth customers.

This is based on internal sales data from travelers who used Squaremouth to protect their trips over the last 12 months. The average traveler spent $414 on comprehensive travel insurance with an average trip length of 14 days. If you add optional CFAR protection to your plan, you can expect your premium to increase by 40-50%.

Do I Need Trip Cancellation Insurance?

Trip Cancellation protection may not be necessary for all types of trips, especially for things like cheap or nearby weekend getaways. However, this benefit is especially useful for expensive trips and trips with complex itineraries or many moving parts.

That said, claims data from Tin Leg Travel Insurance shows that roughly 25% of all travel insurance claims are due to trip cancellations.

We typically recommend policies with Trip Cancellation to the following:

• Travelers with high prepaid, non-refundable costs
• Those with unpredictable health or family obligations
• People traveling during hurricane season or winter weather
• Travelers booking group trips, cruises, or tours
• Anyone who wants peace of mind before departure

How Much Money Could Trip Cancellation Coverage Save You?

Trip Cancellation Insurance can reimburse up to 100% of your trip costs, so the total amount your plan can save you depends on how much your trip costs you.

Squaremouth customers insure roughly $7,000 on average per trip. This includes airfare, hotel reservations, tour bookings, and other non-refundable trip payments for all travelers listed on the policy.

Real-world Example

Imagine you and your family are planning a trip to the Bahamas that includes $7,000 in non-refundable trip costs, made up of $3,000 in airfare, $3,000 in hotel bookings, and $1,000 on miscellaneous excursions. However, just before you depart, a hurricane begins forming in the Atlantic Ocean and makes landfall at your destination, forcing airports and hotels to close.

After cancelling your trip, your airline partially reimburses you for $1500 of airfare, but the rest of your bookings issue you no refunds.

Without Trip Cancellation coverage, you would stand to lose all of the $5,500 remaining unrefunded expenses you paid towards your trip. However, thanks to Trip Cancellation coverage, you file a claim and request reimbursement. Due to the $1,500 refund you received from your airline, your travel insurance provider deducts this from the amount it owes you. They then issue you a $5,500 reimbursement for your remaining lost expenses.

In this way, you can recoup all $7,000 you lost due to severe weather cancelling your trip.

Types of Trip Cancellation Coverage to Look For

When purchasing a travel insurance policy, it’s important to understand that Trip Cancellation is an overarching benefit that is made up of various sub-benefits. Depending on the policy you choose, you may get access to more or fewer covered reasons for cancelling your trip.

Standard Trip Cancellation insurance is primarily geared to Cancellations for Medical Reasons coverage and provides reimbursement if you’re forced to cancel your trip due to an unexpected illness, injury, or death.

This often applies to you, your travel companion, or a non-traveling family member. All injuries and illnesses must be confirmed by a physician and be severe enough to make travel unsafe. Roughly 75% of policies on Squaremouth include this protection.

Most Trip Cancellation policies are made up of a handful of additional sub-benefits, such as the ones listed below. It’s important to read through your policy documentation to ensure the plan you select has the necessary coverage for your needs.

Cancel for Severe Weather & Natural Disasters

Cancel for Hurricane & Weather coverage reimburses you for cancellations due to severe weather events, such as hurricanes, flooding, and tropical storms, that prevent travel or render your accommodations uninhabitable. This benefit is included in roughly 78% of policies on Squaremouth.

Cancel Due to Terror Attacks & Terror Threats

Cancel for Terrorism can reimburse you if you are forced to cancel due to a terrorist attack in or near a city listed on your travel itinerary. This benefit is available in approximately 73% of policies on Squaremouth.

Cancel for Catching COVID-19

Cancel for COVID-19 Sickness covers cancellations due to contracting COVID-19 or another covered pandemic leading up to a trip. This coverage is included in roughly 67% of plans on our site.

Cancel Due to Travel Supplier Ceasing Operations

Cancel for Financial Default offers cancellation reimbursement if your travel supplier, such as an airline or cruise line, goes bankrupt and suddenly ceases operations. This coverage is found in roughly 59% of plans on our site.

Cancel Due to Being Laid Off

Cancel for Employment Layoff provides financial protection if you cancel your trip due to an involuntary termination of employment. Some plans require a minimum employment length to be eligible for coverage. This benefit is included in roughly 58% of plans on Squaremouth.

Cancel for Work Reasons

Cancel for Work Reasons protects against cancellations due to unexpected work obligations, such as your PTO being revoked or a transfer to a new location that requires you to move. This protection is available in roughly 30% of plans on our site.

Cancellation for Any Reason

Cancel for Any Reason is an optional add-on that provides partial reimbursement of your trip costs if you decide to cancel your trip for a reason not already covered by your plan. This add-on is available in roughly 36% of plans on Squaremouth.

If you want to see plans offering these types of protection, our online quote tool allows you to select and filter policies based on these benefits and more.

How Do I Use Trip Cancellation Coverage?

If you run into a scenario such as the ones listed above, you may be wondering how to use your cancellation coverage.

To be reimbursed through your travel insurance policy’s Trip Cancellation benefit, you’ll need to cancel your trip in its entirety and file a claim directly with your provider.

If you plan on cancelling your trip for a reason that’s covered by your plan, here’s how to proceed:

1. Confirm Your Coverage: Review policy documentation to confirm that your policy includes Trip Cancellation coverage, and that your reason for cancelling your trip is eligible for reimbursement. If you can’t find this information, you can also contact your provider’s 24 Hour Emergency Assistance line for further guidance.
2. Reach Out to Your Travel Suppliers: Before cancelling your trip, see if your airline, cruise line, hotel, tour operator, etc. can provide you with travel credits, refunds, or rescheduling options. Some travel insurance companies may require this step before you file a claim.
3. Cancel Your Trip Bookings: To be eligible for reimbursement, you must cancel all of your trip bookings either online or by phone. Be sure you receive records of your cancellation, as this documentation will be required when filing your claim.
4. Contact Your Provider: Once your trip is cancelled, contact your insurer to inform them of your trip cancellation and initiate your claim. Most claims can be completed online, where you can upload supporting documentation.
5. File a Claim: Your claims form will include space for you to explain your cancellation reason and provide evidence to support it. This can include doctors’ notes, weather warnings, work notices, and more. Trip Cancellation claims typically take 4-6 weeks to process.

---

FAQs: Trip Cancellation Insurance

How Does Cancellation Coverage Work If One Family Member Is Sick?

Trip Cancellation travel insurance provides a wide range of protection for family members who fall ill before a trip. If the family member is insured on the policy, all travelers are eligible to cancel their trip and be reimbursed for their prepaid, non-refundable trip costs.

Some Trip Cancellation policies will also cover cancellations if a non-traveling family member gets sick before your scheduled departure date. In most cases, the non-traveling family member’s condition must be life-threatening or require hospitalization for coverage to apply. Some policies also cover cancellations if you are the primary caregiver to the injured or ill family member.

In any case, you are required to provide documentation that supports your cancellation due to medical reasons, such as a note from a physician or medical records.

Are There Exclusions In Trip Cancellation Coverage I Should Know About?

Yes, most travel cancellation insurance plans feature exclusions. While they can vary by plan, most policies will not reimburse you if you cancel for one of the following reasons:

• Foreseeable Events: Cancellations due to events that were known at the time of purchasing a plan, such as an already-announced airline strike, named storm, or terrorist attack.
• Pre-Existing Conditions: Cancelling your trip due to a health issue that existed before purchasing your policy (unless your policy includes a pre-existing medical condition waiver)
• Self-inflicted Injuries: Cancellations due to injuries stemming from intentional self-harm, substance abuse, or attempted suicide.
• Acts of War: Cancellations due to military duty, a declaration of war, or an act of war that occurs at your destination.
• Pregnancy: Cancellations due to normal pregnancy, childbirth, fertility treatments, or elective abortions.
• Change of Mind: Deciding not to travel due to conflicting plans, unfavorable weather conditions, or other uncovered reasons.
• Fear of Travel: Opting out of your covered trip out of fear of contracting an illness while traveling.
• Lack of Documentation: Failing to provide required proof, like a doctor’s note or airline cancellation notice, can result in a denied claim.

Will Travel Insurance Reimburse Me If My Flight Is Cancelled for A COVID-19 Reason?

If your flight is cancelled due to COVID-19, you may be eligible for Trip Cancellation reimbursement as long as your policy includes COVID-19 coverage and you meet your policy’s requirements for delay-related cancellations. In most cases, Trip Cancellation applies after your trip has been delayed for more than 24 hours.

Fortunately, all travel insurance providers on Squaremouth currently treat COVID-19 as a normal illness, and COVID-19 cancellations typically fall under the Cancel for Medical Reasons sub-benefit.

Flight delays and cancellations often fall under the Travel Delay benefit, which can reimburse you for meals, accommodation, and local transportation expenses while you wait for your new departure time.

How Do I Find Quick Trip Cancellation Insurance For Unexpected Plans?

The best way to find a policy that offers Trip Cancellation coverage is to use a travel insurance comparison website like Squaremouth. Our comparison platform makes it easy to get Trip Cancellation quotes from the nation’s top providers and compare coverage side-by-side. Using a comparison site can save you a lot of time and help you find the perfect plan for your specific trip.

How Soon Do You Need to Purchase Cancellation Coverage Before A Trip?

As a rule of thumb, you should buy comprehensive travel insurance as soon as you make your initial trip deposit. In most cases, this will be the purchase of airline tickets or a hotel stay. Purchasing your policy early comes with multiple benefits.

First, it maximizes your coverage period and protects you from any number of covered disruptions that occur leading up to your trip. If you wait to buy your policy, you run the risk of not being covered when a cancellation-worthy event occurs, such as a natural disaster or unexpected illness.

Secondly, many travel insurance policies include time-sensitive benefits, like Pre-Existing Condition coverage and CFAR, that are only available to travelers who purchase their coverage within a certain period of time after making their initial trip payment. This time-sensitive window varies by plan, but generally lasts 10-21 days after your trip deposit date.

Trip Cancellation Insurance for Last-Minute Travel Plans: Is It Worth It?

Trip Cancellation coverage generally goes into effect the day after you purchase your policy. So we recommend purchasing comprehensive coverage at least a few days before your departure date.

If you’re planning a trip at the last minute, a policy that includes Trip Cancellation coverage may still be worth the cost. Even if you purchase your policy just a week before you depart for your trip, there’s still a chance you encounter a disruption that forces you to cancel your trip. Having this coverage can provide peace of mind if your trip involves significant non-refundable travel expenses.

In addition to Trip Cancellation, most comprehensive plans also include Trip Interruption insurance. This coverage begins once you depart for your trip, and covers your unused travel expenses if you’re forced to cut your trip short for a covered reason. This can provide crucial financial protection while you’re away from home.

How Much Does It Cost to Add Cancellation Insurance to A Flight?

Adding Trip Cancellation coverage to a flight is relatively easy, and can be affordable if you only plan to insure your non-refundable airfare. As mentioned above, comprehensive travel insurance generally costs between 4%-10% of your prepaid, non-refundable travel expenses. These policies include flight cancellation insurance coverage.

As an example, if you were to insure a $500 flight, you can expect to pay between $20 – $50 for a policy that includes Trip Cancellation coverage.

Can I Get A Refund On Travel Insurance If I Cancel My Trip?

In general, travel insurance premiums are not refundable unless you cancel your policy within the plan’s Free Look Period. Travel insurance premiums are not covered by your policy and will not be reimbursed if you file a travel cancellation claim through your provider.

How Do I Cancel Travel Insurance If My Trip Is Canceled?

Most providers allow you to cancel your travel insurance online or over the phone.

To be eligible for a full refund from your provider, you typically need to cancel your travel insurance policy within your plan’s Free Look Period. In most cases, your free look period will last 10-15 days after you purchase a policy. If you cancel your policy outside of this window, you likely won’t be eligible for a refund.

Can Credit Cards Cover Trip Cancellations?

Yes, many travel credit cards offer a range of trip protection benefits to support cardholders while they are away from home. These benefits typically include Trip Cancellation, Trip Interruption, Trip Delay, and Baggage Loss protection.

However, this protection is not seen as a replacement for travel insurance since protection is generally limited to purchases made using the credit card. In addition, credit card insurance rarely includes medical coverage or coverage for medical evacuations.

What is the Difference Between Trip Cancellation and Travel Delay Coverage?

Trip Cancellation is designed to protect the money you spend on your trip if you are unable to travel at all for a covered reason, such as an illness or injury or a significant weather-related flight disruption. Travel Delay is designed to protect you from unexpected expenses during a temporary delay, and covers the cost of meals and accommodations.

---

Please be aware that coverage and eligibility requirements for this benefit differ by policy.