Travel Insurance FAQ

Do I Have to Insure the Total Trip Cost if I’ve Only Paid a Deposit?

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Travel insurance can provide relief for travelers that must cancel their trip and forfeit their vacation investment.  The trip cost should include all pre-paid and non-refundable costs associated with that trip.  This can include flights, lodging, cruises and tours.  When the traveler has only paid a deposit and wants to get travel insurance before the trip is paid for, then there are two options of how to calculate the trip cost.

The traveler can insure the total trip cost in advance, before that actual amount has been paid and is at risk.  If that amount is unknown, then they have the option to round up.  Doing this runs the risk of insuring too much trip cost, meaning that the cost of the travel insurance premium could have been lower.  The advantage is that there is no need to update the policy every time a new payment is made towards the trip.

Alternatively,  a policy can be issued for the amount of trip cost that is already invested and updated as new costs are incurred.  This is important to understand when getting a travel insurance policy to cover pre-existing conditions or cancel for any reason.  Both of those coverage benefits normally require that the policy be purchased within a set amount of time from the initial deposit date and that the trip cost include all pre-paid and non-refundable expenses.  This means that the trip cost on the policy must be increased in order to to keep that coverage.  If the new trip cost results in a difference of premium, then it can be paid at that time.

Always refer to the certificate of insurance for details.