Most travel insurance plans cover trip cancellation and trip interruption. If, for a covered reason, the traveler is unable to take or continue their trip, travel insurance will reimburse the unused and non-refundable trip cost. TravelSafe provides a little more detail on the FAQ section of their website.
I don’t have travel insurance, but something just happened that forces me to cancel my trip. Can I buy your insurance to cover my trip cost, then file a claim to get my money back?
No! Someone doing this would be committing a criminal offense – insurance fraud. Travel insurance generally covers unforeseen circumstances which can occur after your policy is in effect. If you’re even thinking about trying to commit insurance fraud, we urge you to reconsider and remember that the consequences are very severe.
Trip cancellation is meant to cover unforeseen and uncontrollable events that affect travel plans. Most commonly this is a sickness of a traveler, death in the family, employment layoff and severe weather. If an event has already occurred, it is too late to purchase a policy and file a claim for that event. For example, once a tropical storm is named, a new policy will not cover that storm. Always refer to the certificate of insurance for details.
Source: TravelSafe FAQ