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What Is Trip Cancellation Insurance And What Does It Cover?

by Martha Simmonds
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When you are moving abroad or you go on vacation, travel insurance is necessary to cover you for a range of things. Not only does your travel insurance come in handy when your luggage gets lost or damaged but it also covers you for trip cancellation.

If your trip gets cancelled, the costs of your holiday may be covered up to a specific amount by your travel insurance provider. The same applies if you have to cancel your holiday at the last minute due to illness or changes to your personal circumstances.

The amount of coverage that you get depends on the type of policy that you have chosen. There are different levels of coverage that you can choose when you sign up for travel insurance, so it’s important to get the right type of policy for your needs.

We’ve put together a simple guide that will walk you through everything that you need to know about trip cancellation. We’re going to cover what trip cancellation insurance is, what it covers, what it doesn’t cover, and how you can claim for holiday cancellations.

What Is Trip Cancellation Insurance?

Most travel insurance policies cover trip cancellations part of the package. However, it’s always important to check with the travel insurance company to ensure that trip cancellation is included in the package that you are purchasing.

What Does Trip Cancellation Insurance Cover?

Trip cancellation insurance doesn’t cover you if you change your mind about going on holiday and want to cancel. It covers you for unavoidable or unforeseen circumstances that result in changes to your trip.

It covers you for the costs associated with the cancellation of one or more parts of your holiday. You may need to cancel your trip due to a variety of reasons, including:

  • Injuries or illnesses to yourself or your family that make you unable to travel
  • Changes in the destination country that makes traveling there unsafe
  • Fires, floods, or other natural disasters
  • Being called for jury
  • Bereavement or funeral attendance

Your insurance policy may cover the costs of your plane tickets, hotel or hostel, and pre-booked excursions and tours.

Since 2020, many travel insurance companies have added covid-19-related issues to their plans. This is likely to be a permanent fixture in travel insurance plans going forward.

Some insurance companies provide cover for holiday cancellations resulting from positive covid-19 tests leading up to the date of travel. However, very few companies cover you if you are unable to board the plane due to your positive test.

If you want covid-19 coverage as part of your trip cancellation insurance, make sure to double-check if your provider offers this as an option.

What Does Trip Cancellation Insurance Not Cover?

There are a few things that will not be covered in your insurance policy. For obvious reasons, you won’t get reimbursed for your winter or summer vacation if you change your mind at the last minute.

You also won’t get any money back for the following:

  • Not being able to take your trip because of a pre-existing medical condition that you did not previously declare to the travel insurance company
  • Getting ill or injured while being under the influence of alcohol or drugs
  • Your airline cancelling your flights – this will usually be compensated by the airline company themselves

Although cancellations to your flight aren’t covered by the travel insurance company, they may cover some of the costs if your airline is unable to refund you or if your flight gets delayed by more than 24 hours.

Do You Need Trip Cancellation Insurance?

Most travel insurance companies cover trip cancellation as part of their policies. However, it’s something that you will need to double-check if you’re unsure. Some providers offer trip cancellation as a separate add-on to their basic policies.

The idea of your trip being cancelled might seem unlikely but it happens more often than you’d like to think. By getting trip cancellation insurance or a travel insurance policy that covers cancellation, you can have peace of mind knowing that you will be reimbursed if your holiday is cancelled.

How Much Money Will You Be Reimbursed With Trip Cancellation Insurance?

The exact amount of money that you will receive from the travel insurance company after trip cancellation depends on a number of things. The policy that you have chosen and the level of coverage that you have are significant factors, and reimbursement costs also depend on the insurance provider.

Most trip cancellation policies cover between £1,000 to £5,000 ($1,300 to $6,500). If you’ve chosen a high level of coverage, you’ll pay more for your insurance but you will also receive a higher reimbursement if your holiday gets cancelled. Some people prefer to take the risk and get a cheaper insurance policy in the hopes that their trip won’t get cancelled.

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