Trip cancellation insurance is a must-have if you want to protect the money you’re spending on flights, accommodations, and tours at your destination. Trip cancellation guarantees that if you cancel your trip for a covered reason, you can be reimbursed 100% of your trip expenses!

Are you a traveler on the edge about trip cancellation insurance? Are you not sure what it is but want to learn if it is worth it?

This article will teach you what trip cancellation coverage is, what it covers, what it doesn’t, when to buy it, how to upgrade, and which providers offer the best trip cancellation benefits.

We even have some bonus sections about other benefits of a travel insurance plan and how natural disasters can affect your trip.

As you read, you’ll undoubtedly find you have some questions. Please reach out to our insurance experts online or by calling us at +852-3113-1331.

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Trip Cancellation Coverage in Case You Can’t Travel

Natural disasters, injuries, sicknesses, and emergency situations can be hard to predict, that’s why securing trip cancellation insurance for your trip is essential. A trip cancellation benefit protects you from financial loss in the event you must cancel your trip before you’ve departed.

There are many reasons why you might become unable to go on a trip, but there are some prepaid travel expenses you can’t get refunded for, such as trip deposits, accommodations, and flight change fees. Getting trip cancellation insurance will insure those expenses so you can get money back.

Trip cancellation is different from trip interruption insurance which covers your financial investments in the event you must interrupt your trip and return home early after you’ve already left.

What is Trip Cancellation Insurance?

Trip cancellation insurance is a travel insurance benefit that reimburses you for qualifying money you’ve already spent on your trip if you need to cancel your travels before leaving. You can receive compensation for prepaid, non-refundable travel expenses such as flights, hotels, and tours.

Trip cancellation typically is purchased as one benefit lumped in a package of travel insurance that includes other benefits, such as trip interruption, trip delay, personal belongings and lost luggage, and emergency medical coverage.

It is super important to note that some trip cancellation policies will have a rule that states you must cancel your trip no later than 72 hours before your planned departure. Included in this rule is that you must notify all your travel suppliers within 72 hours of canceling or you won’t get reimbursed.

That means you should contact your hotels, tour operators, airlines, etc. within 72 hours of canceling your trip.

What is Covered by Trip Cancellation

Many trip cancellation policies will reimburse you up to 100% of your trip costs which may include your:

• Tickets to travel by flight, bus, cruise, rental car, boat, train, etc.
• Hotel or sleeping accommodations for the duration of your stay
• Tour bookings at your destination
• Trip deposits
• Flight change fees
• Other nonrefundable reservations

So long as you cancel your trip for a covered reason, you should get back a lot if not all of the money you invested into the trip before you left.

When it is Worth it to Get Trip Cancellation Insurance

Trip cancellation insurance may be worth purchasing when you can’t afford to lose all the money you’ve invested in your trip. Find the sum of your traveling fees, accommodations, and prepaid, nonrefundable activities. Can you live with watching 100% of that money go down the drain?

If not, spending a few extra bucks to get it all insured might just be worth it. In the end, though, whether or not it is the right choice is really up to you.

To help you make that decision, let’s talk about what you’ll get back if you do end up canceling your trip, reasons that qualify you to cancel your trip, common natural disasters around the globe that may affect your travels, and when you should buy your trip cancellation insurance.

Benefits You Can Receive Back if You Cancel Your Trip

When travelers cancel their trip for an insured reason, they will be reimbursed a portion or all of their pre-paid, nonrefundable trip expenses. To give you an idea of what your travel insurance benefits may look like, consider the benefits included in Allianz Travel’s OneTrip Prime plan.

In this scenario, we’ll discuss a USD $4,000 trip to Thailand for 1 week. Your travel insurance plan will cost about $207.

With this plan, you will be reimbursed the following amounts:

• Trip cancellation up to $100,000
• Trip interruption up to $150,000
• Trip change protector up to $500
• Emergency medical up to $50,000
• Emergency medical transportation up to $500,000
• Lost/damaged baggage $1000
• Baggage delay $300
• Travel delay $800 (daily limit $200)
• SmartBenefits $100 per insured person per day

All plans vary, so you will want to select a plan that has a trip cancellation benefit limit that insures all of your trip expenses. One of the biggest mistakes we see travelers make is selecting a plan with a trip cancellation limit that doesn’t insure their full trip investments.

Situations When the Cost of Your Trip is Covered

Some of the covered reasons for when the costs of your trip qualify for reimbursement include death, injury, or illness of you, a family member, a traveling companion, or a business partner, natural disasters at home or your destination, and if your transportation closes (such as airports and buses).

Let’s look at a detailed list below of common qualifying reasons for why you might need to cancel your trip that allows for trip cancellation coverage.

When Trip Cancellation Kicks In:

• Death, injury, or illness of you, a family member, a travel companion, or a business partner
• Diagnosis of a serious, unforeseeable medical condition that prevents you from traveling
• Complications from pregnancy
• Natural disasters at home or your destination
• If your destination becomes uninhabitable because of a fire, flood, burglary, or vandalism
• Severe weather at your destination
• Mechanical breakdowns
• Airport shutdowns
• Strikes in your transportation methods (for at least 12 straight hours)
• If public transportation to your destination is canceled
• Being called to jury duty or appearing as a witness in court
• If you or a traveling companion legally separates or gets divorced after your insurance coverage starts but before you’ve left on your trip
• Terrorist attacks occur within 30 days of when you’re scheduled to travel
• If you or your traveling companion are hijacked or quarantined
• If you get laid off or terminated from your job (you must have worked there for at least 3 consecutive years)
• If government authorities prohibit the activities you intended to do at your destination
• If you are required to move your primary residence because of a job transfer
• You or your traveling companion are the victims of a felonious assault within 10 days of your intended departure
• You get into a traffic accident on the way to your trip
• If you, your traveling companion, or a family member are called to emergency military duty or duty for a natural disaster
• If you’re a military personnel who is deployed or has your leave revoked
• If your sports equipment is delayed for 12 hours or more so you don’t be able to participate in your planned hunting, fishing, or sports activities at your destination
• You need to attend the birth of a family member’s child
• Other legal obligations

Common Natural Disasters by Region of the Globe

Among the common natural disasters in Europe are floods and storms, in Central Asia it’s earthquakes and landslides, and in Central America, it’s hurricanes and tropical storms. The Asia-Pacific is a region that is the most prone to natural disasters, getting hit by floods, tsunamis, and earthquakes.

Travelers heading to China, the Philippines, Indonesia, Japan, and Vietnam will want to take special care in the event of a natural disaster canceling or interrupting their trip.

When deciding whether or not it is worth it to purchase trip cancellation insurance, travelers will want to be familiar with which natural disasters hit their destination, what season of the year they must happen, and how frequently they occur.

The following chart details the most common natural disasters found in each region of the world to get your research started. 

Travelers will also want to read about the most common infectious diseases travelers get abroad and how to prevent them.

When to Secure Trip Cancellation Coverage for Your Trip

The best time to secure trip cancellation insurance for your trip is as soon as you have made travel arrangements. Securing your plan early on can ensure that if something disrupts your plans before you embark on your trip, such as a natural disaster, you will still be covered.

The earlier you purchase your travel insurance plan, the longer you will have coverage before your departure, so if you want to get the most value out of your trip cancellation coverage, it is in your best interest to get insurance as soon as you begin paying for travel expenses.

What Trip Cancellation Does Not Cover: Foreseeable Events

Trip cancellation insurance will not cover you for known, foreseeable, or expected events that interfere with your travels. If you can predict an epidemic, government prohibition, travel advisory not to travel, or any other scenario, it is significantly less likely to be insured.

A good rule of thumb to ask yourself is if you are buying travel insurance because you think you may need to cancel your trip for X reason, then you have a foreseeable event ahead that renders your trip cancellation benefit ineffective.

It’s important to note that some trip cancellation policies have a clause that requires you to cancel your trip at least 72 hours before your planned departure in order to receive reimbursement. 

Some policies will still insure you after that deadline, but only if you have one of the qualifying covered reasons listed above.

Below is a list of likely exclusions that your trip cancellation coverage will not insure.

Exclusions of Trip Cancellation Coverage

• Deciding not to go on vacation anymore
• Acts of war and terrorism
• Any elective medical procedure
• Injuries or conditions suffered by the insured caused by intentional harm, participation in extreme sports, mental health disorders, and alcohol or illicit substances
• Routine pregnancy needs, such as doctor’s checkups or fertility treatments
• Storms and natural disasters that have already been named before your departure date
• If you don’t see a doctor before canceling your trip and therefore you don’t receive medical advice to not travel
• Not providing the correct documentation of your trip expenses and/or your cancellation reasons
• Purchasing travel insurance after a storm has already been predicted to hit your destination location
• Trying to cancel for traveling delays before you’ve hit the expectancy of arriving at your destination a minimum of 24 hours later than your originally scheduled time
• Not fully reading or understanding the nuances of which reasons are covered for cancellation
• Irresponsible or high-risk behaviors
• Certain medical issues, such as traveling outside your doctor’s medical advice. Some pre-existing medical conditions, or traveling for the purpose of receiving medical treatment

Consider Getting Cancel for Any Reason (CFAR) Insurance

Cancel for Any Reason (CFAR) insurance is a travel insurance benefit that lets you cancel a trip for any reason at all and still receive reimbursement for your pre-paid nonrefundable travel expenses. Cancel for Any Reason is typically sold as an optional benefit that you must add to your plan.

If you’re concerned about needing to cancel your trip but worry your reasons won’t be accepted as typical qualifying reasons, you can expand your cancellation insurance with this comprehensive benefit.

If you’re simply worried about circumstances outside of your control canceling your trip, such as extreme weather or a sudden death in the family, standard trip cancellation insurance should be enough.

If you’re worried about foreseeable events you can predict that are likely to cancel your travels, Cancel for Any Reason may be the right choice for you.

Our Trip Cancellation Insurance Recommendations

We highly recommend the plans offered by IMG, Allianz Travel, Trawick, and World Nomads when selecting trip cancellation insurance. We also recommend checking out April International and MSH International.

If you plan to go on multiple trips within the same year, consider the best annual travel insurance providers with trip cancellation coverage.

If you want to have strong healthcare benefits with your plan, read our top 5 recommended travel insurance providers with medical benefits.

Best Insurance with Trip Cancellation for U.S. Citizens

We recommend that U.S. citizens who are looking for trip cancellation coverage consider the plans by IMG and Trawick.

IMG: iTravelInsured Trip Cancellation Insurance

IMG offers three travel insurance plans with trip cancellation, and all three of them insure up to 100% of your non-refundable trip costs. They also include other benefits with varying levels of coverage. Their plans are:

• iTravelInsured Lite

• iTravelInsured SE

• iTravelInsured LX

Trawick: Safe Travels Voyager

Trawick’s Safe Travels Voyager plan includes trip cancellation with 100% coverage of trip costs up to $100,000.

Best Insurance with Trip Cancellation for All Travelers

All travelers, including those from the U.S. and other countries, should consider getting trip cancellation coverage from Allianz Travel and World Nomads.

Allianz Travel: 9 Travel Insurance Options

Allianz Travel offers 5 single-trip travel insurance plans and 4 multi-trip plans. All of them are stellar and include other travel benefits as well. We’ll list some of their plans and trip cancellation benefits below.

Their OneTrip Cancellation Plus plan is the most affordable way to have cancellation and trip interruption without post-departure benefits.

• OneTrip Prime: $100,000
• OneTrip Basic: $10,000
• OneTrip Premier: $200,000
• OneTrip Cancellation Plus: $5,000
• AllTrips Premier: $2,000 – $15,000
• AllTrips Executive: $5,000 – $10,000
• AllTrips Prime: $3,000

World Nomads: Travel Insurance

World Nomads offers a travel insurance plan for U.S. citizens that offers trip protection for cancellation up to USD $2,500 on the Standard plan or USD $10,000 on the Explorer plan. They also offer some of the best extreme sports coverage on the market.

Additional Benefits that Come With Travel Insurance

Travel insurance is an insurance policy designed to give you coverage over things that could go wrong during your travels. Trip cancellation is one type of benefit included in a travel plan, and other benefits include trip delay, trip interruption, personal belongings, and emergency medical.

Common travel insurance coverage includes:

• Standard trip cancellation provides a full refund of pre-paid, unused, and non-refundable trip expenses that you may automatically forfeit should you cancel your trip. Eligible reasons for this claim include illnesses or injuries, family emergencies, and severe weather.

• Trip delay insurance covers expenses that may come with having your trip delayed, from hotel stays to the cost of meals at an airport. This benefit is for those who have connecting flights on their trip.

• Trip interruption insurance provides coverage in the event that your trip is cut short due to unforeseen circumstances. This typically covers a one-way economy flight ticket back home.

• Personal belongings and lost luggage coverage provides coverage for your baggage and/or personal items that are lost, stolen, or damaged during your trip.

• Emergency medical cover reimburses the costs of emergency medical care and treatments (up to your plan’s limit).

How Travel Insurance Insures Natural Disasters

In the case of a natural disaster, travel insurance can cover financial losses whether it’s damage to your personal belongings, medical costs from injuries, or financial losses from trip cancellations and interruptions.

Natural Disasters Before Your Trip

If your travel destination is affected by a natural disaster before your trip, your travel insurance will be able to cover any cancellation fees and reimburse you on payments you have already made, such as flight tickets.

It is important to note that your insurer may request that you warrant you are unaware of any circumstance that will likely lead to you canceling your trip. In the case of a natural disaster, if you have secured your policy before any warning signs, you can generally expect to be covered.

Natural Disasters During Your Trip

If you are caught in a natural disaster during your trip, you can expect to be covered for losses and damage to your personal belongings and medical costs in the case of an injury. This is as long as you can warrant that you were unaware of any circumstances that would lead to the damage and injury.

If a natural disaster cuts your trip short, you will also be able to benefit from your policy’s trip interruption coverage and may be reimbursed up to 100% of your trip’s costs depending on your policy.

Travel Insurance After a Natural Disaster

If you haven’t already secured travel insurance before a natural disaster strikes your travel destination, then it is highly unlikely that you will be able to get it afterward as your destination may be listed as a high-risk area.

High-risk areas refer to dangerous, remote, and challenging locations worldwide, including war zones, areas of civil unrest or terrorist activity, and crisis and disaster relief zones. Travel insurance typically does not provide cover for these areas.

If you have already secured travel insurance but still wish to continue to your travel destination after a natural disaster strikes, then you must contact your insurer and confirm what coverage you can still benefit from in your travel insurance policy.

Travel Insurance vs. Travel Medical Insurance Plan

A travel insurance plan catering to travel coverage offers benefits that insure your flights, accommodations, belongings, luggage, etc. These benefits are geared toward the trip expenses. A travel medical insurance plan instead offers temporary health insurance for travelers when on their trip.

Travel medical insurance plans can include some travel expense benefits, but their focus instead lies primarily on emergency medical care, hospitalization, serious injuries or illnesses, medical evacuations, etc. Travel medical plans for longer trips will even include outpatient benefits.

If you plan to be abroad for over a year, you may want to consider international health insurance plans.

Recommendations for Travel Medical Insurance Plans

We recommend the travel medical insurance plans offered by GeoBlue, WorldTips, and VUMI.

GeoBlue: Voyager and Trekker Plans

GeoBlue is a leading travel medical insurance provider because their plans provide full medical coverage while traveling abroad. GeoBlue’s travel insurance plans cater specifically to U.S. citizens.

• Voyager covers single rips for up to 182 days
• Trekker is a multi-trip plan that covers an unlimited number of trips (max of 70 days each) that occur within a 12 month period 

WorldTrips: Atlas Travel Insurance

WorldTrips’ Atlas Travel Medical Insurance plan has coverage for unexpected medical care, emergency medical evacuation, and some supplemental travel benefits. Trip cancellation is not included in this plan.

VUMI Travel Insurance

VUMI’s Single Trip travel insurance plan offers full medical coverage for a single round trip up to 365 days long. Their Annual Trip plan includes full medical coverage for all of your trips taken within one year.

VUMI’s travel insurance plans even have a VUMI Trip Cancellation Rider that allows you to cancel due to:

• An acute illness
• Injuries
• Death

Frequently Asked Questions

Do I need a trip cancellation plan with emergency medical coverage?

Most travel insurance plans that offer a trip cancellation benefit also include emergency medical coverage. Each plan is unique, though, so select a plan that suits your needs. If your travel itinerary involves activities more likely to result in an injury, you may want medical insurance.

Does my credit card have trip cancellation insurance?

It is common for credit cards to offer some travel insurance benefits, including trip cancellation, trip interruption, and/or car rental loss. Contact your credit card company to determine if the flights, rental cars, and other travel expenses you pay for with that credit card are covered.

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Conclusion

Even the most well-prepared travel agendas can be disrupted. This is why securing travel insurance with trip cancellation coverage when you make travel plans is essential to prevent avoidable financial losses.

If you are looking to insure your next trip with a travel insurance policy that suits you, contact Pacific Prime to get impartial advice from a broker. You can also request an obligation-free quote online.

Pacific Prime is a global insurance broker with over two decades of experience in the insurance industry. Our insurance experts can help you filter through different insurance plans from our extensive list of insurance partners to help you find a plan that suits your needs and requirements.

Be sure to read our other posts about the Mexican healthcare system – explained for expats and an expat’s and visitor’s guide to hospitals in Guatemala. 

• Author
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Serena Fung

Head of Content at Pacific Prime

Serena Fung is the Head of Content at Pacific Prime, a global insurance brokerage and employee specialist serving over 1.5 million clients in 15 offices across the world. With 6+ years of experience writing about the subject, she aims to demystify the world of insurance for readers with the latest updates, guides and articles on the blog.

Serena earned her Bachelor’s Degree in Psychology from the University of British Columbia, Canada. As such, she is an avid advocate of mental health and is fascinated by all things psychology (especially if it’s cognitive psychology!).

Her previous work experience includes teaching toddlers to read, writing for a travel/wellness online magazine, and then a business news blog. These combined experiences give her the skills and insights she needs to explain complex ideas in a succinct way. Being the daughter of an immigrant and a traveler herself, she is passionate about educating expats and digital nomads on travel and international health insurance.

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