Trip Cancellation Insurance

Should You Purchase Trip Cancellation Insurance?

(Here's what you should know first)

Travel Insurance Coverages

Many Americans save up for the perfect getaway. Vacations frequently require a lot of planning and you may be required to make down payments or even pay in full in advance of your trip. 

So what happens to your money if something goes wrong and you are forced to cancel your trip? If you have trip insurance, you can rest assured that a botched vacation will not cause you financial loss.

Independent insurance agents in our network can help you find the right insurance policy to meet your vacationing needs. Contact a local member agent today to learn more about trip cancellation insurance.

Americans and Vacations

  • Americans get fewer paid vacation days than workers in most other developed countries
  • About 20% of American workers have canceled or postponed a vacation due to job responsibilities
  • Approximately 55% of US employees fail to use all of their paid vacation days
  • Americans spend an average of $2,037 per person on vacation travel
  • More than half of all Americans plan trips in the summer

What Is Trip Cancellation Insurance?

Also called travel cancellation insurance or vacation insurance, trip cancellation insurance is an optional coverage feature frequently offered by travel agents, online travel booking sites, and resorts. 

If you are making your travel plans through a variety of sites or agencies, you may find it easier and less expensive to purchase trip insurance coverage through a third-party vendor who can combine all of your travel arrangements into one policy.

Why Purchase Trip Cancellation Insurance?

Sometimes things go wrong. For example, you may need to cancel your travel plans but have a non-refundable ticket, or your intended destination may be suffering through a catastrophe. A trip insurance policy can protect you from financial losses associated with such events.

What Does Trip Cancellation Insurance Cover?

Trip cancellation insurance offers many different kinds of coverage. Many policies include most of these options as part of a standard package. Other insurers may allow you to select which coverage options best fit you. Here are some common trip cancellation insurance features:

  • Pre-departure trip cancellation insurance: This provides coverage if you are forced to cancel your vacation plans before departure. Most travel insurance policies provide coverage in the event of the death or a severe illness suffered by you, a family member, or traveling companion if it occurs after the policy is in place. Other covered events may include severe weather warnings, closure or bankruptcy of your intended destination resort, or delayed processing of your visa, passport, or other traveling documents.
  • Post-departure trip interruption insurance: This provides coverage if your trip is suddenly cut short for a variety of reasons including:
    • A severe illness, injury, or death suffered by you, a traveling companion, or a family member, necessitating an immediate return
    • A forced evacuation due to severe weather or another catastrophic event
    • Sudden bankruptcy or closure of your cruise line, resort, or other vacation destination
  • Flight insurance: This provides coverage for any expenses or losses you may incur if you are injured on a flight or if a flight delay or cancellation causes you to miss a connection to the next part of your vacation. Flight cancellation insurance can be very important if a cancellation or delay causes you to miss a cruise or a scheduled tour.
  • Baggage insurance: Airlines offer compensation for lost baggage, but it is typically limited to $3,000 per incident (not bag) and is based on the depreciated value of the contents kept within. Airline-offered coverage usually excludes high-value items such as furs and jewelry from coverage. International travelers are usually only compensated $9.07 per pound for lost bags. For a lost 50 pound suitcase, you'll receive less than $500. If you purchase baggage insurance, you will be fully covered for the replacement value of your baggage contents, including furs, jewelry, and prescription medications.
  • Medical coverage insurance: Your medical coverage becomes more difficult to manage if you are traveling out of the country or are on international waters on a cruise ship. Including medical coverage with your travel insurance can ensure that you are have access to the best possible medical care without worry about extremely high out-of-network medical costs.
  • Lodging insurance: Frequently, when booking reservations for a hotel, resort, tour, or spa retreat, you are required to make a significant down payment, or even payment in full. If your destination suddenly goes bankrupt, or if travel complications force you to lose this deposit, your travel insurance can provide you with compensation.
  • Cruise insurance: A cruise can cost thousands of dollars, so it's a good idea to purchase cruise insurance when you book your trip. This will cover you if travel problems cause you to miss boarding, or if you or a traveling companion gets ill while on board and needs to withdraw for medical treatment. Also covered are costs associated with:
    • Managing lost or stolen passports
    • Tracking down and bringing you lost or stolen luggage
    • Securing necessary prescription drugs if forgotten

Also, if your intended cruise liner suddenly declared bankruptcy and fails to refund money paid, your cruise insurance can reimburse you for your loss.

  • International travel insurance: International travel insurance provides all the coverage offered by domestic travel insurance, with additional coverage for lost or stolen passports, visas, and baggage. Frequently, these policies offer increased medical coverage. This may be necessary if you fall ill or are seriously injured in a country that offers questionable medical care. If this happens to you, your insurance coverage can cover the cost of transporting you to a country that can handle your medical emergency.

Are There Trip Cancellation Coverage Exclusions?

Trip insurance is purchased specifically for your planned vacation and expires when the vacation is over. Some policies must be purchased when you book your travel accommodations. Others may have restrictions on how late you can purchase this coverage. 

For example, if you are planning a trip to the Gulf Coast and fear that your plans may be marred by a hurricane, most insurers will not allow you to purchase coverage for a hurricane once an approaching tropical storm has been given a name.

Many policies have coverage exclusions. These can vary significantly from one provider to the next, so it is important that you read the fine-print details of your policy before you make a purchase. Some examples of exclusions include losses due to:

  • Mental or psychological disorders
  • Complications from a normal pregnancy, unless hospitalization is required
  • Any unlawful acts committed by you or your traveling companions
  • Failure of a tour guide, operator, or agency to provide you with travel arrangements
  • Complications arising from illnesses or diseases that happen after the policy is no longer in affect

Also excluded from many travel insurance plans is coverage for:

  • Loss or damage due to confiscation or destruction by customs officials
  • Animals traveling with you
  • Prosthetic devices, dentures, orthodontics, hearing aids, eyeglasses, and contact lenses
  • Stocks and bonds, money orders, securities, deeds, and credit cards
  • Any property shipped as freight prior your scheduled travel date

Always read the fine print on any insurance plan before making a purchase. An agent in our network can explain all coverage offerings and exclusions so that you are not unpleasantly surprised later.

How Can I Find the Best Trip Cancellation Insurance Policy?

Before requesting a policy quote from an insurance provider, you may want to research some trip cancellation insurance reviews online. There are many websites and forums that provide trip insurance reviews from customers who have filed claims. 

Through them, you can learn more about each company’s customer service, ease of claims filing, and complications people have faced due to policy exclusions. You can also enlist the help of an agent in our network who can provide you with a list of providers that you may want to research.

Secure an Affordable Trip Cancellation Insurance Policy

If you are interested in learning more about vacation cancellation insurance, you contact an independent insurance agent in our network. All member agents have taken a pledge to provide customers with outstanding service and ethical advice.  An independent agent can help you as you search for the best trip insurance policy.

Independent agents in our network work with several different top-rated insurance companies and can provide you with a variety of competitively priced policies to compare. 

When you're doing trip cancellation insurance comparisons, their advice is invaluable. Contact a local member agent now and enjoy peace of mind on your next vacation.

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lodging magazine July 2019 October 2018