Do you travel a lot? Expect to cancel their trip due to unforeseen circumstances at some point. Here is all you need to know about trip cancellations and travel insurance.
Travel is one of life’s greatest joys, but sometimes things don’t go as planned. Whether it’s a sudden illness, a family emergency, etc, there are many reasons why you might need to cancel or postpone a trip. This is where travel insurance comes in.
During the pandemic, I missed a couple of flights due to cancellations, had to quickly change hotels due to an outbreak in mine, and got COVID myself in Namibia, changing my whole trip for the next two weeks. During the first two trips, I was stubborn and didn’t have any insurance. However, with the Namibia trip, I was able to get 2500 EUR back.
In this guide, I will explore trip cancellations and travel insurance and help you navigate the ins and outs of this topic. Additionally, I will also tell you which insurances I have with me right now and why.
Why is getting trip cancellation insurance important?
99% of my trip cancellations have not happened due to natural disasters, emergency outbreaks, or terrorist issues. Instead, most of them have been due to little details and unexpected changes, some of which were my fault, and others were not. For someone who travels to 30-35 different countries every year, it is just a matter of time until insurance becomes necessary.
Regardless of the reason, trip cancellations can be costly. You may lose money on non-refundable flights, hotels, tours, and activities, and you may have to pay fees to change or cancel your travel plans. This is where travel insurance comes in.
When you purchase travel insurance, you are protecting yourself in case the unexpected happens during your trip, or something prevents you from taking your trip altogether. Most travel insurance providers will refund a portion of the premium paid if you have to cancel a trip due to unforeseen circumstances, such as a disease outbreak or a natural disaster.
If a trip is canceled due to a human cause, such as you falling sick or a death in the family, then trip cancellation coverage could be worth the money. Many travel insurers will only offer coverage for medical reasons or a death in the family, so you may be better off sticking with a company that offers the flexibility to cancel trips and continuing to enjoy the benefits of travel insurance.
Types of Travel Insurance Policies
There are several types of travel insurance policies available, including:
- Trip Cancellation Insurance: This type of insurance provides coverage for the cost of your trip if you need to cancel or postpone your travel plans due to a covered reason.
- Medical Evacuation Insurance: This type of insurance covers the cost of emergency medical transportation if you become ill or injured while traveling.
- Travel Medical Insurance: This type of insurance provides coverage for medical expenses while traveling, including hospital stays, doctor visits, and prescription medications.
- Baggage Insurance: This type of insurance provides coverage for lost, stolen, or damaged luggage.
- Flight Insurance: This type of insurance provides coverage for flight cancellations or delays.
- Rental Car Insurance: This type of insurance provides coverage for rental car damage or theft.
What does a trip cancelation insurance cover and when is worth paying for it?
On a basic level, trip cancellation insurance will cover the cost of a trip being cancelled due to unexpected circumstances specified in your policy. In most cases, your insurance provider will determine the specific reason(s) for which you can cancel your trip. That said, most companies will cover some or all of the costs associated with your trip, including flight, hotel, accommodation, and so on.
The most important thing to consider when buying trip cancellation coverage is whether or not you expect to cancel your trip in the first place. If you are taking a trip that is important to you, and you wouldn’t think of changing your plans, then you might get away with buying trip cancellation insurance.
However, trip cancellation insurance may be useful if you would prefer to have the freedom to cancel your trip at the last minute or if your destination experiences frequent disease outbreaks or natural disasters. Ultimately, you will want to consider how important the trip is to you and how much it would mean to not have to pay for it in case you have to cancel it.
Is there insurance for stupidity?
Unfortunately, the answer is no. If you make a mistake like underestimating the travel distance to the airport and miss your flight, private travel insurance policies won’t cover this type of mistake. If you miss your flight, you could lose the money you paid for it. The only way to protect yourself against this type of scenario is by purchasing a flexible ticket that allows for cancellations or changes. However, flexible tickets can cost two to three times the price of a standard ticket. So, the best way to avoid paying any extra money is to be careful and plan ahead to ensure you arrive at the airport with plenty of time before your flight.
Know the hidden risk of getting trip cancellation cover
It is important to note that when you buy trip cancellation insurance, you are assuming a certain level of risk for your travel. The companies selling this type of cover generally assume that the trip may be cancelled for a covered reason. There are, however, some exceptions to this. If the company offering trip cancellation insurance assumes the risk and provides a large amount of coverage, they could choose to only pay a small amount if the trip is cancelled by you, depending on the circumstances.
The first step to buying the right trip cancellation insurance is to make sure you are getting a clear description of the coverage that is being offered by your travel insurance provider. You should also call them and clarify the type and level of coverage you are purchasing. If you find that your coverage is not clear enough or you are not getting the coverage you need, check comparison sites to compare travel insurance or consider getting comprehensive travel insurance.
Don’t ignore the fine print
As you can see from the above, it is tempting to just assume that if something happens, you can rebook or claim on your travel insurance. However, this is far from a guarantee, and you should remember that trip cancellation insurance is not a rebooking or trip-cancellation benefit.
Therefore, you should check your policy and make sure that you are covered for certain situations or circumstances based on your needs. This will ensure that you have sufficient coverage in the event that your trip must be cancelled for a covered reason.
How do you get travel insurance that covers trip cancellation?
It is important to note that most travel insurance providers will offer some level of trip cancellation coverage on their standard policies. However, if you are interested in getting a higher level of protection, you will likely have to pay a higher premium or get comprehensive insurance that offers cover for most trip cancellation scenarios. Find out more here.
When purchasing travel insurance, you should double-check the policy’s terms and conditions to make sure you are protected in the event that you need to postpone or cancel your trip due to unforeseen circumstances. Also, don’t be fooled by cheaper prices. If trip cancellation insurance is important to you, it’s best to purchase enough coverage in the event that something goes wrong.
What travel insurance I have right now
To be honest, I rarely book a trip cancellation insurance. I personally assume the risk of canceling a flight at the last minute, and since I tend to book itineraries at the last minute, the only risk I assume is losing the flight’s money. Every hotel I book, I do it through Booking.com and make sure I can get a full refund until 2 or 3 days before my trip.
Additionally, some of my credit cards include travel insurances such as luggage, car, and flight cancellation when I do the bookings using these cards.
When it comes to medical insurances, I always have a standard medical insurance and also a trip cancellation insurance due to medical reasons. However, I signed up for this insurance due to the pandemic and will probably cancel it this year. When renting a vehicle, I’m very concerned about the type of insurance I get. I make sure I get a complete full insurance with no deductible, and in case they don’t offer it, I try to get it with a private company before accepting the car.
Pro Tip: In case your hotel does not offer a free cancelation, call your hotel anyway and explain your situation. Hotels can easily waive your fees and reimburse your money, or only charge you for the first night.