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What is and isn’t covered by Trip Interruption and Cancellation Insurance

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Congratulations on booking your trip! You bought your airline ticket and made a non-refundable hotel deposit…but did you buy insurance to protect your travel investment?

Cancelled trips are a primary concern for travellers. The cost of your trip is quite an investment—one that may have taken years of budgeting and planning.

A lot can happen in the time between booking your trip and departing. If a medical emergency or other unexpected event prevents you from going on your trip or travelling as long as you planned, you could potentially lose some (or all) of the money you spent.

Travel insurance provides coverage for trip cancellation and interruptions, but the reason for the cancellation or interruption makes a difference—not everything is covered. Here’s what you should know.

Before you depart

You can purchase travel insurance any time before the date of your departure. If you want a plan that includes valuable Trip Interruption and Cancellation benefits, as well as benefits for existing medical conditions, you’ll want to purchase travel insurance as soon as possible after booking.

If you need to cancel your trip before your scheduled departure, trip cancellation insurance reimburses you for non-refundable, prepaid travel arrangements that can’t be recovered from another source. The insurance may also pay cancellation penalties that a carrier or tour guide may charge.

Your travel insurance does not cover cancellations for everything. Travel insurance policies provide a list of qualifying reasons for trip cancellation coverage. If your reason is not on the list, you will not be covered.

While you are on your trip

Trip interruption insurance covers extra costs if you return home sooner or later than planned, and reimburses you for non-refundable portions of unused, prepaid travel arrangements. This could include excursion tickets unused due to illness or injury, and may include cruise interruption due to weather or mechanical failure of the ship. It may also include ‘catch-up’ costs to join your tour or cruise after missing a departure due to a covered delay, such as a cancelled flight.

Typical covered reasons for trip cancellation or interruption

Travel insurance plans only cover you for the risks that are listed in the description of coverage, such as:

  • Injury or illness of you the insured, or your travel companion, immediate family member, or business partner
  • A hurricane or natural disaster strikes your destination
  • Your travel company goes bankrupt
  • There is terrorism or mandatory evacuation at your destination
  • Your destination host dies or is hospitalized
  • Your home or business is damaged, vandalized, or burglarized
  • You have jury duty, a required court appearance, or military service
  • You are required to work, are terminated, or are transferred
  • You are a victim of felonious assault prior to the trip
  • You are in a traffic accident prior to the trip
  • Your passport or visa is stolen prior to the trip
  • Your school year is extended
  • There is a legal separation or divorce
  • A host family or friend dies or is ill and you lose your accommodation

Of course, it’s important to note that travel insurance plans vary in their coverage.

If you have to cancel your trip, the situation causing you to cancel must qualify as a covered reason. Carefully review and understand the plan’s description of coverage.

What isn’t covered

Just like travel medical insurance, a pre-existing condition can invalidate your claim. But pre-existing means something different in a Trip Cancellation or Interruption policy. In order to be eligible for coverage, the event that disrupts your trip must be out of your control.

While everyone’s circumstances are unique, here are some of the most common reasons trip cancellation insurance claims are denied.

You didn’t see a doctor before cancelling your trip because of illness.

If you or your travelling companion suffers an illness, injury or medical condition that’s disabling enough to make a reasonable person cancel a trip, your insurer considers that a covered reason for trip cancellation. However, a doctor must examine you or your travelling companion and advise that person to cancel the trip before the decision to cancel is made. If that isn’t possible, a doctor must examine you within 72 hours of your trip cancellation.

You didn’t provide documentation for your trip cancellation reasons and expenses.

You need to thoroughly document all your trip costs, your reason for cancellation and any refunds you may have received. Provide receipts and itemized bills for all expenses, refunds or expense allowances received from your tour operator, travel agency, or resort, and copies of literature that describes penalties. Have your rental contract or confirmations. Provide appropriate documentation that officially explains the cause of your trip cancellation or interruption, including any explanation of diagnosis, along with your original itemized bills, receipts, and proof of other insurance payments. In short, you need to provide any documentation you can find that relates to your trip cancellation reasons and costs.

You purchased travel insurance when a big storm was already on the horizon.

While there are usually several covered reasons for cancelling a trip that can be related to severe weather—for instance, your travel carrier cannot get you to your original itinerary’s destination for at least 24 consecutive hours from the originally scheduled arrival time due to severe weather, or your destination is uninhabitable.However, travel insurance is meant to protect travellers against sudden and unforeseen events—not threats that are already evident when the insurance is purchased. If you buy travel insurance after a winter or tropical storm has been reported, or a warning has been issued, your plan won’t provide coverage for claims related to that event.Make sure you buy trip cancellation insurance well in advance of your departure.

You decide to cancel your trip.

If you decide to cancel your trip just because things may not be going according to plan, your trip cancellation insurance claim will be denied. To make a trip cancellation claim, your travel carrier must have been unable to get you to your original itinerary’s destination for at least 24 consecutive hours from the originally scheduled arrival time.Keep in mind that your trip cancellation benefits can also help you get to your original destination another way! You can be reimbursed (up to your policy’s Trip Cancellation Coverage maximum benefit) for the reasonable cost of alternate transportation, (less available refunds) and the cost of any lost prepaid accommodations caused by your covered delayed arrival (less available refunds).You may also be able to file a trip interruption claim if you miss at least 50% of the length of your trip due to a travel carrier delay or other covered reason. Remember, travel insurance isn’t “cancel for any reason” insurance. That’s why it’s essential to read all the terms and conditions when you buy your plan.

When your trip is cancelled or interrupted, contact the right people

First, contact your travel agent, airline or tour operator. Then contact your travel insurer and ask them what to do next. Sometimes they can help you arrange transportation home or to your next destination, or they will give you a credit to help you make the necessary arrangements.

Need help getting the coverage you need?

We know that trip cancellation benefits can seem complicated. At SBIS we do our best to make it as simple as possible. Call our insurance experts at 1-800-667-0429 Monday to Friday, 8:45 a.m. to 4:45 p.m. ET. We can help!

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