What to know about trip cancellation insurance
If you're planning a vacation, you may want to purchase trip cancellation insurance. Like most types of insurance, it's designed to help cover unexpected costs due to unforeseen and tragic events. This type of travel insurance helps your trip run smoother and pays for expenses if your trip doesn't go as smoothly as planned.
What does trip cancellation insurance cover?
If you're travelling domestically or internationally, trip cancellation insurance helps reimburse costs if you are unable to make your trip or if the trip is cancelled. Travellers cancel their plans for a variety of reasons from personal injury or death in the family to job loss. At the same time, a planned vacation can be cancelled for reasons such as unfit weather conditions.
Whether you're enroute or still at home, this type of travel insurance can reimburse the costs of your tickets and hotel accommodations, as well as the costs to rebook all or a portion of your trip if need be. Of course the type of coverage (and possible deductible) can vary so be sure to read the fine print before purchasing travel insurance.
How to make a claim
Most insurance providers have a 24-hour customer service telephone number. If they don't, they probably have an after-hours emergency hotline. If you are unable to travel or the airline (or other provider) cancels your trip, the first call you make should be to your insurance company.
You will most likely be asked to provide proof of payment before being reimbursed for a vacation that has already been paid for. If you need to rebook your trip you may be able to do it directly through the insurance company or you may be required to pay first and show proof of payment before being reimbursed afterwards. This depends on your insurance provider, as well as the type of coverage purchased.
Can a claim be denied?
The short answer is yes. Just like other types (and most) of insurance claims, travel insurance needs to be submitted to the provider and reviewed by an adjudicator before being paid out to the client. Paperwork needs to be submitted and information from the airline (or other provider) needs to be verified.
A travel cancellation insurance claim can be denied for several reasons. It can be as simple as missing documentation or because your insurance policy doesn't actually cover the reason for cancellation. It's important to note that travel cancellation insurance doesn't automatically cover all types of scenarios.
Some coverage only takes care of job loss, and others may cover deaths with extended family. There are a variety of reasons why a trip can be cancelled and therefore there are a variety of travel insurance options. Just remember to always read the fine print.
If your trip is cancelled by the airline, train or boat company and they covered some (or all) of your costs the insurance company won't reimburse you. However, the good news is that one way or another you will be refunded for unexpected costs if your vacation is cancelled due to circumstances beyond your control.