Will travel insurance cover a cancelled trip?

Women dressed in winter clothing seated in the window seat on a train. She is staring out the window listening to music.

Oftentimes, situations pop up and impede our plans when we least expect it. When it comes to vacations, you rarely anticipate the potential of having to cancel your well-deserved trip. But what if there’s an emergency? Unfortunately, it happens: death, illness, or extreme weather. These are all valid reasons to cancel or delay your holiday. That begs the question: will travel insurance cover a cancelled trip?

Travel insurance does cover cancelled trips. However, if you’re covered will depend on the circumstances. We break down travel insurance and what’s covered in the article below.

Trip Interruption vs. Trip Cancellation

Trip interruption is when you must return home while in the middle of your trip. Trip cancellation is when you cancel your travel plans before the date of your departure. Both are generally included in travel insurance. Make sure you purchase your travel insurance policy before you book. You’ll also want to take a look at the Government of Canada travel advisories, as nothing that’s listed on your destination country’s page will be covered.

Will credit card or employer travel insurance cover me?

Many people have travel insurance coverage from their credit cards or employers. The best thing you can do is to be aware of what your policy entails. There will be limits, such as the number of days of travelling you are covered for and restrictions on how much you will be reimbursed for. Make sure that this policy will provide the coverage you need. You can also talk about your existing coverage with your broker if you have any questions.

What does travel insurance cover?

There are several examples of scenarios where your trip interruption or cancellation insurance can reimburse you:

  • If there is a death or severe illness in your family
  • If there is a personal emergency, either dental or medical
  • If your travelling partner has a personal or family emergency
  • If the destination you are travelling to has an extreme weather situation
  • If the airline or travel company you are booking with goes out of business
  • If you lose your job or the finances to pay for your trip

What trip interruption and cancellation travel insurance covers are all costs associated with the respective interruption or cancellation of your planned vacation. This would cover expenses such as any accommodation you might need, transport, cancellation fees, and so on. Depending on your policy your coverage and the amount which you are eligible for will vary.

What is not covered by my travel insurance?

Not every situation can be covered by trip interruption and cancellation insurance. If you have been given a sensible amount of warning that you may need to interrupt or cancel your trip beforehand, you will not be covered. Basically, a lot of insurance policyholders will use authorized government websites like the Government of Canada’s Travel Advice and Advisories website as a foundation for what classes as being given a “sensible amount of warning”. If any precaution is listed on the advisories or website, you will not be compensated. If your reason is not listed or included after the date of your vacation has been decided, you will be eligible for compensation.

Imagine that, hypothetically, you were to plan a trip in June that would take place in South Africa throughout September. However, in August, you decide to terminate your plans in advance due to concerns regarding the Zika virus. This would not be compensated since the Canadian Government made a statement about the virus before your reservation. If the trip was cancelled due to some new illness that the government warned about, you would be reimbursed as the illness was not mentioned prior to your booking.

Personal emergencies are another matter. If you were aware of someone’s declining health whether your own or a family member’s in advance of your trip, then you would not be covered. On the other hand, if the illness or death is abrupt, then you would be.

Call your independent insurance broker about your options when it comes to your travel insurance, as that can be a good start to figuring out what you’re covered for. You should be informed about what you need and what your options are.