Unexpected events can force you to cancel a trip, but trip cancellation insurance ensures you don’t lose your hard-earned money in the process.
Trip cancellation insurance reimburses prepaid, nonrefundable travel expenses if you have to cancel your trip due to covered reasons like illness or severe weather.
Travel plans can change on a dime, and this coverage helps protect the money you spent on flights, hotels, and tours.
Erika Recommends
- VisitorsCoverage
Cancellation coverage for a variety of trip types. - SquareMouth
Marketplace for searching and comparing policies. - Chase Sapphire Preferred® Card
Trip cancellation included for illness or severe weather.
What Is Trip Cancellation Insurance?
Trip cancellation insurance protects you from financial loss due to unforeseen travel cancellations.
For instance, say you get sick and have to pause your trip to receive medical care. Or maybe you need to return home early to deal with a work emergency.
If you booked nonrefundable flights and hotels, you’d eat those costs. But if you have trip cancellation insurance in your back pocket, you can cancel all or a portion of your trip and receive reimbursement for covered expenses like tours, flights, and hotel stays.
What To Look for in Trip Cancellation Insurance
All travel insurance policies come with their own unique terms and conditions, but here are some of the things you’ll want to consider.
Covered reasons for cancellation
Before buying a trip cancellation policy, double-check what reasons are eligible for cancellation coverage.
Common covered reasons include illness, injuries, family emergencies, and natural disasters.
If you want even more protection, you can buy cancel for any reason (CFAR) coverage that makes it possible for you to cancel part or all of your trip without any justification.
Reimbursement limits and exclusions
When buying cancellation insurance for your trip, check the maximum coverage amounts.
If you’ve bought a pricey cruise down to Antarctica worth $20,000 but have to cancel and your insurance only covers $5,000, you’re still out a lot of money.
Know what you’re entitled to before you buy, so if you do need to file a claim, you aren’t met with disappointment.
When does coverage start and end?
It’s important to be clear on the dates your coverage extends to before you set sail on your next adventure.
Trip cancellation insurance coverage typically starts the day after you purchase the policy and ends when your trip begins. Some policies may offer coverage for trip interruptions once travel begins.
For full protection, it's best to buy insurance as soon as you book your trip — ideally within 14 to 21 days of booking and paying for your trip.
Trip cancellation vs. trip interruption insurance
Even though their names are similar, trip cancellation and trip interruption insurance are two different things.
- Trip cancellation insurance tackles nonrefundable prepaid expenses (like flights and hotels) if you have to cancel your trip before you depart. This can be for covered reasons like illness, severe weather, or job loss.
- Trip interruption insurance coverage kicks in only once your trip begins. It covers additional expenses if you need to cut your trip short or extend it due to emergencies like natural disasters or airline strikes.
Was there an issue with your flight?
We read the fine print so you don't have to! Take our Flight Rights Quiz to learn more about the compensation the airline may owe you if your flight was delayed or canceled!
Where to Get Trip Cancellation Insurance
You’ll need to consider all of the above factors as you’re shopping for travel insurance that best suits your travel plans.
If you’re not sure where to start, you can compare policies using an online marketplace like VisitorsCoverage or SquareMouth. You can check rates and see which ones offer the coverage you need.
Once you decide on an insurance provider and plan, you can usually apply online by giving some basic details about your trip and its cost.
You may also already have trip cancellation insurance through your credit card. For example, the Chase Sapphire Preferred® Card will reimburse you up to $10,000 per person ($20,000 per trip) for cancellations due to weather or illness.
If you’re a business traveler, the Ink Business Preferred® Credit Card reimburses up to $5,000 per person ($10,000 per trip) for nonrefundable expenses when you need to cancel (illness and inclement weather are the primary covered situations).
Chase Sapphire Preferred® Card
Rewards Rate
- 5x on travel purchased through Chase Travel℠
- 3x on dining, select streaming services and online groceries
- 2x on all other travel purchases
- 1x on all other purchases
Welcome Offer
Earn 60,000 bonus points after $4,000 in purchases in your first 3 months from account opening.
Annual Fee
$95
. . .
Ink Business Preferred® Credit Card
Rewards Rate
- 3x points on every dollar spent on shipping, advertising with social media and search engines, internet, cable, phone, and travel — up to the first $150,000 spent in combined purchases in these categories
- 1x per dollar spent everywhere else
Welcome Offer
Earn 90,000 bonus points after you spend $8,000 on purchases in the first 3 months
Annual Fee
$95
. . .
Steps to Take When Canceling a Trip
If you need to cancel a trip, it’s best to contact both your travel booking providers and the insurance company as soon as possible.
Let the insurer know about any bookings you can’t get a refund for and ask what you need to do to navigate the claims process effectively.
For example, your insurance provider will need clear documentation, including proof of the cancellation, receipts for out-of-pocket expenses, and medical/emergency reports (if applicable).
Timeline for reimbursement
Reimbursement timelines can vary by provider but commonly look like:
- Filing the claim: Most insurers require you to file a claim as soon as possible after canceling your trip, usually within 20 to 90 days.
- Claim processing: Insurers typically take two to four weeks to review and process claims (complex cases may take longer).
- Receiving reimbursement: If approved, you can generally expect to receive a reimbursement within 7 to 14 business days after the claim process completes.
FAQs About Trip Cancellation Insurance
Does trip cancellation insurance cover COVID-19 or other pandemics?
If you catch COVID-19 or another illness, your trip cancellation insurance coverage should kick in. However, don’t bank on this coverage supporting you if you want to cancel your trip due to fear surrounding a pandemic.
For example, if you see your destination has surging COVID-19 numbers a week before your trip, you likely won’t receive reimbursement if you choose to cancel.
If you get COVID-19, that’s an entirely different story and will be treated like any other illness during the claims process.
What happens if my airline or hotel offers a credit instead of a refund?
If your airline or hotel offers a travel credit instead of a refund, your travel insurance provider may deny your claim as insurers typically reimburse only nonrefundable, lost expenses.
Some policies may cover the difference if your credit has restrictions or doesn’t fully replace your original booking.
Is “cancel for any reason” coverage worth the extra cost?
Cancel for any reason (CFAR) coverage may be worth the cost if your trip is packed full of nonrefundable bookings.
How long your trip is, where you are traveling to, how much you spent, and your risk tolerance will all impact how much value you get out of a CFAR policy.
Does travel insurance cover cancellations due to work conflicts or schedule changes?
Standard travel insurance does not usually cover cancellations due to work conflicts or schedule changes — unless you have a policy that explicitly includes work-related reasons.
Some policies cover job loss or mandatory job relocation but not voluntary changes related to your work schedule.
If work-related cancellations are a concern, you may benefit from adding cancel for any reason (CFAR) coverage to your insurance plan.
TL;DR: Understanding Trip Cancellation Insurance
Trip cancellation insurance provides financial protection against unexpected trip disruptions — for example, if you have to cancel a vacation because you get sick, there’s a natural disaster in your destination, or you lose your job.
When choosing a policy, make sure you understand the covered reasons so you don’t end up with a surprise denial if your reason for canceling isn’t included.
And if you do need to file a claim, keep all your receipts and documents for a smooth claims process.
Learn With Erika
- Free Travel Secrets Workshop
- Learn how to use the fine print to book your next vacation practically for free with Erika's step-by-step system
- Free 5 Day Investing Challenge
- Learn how to get started as a beginner investor and make your first $10,000
- Free 5 Day Savings Challenge
- Discover how you can save $1,000 without penny pinching or making major life sacrifices
- Join Erika Kullberg Insiders
- Ask investing questions, share successes and participate in monthly challenges and expert workshops
. . .
Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
