How To Choose the Right Trip Cancellation Policy

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Not all trip cancellation policies are created equal, and choosing the right one can save you money if your travel plans go awry. But choosing a policy with overly restrictive limits or low coverage amounts may end up costing you more.

There are several types of trip cancellation policies available — usually as part of an overall travel insurance policy or as a benefit of a travel credit card. 

Here’s how to review and pick the right trip cancellation policy for your upcoming trip.

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Key Factors To Consider When Choosing a Policy

You want to rest easy knowing your trip is covered should something come up. 

Here are a few factors to consider when selecting a trip cancellation policy.

Coverage scope 

Make sure to review what events are actually covered. You want a policy that covers common travel disruptions like severe weather, trip delays, and medical emergencies. 

For example, if a snowstorm shuts down your airport, causing you to miss your flight and hotel room booking, trip cancellation would cover those lost costs.

Also, if you anticipate destination-specific risks such as natural disasters or political unrest interrupting your trip, make sure your policy covers those instances. 

For example, if you are heading to an island that’s prone to earthquakes, it’s a good idea to have policy coverage for that type of natural disaster.

READ MORE: What Is Travel Insurance and Do You Need It?

Policy exclusions 

Most trip cancellation policies have exclusions, meaning types of events they don’t cover. 

This may include things like pre-existing medical conditions, foreseeable weather events, acts of war, or canceling for personal reasons. 

For example, many policies won’t cover cancellation for a known weather event (like a named hurricane) or ongoing national crises.

Check what exclusions apply to your policy — some have stricter criteria than others.

Cost vs. coverage balance 

Trip cancellation insurance may be included already if you booked your trip with a credit card that offers it, such as the Chase Sapphire Preferred® Card or The Platinum Card® from American Express.* 

But if your credit card doesn’t have it and you need to buy it as part of a travel insurance policy, you’ll need to evaluate how much coverage is worth it. 

Travel insurance policies and add-ons require paying an insurance premium — and some types of coverage can get expensive. 

Review the policy coverage you have with your credit cards first, then review the policy coverage and costs of a stand-alone travel insurance policy so you don't overpay for unnecessary add-ons and coverage you don’t need.

COMPARE: Best Credit Cards With Travel Insurance

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Types of Trip Cancellation Policies

There are several different types of trip cancellation policies, including comprehensive travel insurance and standard policies with limited coverage. 

There are also policies that reimburse your trip costs if you cancel for any reason.

Standard policies 

Standard trip cancellation policies are usually included with most types of travel insurance, and may also be included as part of your credit card benefits. 

Coverage is usually limited to specific events, such as illness, injury, or weather-related disruptions.

Standard trip cancellation policies also come with lower coverage limits, such as $10,000 per person or $20,000 per trip. This may be adequate for your needs, but it’s a good idea to compare policies so you’re properly covered.

Cancel for any reason (CFAR) add-ons 

Cancel for any reason (CFAR) insurance is usually available as an add-on to an existing travel insurance policy. 

This type of coverage offers partial reimbursement of your nonrefundable travel costs (usually 50% to 70%). You’ll need to add the CFAR policy to your travel insurance within a specified time frame of booking your trip.

CFAR policies allow you to cancel your trip for any reason, such as a change in your plans, or if you simply don’t want to take the trip anymore. 

But a CFAR add-on to your travel insurance policy can be expensive, so consider if the coverage is worth it.

Comprehensive plans 

Comprehensive travel insurance plans can cover more than just trip cancellations. They also may include:

• Trip interruption
• Trip delay
• Emergency medical coverage
• Medical evacuation
• Lost baggage coverage
• Insurance for your personal belongings

A full travel insurance policy makes sense if you’ve booked an expensive trip or you’ll be leaving the country.

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Steps To Find the Best Policy for Your Needs

Here are a few steps you can take to find the best trip cancellation policy for your upcoming travel plans.

Assess your travel risks 

It’s a good idea to consider the risk that you might need to cancel the trip. There are a few factors to consider:

• Age and health status. If you are older or in poor health, there may be a higher risk of needing to cancel the trip due to a medical emergency. 
• Travel destination. If you’re going on a leisurely family vacation within the U.S., standard trip cancellation insurance may suffice. But for a pricey international trip, you may want a larger coverage amount for trip cancellation.
• Type of trip. Some travel is more treacherous than others and you want the proper coverage for your destination. For example, if you’re climbing a mountain, you may want an adventure and sports insurance add-on.

Compare providers and policies 

Once you know the type of trip cancellation policy and coverage amounts you need, compare providers to find the best coverage options and prices. 

There are some great comparison tools online that let you quickly browse several insurance options at once based on your criteria. 

For example, platforms like VisitorsCoverage and SquareMouth compare a range of insurance providers to help find you the best prices and coverage choices. 

Understand the fine print 

Before deciding on a trip cancellation insurance policy, read the terms and conditions. They say “the devil’s in the details,” and this especially applies to travel insurance policies.

Review the policy documents carefully, including the detailed coverage limits, how to make a claim, and what types of events are excluded. 

If anything is unclear, or you aren’t sure if a policy will apply to your concern, contact the insurance provider before finalizing your purchase.

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FAQs About Choosing a Trip Cancellation Policy

How much coverage should I purchase for a short domestic trip?

If you are taking a local trip within the U.S., most premium credit cards offer sufficient coverage for standard trip cancellation reasons. 

For example, the Chase Sapphire Preferred® Card offers up to $20,000 in coverage ($10,000 per person). 

But if you want a more comprehensive policy, make sure to purchase enough to reimburse you for your flights, hotel rooms, and prepaid excursions.

How do I know if my credit card’s trip cancellation benefits are enough?

First, you’ll need to review the terms and conditions of your credit card travel insurance and trip cancellation benefits. The policy documents should detail the covered events, coverage limits, and excluded events. 

If the total amount of coverage isn’t enough to reimburse you for the nonrefundable expenses of your trip, you may need more insurance.

Can I adjust my policy if my travel plans change after purchase?

For credit card coverage, the limits and covered events remain the same, no matter the type of travel. 

But for a travel insurance policy with trip cancellation insurance, you can usually make some adjustments after purchase, but you’ll need to contact your insurance provider for policy details. 

Some policy add-ons (such as cancel for any reason insurance) may need to happen within two to three weeks after purchase.

TL;DR: Choosing the Right Policy for You

The right trip cancellation policy ensures you’re protected without overspending on unnecessary add-ons or options. 

Assess your travel risks, compare providers, and read the fine print to find a policy that fits your needs.

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* Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by Amex Assurance Company.

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.