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What Is Trip Cancellation Insurance and When Should You Get It?

Learn how this coverage protects your travel investment and when it makes sense to add it

Planning a trip involves more than booking flights and accommodations. From surprise illnesses to severe weather, there are many reasons your plans might change before departure. Trip cancellation insurance helps safeguard the money you've invested in advance bookings if you're forced to cancel for a covered reason.

This matters when you're booking a non-refundable flight, tour, or cruise. You might think about this the next time you're arranging travel months in advance or during peak storm or flu seasons.

What Trip Cancellation Insurance Covers

Trip cancellation insurance reimburses you for prepaid, non-refundable travel expenses if you have to cancel your trip before it starts due to specific, unexpected events. These typically include:

  • Illness or injury that prevents you or a travel companion from traveling

  • Death of a family member or travel companion

  • Severe weather that disrupts flights or makes travel unsafe

  • Job loss or unexpected work obligation

  • Legal or emergency obligations, such as jury duty or a home emergency

Covered costs may include:

  • Flights

  • Hotel stays

  • Tours or excursions

  • Event tickets

  • Cruise deposits

Note: Not every cancellation reason is covered. Simply changing your mind or forgetting your passport is not a valid reason for reimbursement.

When It Makes Sense to Buy

You should consider trip cancellation insurance if:

  • Your trip involves large upfront, non-refundable payments

  • You're traveling during a season known for hurricanes, blizzards, or strikes

  • You or a travel companion have health concerns that could affect your plans

  • You’re booking far in advance and worried about changing circumstances

  • Your employer may unexpectedly require you to cancel or change your vacation dates

Scenario Should You Consider Coverage?
Booking a $5,000 cruise six months in advance Yes
Driving to a weekend cottage last minute Probably not
Traveling with elderly or unwell companions Yes
Buying fully refundable tickets Not necessary
 

Tip: Many travel insurers offer bundled trip cancellation and interruption packages, which also protect you if your trip is cut short after it begins. This can be more cost-effective than buying cancellation-only coverage.

How to Choose the Right Policy

Not all policies are alike. Some may include "cancel for any reason" coverage as an upgrade, allowing broader protection. Others may limit cancellation reasons to a narrow list.

When comparing plans, look for:

  • The maximum reimbursement amount

  • The list of covered reasons

  • The timing requirements for when coverage starts and when claims can be made

  • Whether any medical documentation is required for health-related claims

Caution: To get the full benefits, most trip cancellation insurance must be purchased shortly after your first trip payment—often within 10 to 21 days. Waiting too long can limit your options

Trip cancellation insurance offers peace of mind when your travel plans involve significant financial risk. By understanding when and how it works, you can decide if it’s the right safety net for your next journey.