How Does Trip Cancellation Insurance Work?

We all need to break from all the hustle and bustle of life. Each one of us plans on taking at least one trip every year, away from our homes, doing something we don’t generally do – take a hike, lay on a hammock with a book, or go swimming to let some steam off. Based on our preferences, we book flight/train tickets and make hotel reservations in advance without taking uncertainties into consideration. But, what if when it’s finally time to board that train/flight, something happens, and you cannot make it? There will be a deep regret. Not only will it shatter your travel plans, but it will also drain all your money down the gutter. You won’t receive any refund if you cancel your trip right when you have to leave. However, you can escape such unnecessary losses by opting for an international travel insurance plan with a trip cancellation cover. So, let us take a deep dive into the trip cancellation cover and understand why it is a lucrative financial tool.

What does Trip Cancellation Insurance Cover?

A trip cancellation cover offers a refund on your pre-paid, non-refundable, and deferred expenses related to the trip. In case you have made all the bookings but cannot travel due to sickness, illness, or death of the insured, travel buddy, or a family member, you will be eligible for an insurance claim. Some insurers offer Trip Cancellation Insurance as a standalone plan, whereas others offer it as an add-on cover.

How does Trip Cancellation Insurance work?

Since you now know what a Trip Cancellation Cover is, we can head over to understand how it works. Let us assume that you cannot go on your trip and need to cancel it due to reasons covered by the plan, your travel insurance provider will offer reimbursement on most of the payments you have made for the trip. However, you must note that the reimbursement amount depends on your sum insured. When cancelling a trip, we never receive the entire amount back. However, if the reason behind your trip cancellation is valid, your insurer will provide reimbursement. This will ensure that you do not sustain a significant loss. Share the necessary details and documents with your insurance company to get reimbursement as per the policy limit. Here's an example for you to understand the concept of trip cancellation insurance better: Mr. Ajay, a 30-year-old IT Interior Designer, makes flight and hotel bookings for December 26, 2022. However, he gets hospitalised after getting diagnosed with dengue fever on December 25, 2022. And thanks to his illness, Ajay is in no condition to board the flight. He is down with dengue, he cannot go on the trip he was looking forward to, and to make it worse, he won't get any refund from the airline company or hotel. With trip cancellation insurance, Ajay can breathe a sigh of relief. While the insurance provider might reimburse the whole amount, he will receive a major chunk back.

When is Trip Cancellation Insurance valid?

Inclusions of a Trip Cancellation Insurance Plan can differ from insurer to insurer. However, here’s what is covered in travel insurance with trip cancellation cover:

1. Death of an immediate family member
2. Damage to your place of residence
3. Serious illness or injury (applicable for you as well as your family)
4. Natural disaster at the travel destination
5. Terrorist attack at the travel destination
6. Changes in the dates of your paid leave at work
7. Having to reappear for an exam
8. ID or travel ticket theft
9. New job or loss of job
10. Denied tourist visa

* Standard T&C Apply Note: Cancellation insurance coverage is applicable as long as the reason is listed in the policy and uncertainties occur after you purchase insurance. The reason behind the trip cancellation must be unintentional and unforeseen.

Exclusions under Trip Cancellation Insurance

Here are a few exclusions under the Trip Cancellation Insurance Cover:

1. Pregnancy and pregnancy-related issues
2. Addiction to drugs or alcohol
3. Nervous system diseases, depression, and anxiousness
4. Mistakes committed by the transport service provider
5. Any riots or labour disputes that existed when you bought the insurance cover
6. Cosmetic procedures undergone for a cause other than an accident
7. Flying even though the doctor has recommended against it due to a medical condition
8. Any rules enacted or published by a public body

Conclusion

Trip Cancellation Insurance comes in handy during multiple situations. However, ensure that you buy this insurance well in advance, so you can successfully claim losses. Do not forget to make a comparison of travel insurance plans offered online. Check out the travel insurance premium calculator to avail the best plan at a feasible rate. Moreover, read through the policy document before you opt for a travel insurance plan or a trip cancellation cover. * Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.