1. Home
2. Blogs

How does trip cancellation insurance work? Does travel insurance cover trip cancellation?

• 
• 
• 
• 0
• 0

While planning for a trip, we have to organize travel, accommodation and all expenses well in advance. Alongside that, it's also wise to prepare for unexpected events such as sudden cancellations due to unavoidable circumstances or losing baggage during the journey, which is why travel insurance exists. Trip cancellation insurance in particular deals with a situation in which you are forced to cancel your trip or reservations due to reasons beyond your control, such as falling seriously ill or getting injured a few days before your departure. Because of this cover, you can be reimbursed for all the non-refundable travel expenses.

ow does trip cancellation insurance work?

When you have to cancel a trip unexpectedly, not only do you have to deal with the frustration and disruption of travel plans, but the financial fallout of the cancellation fees can also be a huge burden. For most travel and accommodation providers, the nearer the departure or check-in date, the higher the cancellation fee will be and the lower your refund. It's essential to contact them as soon as possible upon finalizing cancellations (ideally within five days of the event) and provide documentation as proof (e.g., medical certificate, a certificate from employer).  Since travel and accommodation cancellation policies differ from provider to provider, depending on when you cancel you might be charged a percentage of total cost or lose your deposit. Trip cancellation insurance covers the costs charged by the providers, i.e. the full cancellation fee. 

Validity and Exclusions:

Cancellation insurance coverage is applicable as long as the reason:

• Is listed in the policy

• Uccurs after you took out insurance

• Is unforeseen

• Is unintentional

A few examples of valid cancellation scenarios would be:

• Death of a family member

• Severe injury or illness (applicable to you or family)

• Damage to residence

• Changes to the dates of your paid leave from work

• Terrorist attack or natural disaster at the travel destination

• Your tourist visa is denied.

• Having to resit an exam

• Loss of employment or new employment

• Theft of ID or travel ticket

Depending on the policy, the cancellation grounds may vary so make sure to note the exclusion clauses. A few examples of exclusions would be:

• Organized public transport strikes unless the period of insurance commences before a date when the strike is foreseeable.

• Travel arrangements can be cancelled or changed by an airline, cruise line, or tour operator due to inclement weather.

• Changes in travel plans made personally by the insured, or travelling companion for any reason.

• adverse change in the financial circumstances of the Insured.

• Also, refer to "General Exclusions" mentioned in the policy.

Taking out trip cancellation insurance:

You can purchase trip cancellation insurance  at the travel agency or the tour operator's website while booking your trip. The insurance's total cost is proportional to that of the trip and will vary depending on the policy you select. It usually ranges from 4% to 7% of the total expense of the trip. 

Does travel insurance cover trip cancellation?

Yes, travel insurance does cover trip cancellation, along with medical expenses, loss or theft of possessions, flight delays and emergency evacuations. Trip cancellation coverage is the most widely used coverage in Travel Insurance. Since travel insurance provides more comprehensive coverage against different kinds of financial risks, it is recommended that you opt for it as soon as you've booked your trip. 

FAQs

1. What is trip cancellation insurance?

Imagine scheduling your dream trip to Italy, feasting on pasta, and basking in the Tuscan sun. But what if illness strikes just before departure, leaving you with non-refundable travel tickets and hotel reservations? Trip cancellation insurance functions like a shield here. It is a safety net that reimburses you for planned, non-refundable travel fees if you have to cancel due to unforeseen circumstances covered by your insurance. Consider it financial peace of mind, guaranteeing that you do not lose your hard-earned vacation cash due to unforeseen circumstances.

2. What are the Exclusions for Trip Cancellation Insurance?

While travel cancellation insurance is a lifesaver, it is critical to understand what it does not cover. For example, if you were aware of a pre-existing medical condition before acquiring insurance and it flared up, cancelation due to that illness may not be reimbursed. Similarly, a mere change of heart regarding your vacation would not be eligible for compensation. Remember that this coverage is for unexpected occurrences beyond your control, not for last-minute nerves or wanderlust regrets.

3. How does trip cancellation insurance work?

Assume you are unable to travel to Italy due to sickness. Don't worry! Simply contact HDFC ERGO to register a claim. Gather papers, such as medical certifications or official event announcements, to prove the covered cause for cancellation. Our pleasant claims staff will analyze your case, and if everything is to your policy conditions, you will be compensated for qualifying non-refundable trip expenditures up to the plan limitations. It is that simple!

4. Does travel insurance cover trip cancellations?

Be aware that not all travel insurance policies automatically provide trip cancellation coverage. It is similar to vacation packages in that some are customary and others are optional. When obtaining travel insurance, double-check to see if trip cancellation is covered or an optional feature. With HDFC ERGO's comprehensive travel insurance policies, you can be confident that trip cancellation coverage is always included, providing you with total peace of mind.

5. When is trip cancellation insurance valid?

The enchantment of travel cancellation insurance begins when you acquire it and continues like a protecting umbrella until your departure date. Depending on your HDFC ERGO plan, the coverage may even continue to protect you after you have started your journey, providing further comfort against unanticipated setbacks. Remember that the particular validity term varies per plan, so check your insurance specifics for more information.

Conclusion:

Travel Insurance policies are subjective and depend on your insurance provider. Hence, it is essential to read the fine print carefully and clarify coverage validity and exclusions. While trip cancellation policies are a must, travel insurance policies will give you better coverage since they not only account for sudden cancellations but can also help with medical emergencies, making arrangements for a temporary passport in case you lose it, or arrangements in case your flight gets delayed and so on.

Disclaimer:  The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

RELATED ARTICLES

What Happens to Your Travel Insurance If There is Sudden Change in Your Holiday Plans?

Will travel insurance cover me for cancellation or curtailment due to coronavirus?

What Should You Do if Your Flight is Cancelled?

---

• 
• 
• 
•