# Tuesday, April 18, 2017
                 
Trip Cancellation Coverage
The world we live in today is full of uncertainly. One just has to listen to a news report for examples of this. Political instability and upheaval, catastrophic weather events, environmental concerns, financial turbulence, and other similar stories are commonplace.

Yet life goes on, as they say. And one way that many of us carry on is by traveling. Going to new places, experiencing different cultures and just putting our feet up for awhile recharges the batteries and puts a spring back into our step.

But what happens if you have to cancel a vacation that you’ve already invested money into? Airfare, accommodations and entertainment costs are often non-refundable. What about some unforeseen incident that requires your presence back home, causing you to cut your trip short even though you’ve already paid for things?

The answer to this is trip cancellation and interruption protection via your travel insurance plan.

Global Events that Can Affect Travel

Here are some interesting facts and figures concerning unexpected events in 2016 that impacted people’s travel plans:
  • There were over 1,650 earthquakes that were 5.0 or higher on the Richter scale.
  • There were 7 named hurricanes and 15 named tropical storms.
  • The monetary damage caused by various global disasters totaled around $158 billion (US dollars).
  • The Fort McMurray wildfire was the costliest natural disaster in Canadian history, with damage estimated to be over $9 billion.
  • There were 916 tornadoes recorded in the United States.
  • There are approximately 1,500 potentially active volcanoes globally. (Large amounts of volcanic ash released into the atmosphere can cause the cancellation or re-routing of flights, remember the Iceland eruptions and the consequential interruption of flights to Europe).
In addition to natural disasters there were also acts of terrorism that can affect travelling. Many people will cancel their plans to a destination that has recently seen some sort of attack, choosing to travel to another location that they deem is safer.

Trip Cancellation Protection

Trip cancellation covers the insured for non-refundable, travel-related costs that have been incurred before the cancellation of their insurance policy. Note that it does not cover costs incurred after the policy has been cancelled.

Non-refundable costs that are typically covered by trip cancellation are accommodations (e.g. motels, hotels, etc.), airline tickets (unless the tickets can be transferred) and other transportation costs (e.g. cruise ships, trains, etc.)

Insurance companies differ when it comes to acceptable reasons for cancelling a trip. Make sure you know what your policy exclusions are before buying your trip cancellation, and when in doubt talk with an experienced insurance agent or broker who is very familiar with the type of coverage you are getting.

For example, the death of a family pet, while usually catastrophic in the family’s opinion, may not be a valid reason for cancelling your trip according to the insurance company. As another example, legal divorce or separation from your traveling partner is sufficient reason to cancel the trip, while "breaking up" with your travel partner is generally not accepted by the insurer.

Other possible reasons for exclusion are:
  • Not seeing a doctor before cancelling a trip.
  • Not submitting relevant documentation that outlines why the trip was cancelled.
  • Purchasing the travel insurance when you already know a large storm is on the way to your destination (travel cancellation covers unexpected expenses).
  • Purchasing the travel insurance after a terrorist event has occurred at your destination (similar to bad weather mentioned above).
  • The trip didn’t have to be cancelled. Most insurance companies will only reimburse cancellation claims if half or more of the trip’s duration is lost due to an unforeseen circumstance.

Trip Interruption Protection

Trip interruption covers non-refundable expenses that are incurred during a trip that had to be cancelled part way through due to unforeseen events of some sort.

Costs that are covered are the same as those covered by trip cancellation. For costs to be eligible they must be non-refundable and non-transferable. Typically, these covered costs are things such as accommodation, transportation and entertainment expenses.

Similar to trip cancellation, insurance companies differ when it comes to valid reasons why a trip can be interrupted.

The reasons to quit a trip that are commonly accepted by insurance companies are:
  • Death of a family member (either traveling with the insured or back home).
  • Sickness or injury incurred by the insured person while traveling.
  • The occurrence of a disaster that results in substantial damage to the insured’s home (so that it cannot be lived in).
  • Debilitating sickness or death of the person(s) who are taking care of your children while you are traveling.
  • Bankruptcy or financial default of the insurer (more common with trip cancellation).
  • Loss of employment (more common with trip cancellation).
Volcanic Activity

How to Get Travel Cancellation & Interruption Coverage

There are two ways to get trip cancellation/interruption coverage: as stand-alone plans or as part of an all-inclusive plan.

All-inclusive plans are very common types of travel insurance, and as the name suggests they include multiple types of coverage within one policy.

An inclusive travel insurance plan typically consists of the following types of coverage:
  • Emergency medical coverage for treatment by doctors or hospitals for unexpected injuries or sickness.
  • Travel cancellation/interruption.
  • Baggage loss, damage or delay.
  • Flight accident that covers loss of life or limbs while as a result of a flight accident.
Note that you are welcome to get as many online quotes for inclusive travel insurance plans as you’d like, free of charge from our web site.

Governmental Travel Advisories

The government of Canada (and many other governments for that matter) provides regularly updated travel advisories for most destinations.

These advisories cover things such as security, weather, climate, health and medical conditions, the occurrence of natural disasters, and more. 

If there is a travel advisory for your destination when you buy your travel insurance policy then your policy may be nullified (not valid), depending on the insurance company you are using and the severity of the advisory. When in doubt please make sure you check with your travel agent or broker before buying your travel insurance!

Please go here to check for current Canadian government travel advisories.

Conclusion

We hope you found this article about trip cancellation and interruption coverage useful.

If you have any comments or questions please contact us. As Canadian travel insurance brokers, we are here to help!
  

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