Have a tour planned for your next trip? Ensure your deposit is covered with tour cancellation travel cover.
Cancellation cover is defined as cover for lost deposits and cancellation fees for prepaid travel arrangements due to circumstances beyond your control. It is one of the most commonly claimed areas of travel insurance, as cancellations can occur for a variety of reasons and are not something one can ever predict.
Travel insurance covering cancellation is particularly important to have if you are taking a tour or planned holiday, where the flights, accommodation and activities have all been paid for in advance. In the event that your tour is cancelled and you are unable to get a refund from the operator, then tour cancellation cover would reimburse you for the money you have lost.
Cancellation cover also covers you for cancellation prior to leaving on your holiday. If you were to become ill or unable to take your holiday for any covered reason, your lost prepaid bookings would be covered by your cancellation insurance.
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What types of cancellations are covered by travel insurance?
There are a variety of different circumstances in which cancellation insurance will cover you. These include:
- Flight cancellations – providing they are due to severe weather or to airline industrial action
- Missed accommodation – if you missed your prebooked accommodation due to a cancelled flight
- Accidents en route – missed transport connections due to a motor vehicle, rail or marine accident en route to the terminal
- Extreme events – travel arrangements affected by natural disasters, hijacking, riots or civil unrest
- Severe illness or injury – trip cancellation expenses if you are declared unfit to continue your journey
- Severe illness, injury or death of a close relative – trip cancellation if you must return home to be with a sick or dying relative or attend their funeral
- Lost frequent flyer points – reimbursement for frequent flyer points used to pay for your trip that are lost due to cancellation for a covered reason (only offered by some insurers)
- Emergency accommodation expenses – additional food and accommodation expenses incurred due to trip delay or disruption
- Alternative transport expenses – costs incurred in getting to a pre-booked event by alternate means after a trip cancellation or disruption
What doesn't tour cancellation cover?
In each of the previous circumstances, events were beyond the foresight or control of the insured. In this section, we cover circumstances in which cancellation cover does not apply and these are largely due to negligence or lack of due care on the part of the insured or to liability on the part of the service provider.
Circumstances in which cancellation cover does not apply include:
- Flight cancellations caused by the carrier – most insurers will not cover cancellations if they are due to aircraft mechanical fault, overbooking or repairs, as the airline is responsible for compensating the insured in such circumstances
- Missed accommodation – if you miss out on prebooked accommodation due to a flight cancellation caused by the carrier, this too is not covered, as it is again considered the carrier’s responsibility to compensate the insured
- Missed flights – cancellation cover does not apply if a flight is missed because the insured failed to allow sufficient time to get to the airport and check in for their flight
- Cancelled leave – if your employer cancels your leave with the result that you cannot take your trip, this is not covered by cancellation insurance, as the insurer considers it your employer’s responsibility to compensate you
- Travelling when unfit – if a doctor has declared you unfit to travel and you fail to immediately cancel your prebooked trip or take your trip against your doctor’s advice, then no cover is provided for any cancellations that may result
- Under-booking – if your prepaid tour is cancelled because the operator is under-booked, cancellation insurance will not cover you
Why cancellation for supplier collapse isn’t covered
When we take out travel insurance, we expect to be covered for cancellations due to most unforeseen circumstances beyond our control. However, one circumstance that few insurers provide cancellation cover for and one that causes a good deal of confusion among travellers, is cancellation due to supplier collapse.
This can be called any number of things from financial insolvency to financial default, but the bottom line is, most insurers won’t cover it. The reason may be partly because there have been several notable collapses of airlines and travel companies in recent times. It may also be because more people are making their own travel arrangements online these days, using a range of providers with varying credentials and this means there is a greater chance of some of the smaller online providers going broke.
Whatever the reason, if you don’t want to be out of pocket due to the collapse of a supplier (who can be anyone from a carrier or accommodation provider to a travel agent or tour operator), then you need to take steps separately from your travel insurance. These could include:
- Asking your travel supplier whether they have insolvency insurance and obtaining a certificate of insurance before buying your travel from them
- Using your credit card chargeback facility to reverse the payment made to an insolvent travel supplier
- Registering with the receivers as an unsecured debtor to try and retrieve some of your money
- Applying for compensation from the Travel Compensation Fund (TCF) if the insolvent is a registered travel agent
- Lodging a complaint with the Financial Ombudsman Service (FOS)
Apply for cancellation travel insurance
Cancellation cover is an area of travel insurance where not everything is always cut and dried. However,it is important to have cancellation cover, particularly if you have paid for your holiday in advance.
Providing you read the fine print, there is every chance you have to cancel your trip, your insurance policy will compensate you for the money you have lost through no fault of your own.