Travel Insurance and Cancellation

Travel Insurance for Trip Cancellation

Need travel insurance to cover flights and accommodation if you have to cancel your trip?

Travel insurance with cancellation cover lets you claim back certain expenses from your insurance provider in situations where all or part of your trip is cancelled.

Common causes of trip cancellation include:

  • Flight delays and cancellations. Airline's can delay flight's last minute, creating costs for the unlucky ticket holder during the wait. Travel insurance will cover you in the event your flight is cancelled due to severe weather or strike. If your flight is cancelled for any other reason, it is up to your airline to reimburse you for any costs related to ticket cancellation.
  • Dangerous political situations. Civil unrest within a country can be damaging your plans of travellers and result in cancellations.
  • Extreme weather and natural disasters. An unexpected snowfall can in some cases disable your ability to enter a country.
  • Unforeseen circumstances back home. A loved one back home could fall ill, requiring you to put an abrupt halt your travels.

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What exactly does travel cancellation cover?

Cancellation cover allows a traveller to recover lost deposits and cancellation fees for prepaid travel arrangements resulting from unforeseen circumstances. Therefore, it doesn’t just apply to the cost of flights but extends to other prepaid arrangements such as accommodation and planned activities. When assessing any type of insurance, the extent of coverage will depend on a specific policy. However, most travel insurance companies’ cancellation coverage extends to a number of situations.

Most cancellation travel insurance policies will cover the costs of:

  • Cancelled pre-booked flights. If your flight is cancelled because of a strike or severe weather conditions.
  • Accommodation. Any paid accommodation that that is cancelled or the cancellation charge.
  • Hired equipment. Any equipment that you have paid for such as a ski gear, car hire, etc.
  • Activities. This will include activities you have paid for such as bungee jumping, fishing tours.
  • Costs as a result of weather cancellations:
    • Cost of accommodation and food that is required if a flight is cancelled due to weather
    • Cost of new flights when flight is cancelled due to weather.
    • Lost frequent flyer points if a flight is cancelled because of extreme weather.
    • Hired equipment. If extreme weather prevents you from taking part in scheduled activities, cancellation travel insurance allows you to recover the costs for hired equipment. For example, if bad weather disrupted a pre-booked skiing trip, you may be able to claim back the costs of hiring gear.

When else will I be covered if I have to cancel?

  • Unexpected illness of you or a someone travelling with you
  • Death or hospitalisation of a family member who is not travelling with you
  • Unforeseen natural disasters or extreme weather
  • Legal obligations such as court appearances

See how the ash cloud in Bali affected cancellation travel insurance

How much will my policy actually cover?

Most policies will cover the total cost of your trip, but only up to a maximum limit specified in the product disclosure statement. Additionally, if there are booked items like flights or accommodation that do have refund clauses, insurers will typically only reimburse you the cancellation charge and leave you to obtain a refund from the airline, hotel or travel agent. This can be inconvenient, especially if say the airline only refunds in the form of credits. Having a $2,500 flight credit will not be useful in the interim if you only travel once a year.

That said there are a number of comprehensive policies that offer unlimited cover for cancellation cover on the policy.

What pre-booked expenses will I actually be covered for under cancellation?

  • Cancellation fees and lost deposits for accommodation and travel arrangements that you have paid for in advance.
  • Fees that have been charged by the travel agent.
  • Loss of frequent flyer points that were used to purchase the airline tickets.
  • Tuition or course fees for study you are undertaking overseas.

When will my airline cover me for cancellation?

I missed my connecting flight because there was a change to my scheduled flight ... will my airline cover me?

Not necessarily. Most airlines will only offer you a flight credit if you can't travel due to unexpected circumstances. This is also the case if your flight is cancelled or delayed due to weather.

What if the cancellation or delay is the fault of the airline e.g. aircraft maintenance or sick crew members?

If the cancellation or delay is the fault of the airline, the airline will either:

  • Put you on the next scheduled service when room becomes available or reroute you to your destination with another airline at no additional cost.
  • Provide you with a refund.

Does travel insurance cover strike or civil action from the airline?

Generally yes. If your flight is cancelled because the airline staff is on strike, you should receive compensation from your travel insurance policy. If your flight is reimbursed or rebooked by the airline, you will not receive any compensation from your insurance provider.

It is worth noting that some policies will only cover you if the strike is "unforeseen". If there has been ongoing strikes from the airlines staff that have been reported on in the media, you may not be liable to receive compensation. It is worth clarifying this with your insurer at the time of application.

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Conditions and exclusions you should know about

Not all claims are successful. In fact, one of the biggest misconceptions about travel insurance is that the insurance provider will cover all costs associated with any cancellations. If for any reason your trip is cancelled and you feel like you are entitled to make a claim, remember to gather as much substantiating evidence as you can. Your insurer will normally cover you for situations when a pre-booked flight is cancelled due to a strike or weather conditions.

  • Most policies will not cover flight cancellations related to rescheduling mechanical fault, overbooking, or repairs, as the airline, bus line or rail authority is responsible for compensation in situations such as these.
  • Your insurer will not cover you if you miss your flight due to your own negligence. For example, if you turn up at the airport 15 minutes before your flight is supposed to leave, your insurer will not pay you a benefit as you failed to leave yourself with sufficient amount of time to check in to your flight.
  • You will not be paid if you or your travelling companion simply changes your travel plans.
  • Any cancellation due to financial, contractual or other business obligations, unless due to unexpected redundancy.
  • If your tour operator or wholesaler is unable to complete a pre-booked tour because not enough people have signed up for the tour.
  • If you have to cancel your trip due to the death or sickness of any person that does not reside in your home country. This may vary between insurers.
  • If your employer cancels your pre-arranged holiday leave.
  • Costs incurred after you return home.

Note: Pre-existing medical conditions.

If you suddenly have to cancel your trip due to your own or family members known pre-existing medical condition, your cover could be void. This same exclusion applies for known pregnancies.

Read more about getting travel insurance with pre-existing medical conditions

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When should you buy cancellation travel insurance?

Travel Insurance is not always a high priority on your holiday to-do list and it’s easy to leave it until the last minute. To make sure you are protected against cancellation, be sure to take out your insurance policy as soon as you make significant pre-paid travel arrangements. This might include flights, accommodation or tours.

"Why? I have plenty of time between now and when I go away."

Let’s say for the sake of argument that you book your flights three months before your planned departure date. Then, two months down the road, you think to yourself, “I should take out some travel insurance.”

But when you go to take out your policy you discover that there is political unrest in the country you were planning on visiting and it’s too dangerous to travel there now. If you had bought insurance at the time you booked your flights, you may have been able to recover the money you paid for the tickets.

"Will I pay for more because I am booking my travel insurance earlier?"

No. You will only pay for the period of cover that you purchase for i.e. your travel dates. You will be covered for trip cancellation from the date you purchase the travel insurance but only pay for your own travel dates.

Learn more about when to purchase your travel insurance

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Can I get cancellation for any reason insurance?

Unfortunately no. In Australia, there aren't any policies that provide cover for any reason. Most policies provide cancellation cover for specified reasons such as:

  • Death
  • Strike
  • Natural disaster
  • Injury

What do any reason policies cover?

While you're unable to get this cover in Australia, these are available in other countries. Typical conditions for any reason cancellations include:

  • Policy can only bought within a window of trip being paid for e.g. 15 or 30 days
  • 100% of cost of prepaid, non refundable trip items are insured
  • Cancellation with travel vendor e.g. airlines, hotels must occur a minimum time before departure e.g. two/three days
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Can I buy a cancellation only travel insurance policy?

Although comprehensive travel insurance offers cancellation cover as part of its package, you can also find standalone cover for travel cancellations. Quite often, airline carriers and insurers will offer barebones Travel Cancellation Insurance with little to no medical cover. Here are some of the benefits of buying standalone travel cancellation insurance.

  • A more flexible, tailored cover choice. You know how much risk you are willing to take, and you may feel like trip cancellations is the only significant financial risk in your next travel.
  • Making up for shortfalls in your coverage. You could potentially combine a standalone travel cancellation policy with your existing travel insurance policy if it lacks adequate cancellation cover.
  • Specialised support for: Lost passports, embassy referral, emergency messages, weather information and refunds.

Interested in covering just cancellation and your luggage? There are options available

While does not currently feature any cancellation only policies, there are a number of basic policies that will just cover your luggage and trip cancellation for an affordable rate. Check these options out in the table below:

Brands Product Product Details Apply
STA Travel Insurance Cancellation and Luggage

$5,000 cancellation fee

$250 delayed luggage

$50,000 luggage and personal effects

Get quoteMore info
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How to choose a policy

When choosing a cancellation travel insurance policy, things to consider include:

  • Compare multiple insurance products – use out quote engine for simplicity
  • Make sure to read the product disclosure statement, as this is the best way to determine exactly what situations you will be covered for. If you are confused about any of the clauses, it is best to contact the insurance provider for clarification
  • Check the policy exclusions. Understand everything that you are covered for and don’t make assumptions
  • Where are you travelling? Make sure that all countries that you are visiting are covered by your policy. Find out more about how cover is impacted by countries with travel warnings
  • Consider where you are travelling to and the risk of civil or political unrest or extreme weather
  • The chance flight delays or cancellations can have a domino effect on your other bookings. Make sure your insurer will cover you for missed connections
  • Are you paying upfront for hired equipment such as ski equipment? Make sure those costs are covered in case that part of your trip is cancelled
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Some final questions you may have

Can I get a cancellation only travel insurance policy?

Most basic travel insurance policies offer at least one other cover feature than cancellation, this may include luggage or medical cover. You can still get cover at an affordable rate but it is rare to find cancellation only travel policies. Even policies from airlines will also generally also cover your luggage.

What's the best travel insurance for flight cancellation?

Unfortunately, we can't tell you what is the best policy for your situation. It will come down to your own cover requirements. There are comprehensive policies that will offer unlimited cover for trip cancellation. You will need to review the policy exclusions and benefit conditions in order to determine whats right for you. Also be clear on the excess you will be liable to pay in a claim.

Does travel insurance cover me if I change my travel plans?

No. As stated previously, you will not be covered by travel insurance if you simply change your travel plans. You are only covered for cancellation or trip amendment for reasons that are outside of your control.

Can I cancel my travel insurance policy and get a refund?

Yes, all policies offer a cooling-off period from the date the policy is purchased that you can cancel your cover and get a full refund. This is usually about between 14 and 30 days and will only be paid if your policy or trip has not commenced.

Am I covered if I can't travel due to work related issues/events?

You will only be covered if you can't travel because you or your travelling companion have been unexpectedly made redundant.

Will I be covered if I have to cancel my threat due to a terrorist threat?

It will depend on the policy you choose. Some insurers will provide cover for claims related to terrorist threats while others will exclude it. You can find out who will offer cover terrorism here.

Does travel insurance cover me if I have to change my flight? Will I be covered for the additional charges?

You are only covered if you have to change your flight for reasons that are outside of your control such as unexpected illness/injury, death of family member, legal obligations and unforeseen natural disasters and bad weather.

Will my travel insurance cover timeshare costs and losses?

Typically not. The actual timeshare fees themselves are not covered by travel insurance, and are typically not refundable. If you’ve planned a trip to your timeshare, but had to call it off, travel insurance might pay for peripheral expenses including prepaid travel costs, Pre-booked hotel or motel accommodation, Unexpected travel expenses associated with delays, such as reasonable accommodation costs. For direct cover the actual timeshare costs, such as membership and management fees, you will generally need a specialised timeshare travel insurance provider.

My passport hasn't arrived in time. Can I cancel my trip?

Unfortunately you will not be covered if you have to cancel your trip due to your passport not arriving on time.

Can I cancel my trip if I start a new job and can't get time off?

No. Cancelling a trip for work reasons, whether to start a new job or because holiday has not been approved will not be covered.

Can I cancel my trip due to pregnancy?

Cancelling your trip due to pregnancy or childbirth is generally excluded. However, some policies will provide cover if you become pregnant after the policy has become active.

Can I cancel my trip if I have jury duty?

Yes, most travel insurance policies will provide cover if you are required to cancel your trip due to jury duty.

What exactly is inclement weather?

Inclement weather is generally defined as severe weather conditions that result in delays of the arrival or departure of the airline, cruise, train or other transport carrier.

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Richard Laycock

Richard is the senior insurance writer at and is on a mission to make insurance easier to understand.

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12 Responses to Travel Insurance for Trip Cancellation

  1. Default Gravatar
    Wendy | April 7, 2017

    can you get insurance to cover your deposit for a cruise which is not going until mid next year? How do I ensure I don’t lose my deposit for any reason

    • Staff
      Zubair | April 11, 2017

      Hi Wendy,

      Thank you for your question. is a comparison and information service and we are not permitted to provide our users with personalised financial advice or product recommendations.

      Generally, most travel insurance brands won’t allow you to take out cover more than one year in advance, insurers do this to minimise their own risk. However, It could be a good idea to check with your trip provider to see if they have any cancellation cover options.

      All the best,

  2. Default Gravatar
    Roger | February 17, 2017

    My son is looking at doing the Youth World Challenge through his school. The cost is approx. $8,600, which has to be raise by the school, family and students. However a deposit and regular payments are required at regular intervals with a lump sum due near the date. As the dates are not set, and that the time has been reduced from 15mths to 9mths for the payment, if we have to cancel due to not being able to raise the funds, will the cost be covered by insurance?

    • Staff
      Zubair | February 20, 2017

      Hi Roger,

      Thank you for your question.

      Generally, travel insurance does not provide cover for cancellation due to financial, contractual or other business obligations. For more clarification on this matter best to consult the product disclosure statement or insurer directly.


  3. Default Gravatar
    | January 6, 2017

    I bought Travel Insurance with Insure and GO on the 2nd September 2016 for a trip which commences on the 27th September 2017 for 32 days.
    They charged me $690 for two adults which included an extra $427 surcharge for a pre-medical condition.

    The airline are willing to refund in full because they changed my flight details so the only other cost for the holiday is about $200 for accommodation for a stop over each way.

    There is an excess of $100 per claim on the policy.

    Can I claim any of the pre-medical declaration costs as these will not apply until travel begins as we now cannot travel due to my wife having a serious illness which was not diagnosed until December last.

    • Staff
      Richard | January 9, 2017

      Hi Peter,

      Thanks for getting in touch. You will need to contact InsureandGo’s claims department about these matters.

      All the best,

  4. Default Gravatar
    Lmshortie | November 23, 2015

    HI, We are planning a family trip to NZ for a family birthday and my husband runs a small business and works everyday can you get insurance to cover if he is unable to come with us do to work issues or is it only medical issues? Thanks

    • Staff
      Richard | November 23, 2015

      Hi Lmshortie,

      Thanks for your question. You may be able to find cover but it would depend on the policy and the reason for cancellation. For example, if he was unable to travel due to an unforeseen incident befalling a business partner, he may be able to make a claim. These conditions vary from provider to provider so you’ll need to ask them about your specific concerns prior to taking out cover.

      I hope this was helpful,

  5. Default Gravatar
    Minna | November 21, 2015

    We are planning to hire a car in Europe next year. We will need to make a number of payments for flights, car hire etc. the main concern is an elderly family member aged 87, who may pass away at that time. Most policies will not cover a family member dying if they are over the age of 80 – 85. Can you recommend a policy that will cover us?

    • Staff
      Richard | November 23, 2015

      Hi Minna,

      Thanks for your question. is a comparison service and we are not permitted to provide personalised financial advice or product recommendations. Unfortunately we do not have access to that kind of information.

      All the best,

  6. Default Gravatar
    Peter | June 29, 2015

    Hi there,
    I understand that it is possible to purchase travel insurance cover for cancellation for any reason. Could you tell me which companies in Australia provide this type of insurance.

    • Staff
      Richard | June 29, 2015

      Hi Peter,

      Thanks for your question. Many of the providers in our panel of some cover for cancellation. If you would like to compare your options, simply enter your travel details into the comparison tool. Once you have done so you will be able to view the products we compare and the level of cancellation covered by consulting the second column.

      I hope this was helpful,

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