Travel insurance for cancellations

What is travel insurance for cancellations and flight delays?

If you have to cancel your trip for a reason outside of your control, travel cancellation insurance will make sure you don't lose out on any non-refundable expenses that you've already paid for. It can help cover the cost of prepaid accommodation, travel and any deposits that you've already put down.

Most comprehensive travel insurance policies cover cancellations. It's not typically included with basic travel insurance policies.

Travel delays is a separate benefit that's also included with most comprehensive travel insurance policies. It can pay for reasonable costs related to trip disruptions – for example, accommodation if you become stranded.

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What is covered by travel cancellation insurance?

Here are some examples of prepaid travel expenses that you can claim back on cancellation cover:

• Cancellation fees charged by airlines, hotels, tour operators, rental car companies and more
• Non-refundable deposits for pre-booked flights, accommodation, tours and more
• Travel agent cancellation fees
• Lost frequent flyer points that cannot be recovered (find a credit card offering frequent flyer points)
• Additional travel expenses if you need to return home early from your trip
• Tuition fees if you had paid for a course or training at your travel destination

What isn't covered by travel cancellation insurance?

As we touched on above, travel insurers only cover you when you need to cancel or cut your trip short due to situations that are unexpected and outside your control. That means no cover will be provided if:

• You change your mind. You can't cancel your trip "just because" and expect to get reimbursed.
• You need to cancel because your visa is denied or you have passport issues. It's up to you to make sure you have permission to enter the country you are visiting. Your insurer won't pay for your cancelled trip if you've made the assumption that your visa would be granted or that your passport would arrive on time.
• Your best friend dies. Most policies clearly state that you can only claim for cancellation if it is a relative who dies. They will make it clear in the fine print what they mean by relative.
• You get reimbursed by the provider. You can't double up if you're eligible for a refund through your trip provider like your hotel. Your insurance will only pay for prepaid expenses that you can't get back any other way.
• You travel against your doctor's advice. Travelling against medical advice is a key exclusion on all policies. However, if you cancel your trip because your doctor says you're unfit to travel, you'll be covered for cancellation fees and lost deposits.
• Your tour is under-booked. If you've pre-booked a tour on your holiday and then it's cancelled due to under-booking, your policy won't provide any cover. It will be up to the tour provider to either reschedule your trip or provide a refund.
• You purchase after something happens or there has been a warning. Your insurer won't cover you if you bought your insurance after there had been reports of an approaching hurricane, social unrest or whatever it is you are trying to claim for.

How to find the best travel cancellation insurance for you

The best policy for a person might not be the best policy for another, so your ideal policy comes down to your specific requirements. Here are some tips on how to settle on the right policy:

• Determine your needs and budget. Weigh up how much you are spending on your trip with the likelihood of having to cancel and how much it would hurt to lose that money if you did cancel. This helps you decide how much cancellation cover to get.
• Look at what is covered. Check the fine print of a few policies to find out what exactly they accept for a cancellation claim. For example, some insurers will cover you if you cancel because your first cousin or aunt passes away. Others limit it to immediate family only.
• Look at what's not covered. It's important to know exactly what your policy won't cover you for. For example, some policies won't cover you if you have to cancel because you were injured skiing if you haven't purchased their optional ski cover as well.

Frequently asked questions

• When should I buy travel insurance to get cancellation cover?

  Most insurers require you to purchase your policy soon after you make your first travel booking or deposit. This ensures you have cover from the earliest possible point for unexpected events that might lead to cancellation. Check your policy's Product Disclosure Statement (PDS) for specific timeframes.

• What is the maximum payout for a cancellation claim?

  Each travel insurance policy has a maximum benefit limit for cancellation cover which can vary significantly between insurers and policy levels. This limit is typically outlined in your policy schedule or Product Disclosure Statement (PDS). You should review this carefully to ensure it adequately covers the non-refundable expenses of your trip.

• If my travel companion cancels their trip, can I also claim for my cancellation?

  It depends on the reason for your companion's cancellation and whether they are listed on your policy or covered under a separate policy. If your companion cancels due to a covered event and you no longer wish, or are able to, travel alone, your policy may cover your cancellation too. Always check your policy details.

• Does cancellation cover protect me if my airline or tour operator goes bankrupt?

  Some comprehensive travel insurance policies offer cover for the financial default of an airline, cruise line or tour operator. However, this is not always standard and often has specific conditions or sub-limits. It is important to check if this benefit is included in your chosen policy's Product Disclosure Statement (PDS).

• Can I claim for cancellation due to a pre-existing medical condition?

  Generally, you will only be covered for cancellation due to a pre-existing medical condition if you have declared it to your insurer and they have agreed to cover it, often for an additional premium. If you do not declare a pre-existing condition, any claim related to it will likely be denied.

• What documents do I need to make a cancellation claim?

  To make a cancellation claim, you typically need to provide evidence of your prepaid non-refundable expenses such as booking confirmations, receipts and invoices. You will also need documentation to support the reason for your cancellation such as a medical certificate, a death certificate or a police report if applicable.

To make sure you get accurate and helpful information, this guide has been edited by Tim Bennett as part of our fact-checking process.

Written by

Gary Ross Hunter

Journalist

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Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

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