Need travel insurance to cover flights and accommodation if you have to cancel your trip?
Just discovered that you're no longer able to go on your dream trip to NYC? There are a lot of misconceptions around travel insurance and cancellation cover. Unfortunately, many travellers do not understand what situations they are covered for, leading to disappointment.
This article will highlight what kind of cancellations your travel insurance should be covering you for and what to look for in a policy.
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Why do I need cancellation cover?
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.
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 brands’ cancellation coverage extends to a number of situations.
If you employ travel cancellation cover, you should be protected for:
- 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. This includes the cost of new flights, accomodation, and food if a flight is cancelled due to weather.
- Illness. If you or someone you're travelling with falls ill then you will be covered for losses. You will also be covered in the event of hospitalisation or death of a family member, even if they're not travelling with you.
- Pre-booked expenses. You will be covered for cancellation fees and lost deposits for accommodation and travel arrangements that you have paid for in advance. You will also be reimbursed for fees that have been charged by the travel agent.
Reading the fine print: know what's excluded
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.
- 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.
- 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.
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.
Can I get 'cancel for any reason' coverage?
Unfortunately not. In Australia, there aren't any policies that provide cover this type of coverage. Most policies provide cancellation cover for specified reasons such as death, strike, natural disaster, and injury.
What do any reason policies cover?
While you're unable to get this cover in Australia, this type of policy is 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
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.
How to choose a policy
When choosing a cancellation travel insurance policy, things to consider include:
- Compare multiple insurance products. Our quote engine makes this really easy to do.
- 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.
When should you take out cancellation cover?
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.
Some other 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.
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.