Trip cancellation insurance reimburses you for non-refundable travel costs if you need to cancel your trip for a covered reason, protecting your investment and providing peace of mind.
Trip cancellation insurance is a valuable form of travel coverage that protects travelers from financial loss if an unforeseen event forces them to cancel their trip. This insurance reimburses non-refundable travel expenses, such as airline tickets, hotel bookings, and tour reservations, due to illness, injury, severe weather, or other unexpected circumstances.
For those seeking additional flexibility, many plans also offer optional Cancel for Any Reason (CFAR) coverage, which provides partial reimbursement even if the cancellation reason falls outside the standard policy terms. This type of insurance helps travelers safeguard their investments if life’s uncertainties disrupt their plans.
Benefits and Exclusions
Trip cancellation insurance is especially valuable if you’ve made large non-refundable payments for your trip, such as flights, hotels, or tours. It helps protect your investment by reimbursing you for prepaid costs if you must cancel for a covered reason.
This coverage can be critical if you’re traveling to regions prone to natural disasters or if unexpected health issues, job changes, or personal emergencies could interrupt your plans.
Typically, trip cancellation insurance reimburses non-refundable expenses when you cancel for one of the following covered reasons:
Sickness, injury, or death of the insured, a traveling companion, or a family member
Severe weather that prevents travel or causes delays
Natural disasters that make your destination uninhabitable
Military leave is being revoked or reassigned
Job loss or layoff, or being involved in a job relocation
Jury duty, court order, or subpoena
Terrorist incidents at your destination
Hijacking or quarantine
In short, trip cancellation insurance offers peace of mind by protecting you from losing your trip investment when life’s unexpected events force a change in plans.
Benefits of Coverage
Travel cancellation insurance policies protect you if you need to cancel your trip and are unable to travel. If this happens and you need to cancel for one of the covered reasons, you can recover your journey costs.
Below is a list of the expenses and amounts you may be reimbursed for with your trip cancellation insurance. Benefit amounts may vary, depending on the plan you choose:
Trip Cancellation: Coverage for 100% of the non-refundable trip cost, up to a maximum of $100,000
Trip Interruption: Covers up to 150% of the non-refundable trip cost
Trip Delay: Reimburses up to $3,000 with a per-day limit for delays of 6 hours or more
Missed Connection: Coverage up to $1,000 for missed travel connections due to a covered reason
Medical Coverage: Emergency accident and sickness medical coverage up to $250,000
Emergency Medical Evacuation and Repatriation of Remains: Coverage up to $1,000,000 for emergency evacuation
Baggage Loss or Damage: Coverage for lost or damaged baggage up to $2,500, with a per-item limit
Cancel for Any Reason (CFAR): Reimburses 75% of the non-refundable trip cost if you cancel for any reason not covered by standard policy terms (CFAR must be purchased as an optional upgrade)
Saved by Trip Cancellation Insurance – Example Scenario
An avid traveler, Emily had been planning her dream vacation to Bali for months. She booked her flights, a luxury beachside resort, and several local excursions to explore the island’s rich culture. Excited for the getaway, she purchased trip cancellation insurance just in case anything unexpected happened.
A week before her departure, a powerful earthquake struck Bali, causing widespread damage and making the resort she had booked uninhabitable. With her safety in mind, Emily had no choice but to cancel the trip. Thankfully, her trip cancellation insurance covered natural disasters, including earthquakes. She could recover the non-refundable costs of her flights, hotel, and prepaid excursions.
Thanks to her insurance policy, Emily avoided a significant financial loss and felt secure knowing that her investment in the trip was protected. This allowed her to plan another vacation for a later time when it was safe to travel.
Coverage Exclusions in Trip Cancellation Insurance
Trip cancellation coverage typically excludes several situations, including voluntary cancellations (such as deciding not to travel), financial issues unrelated to covered events, or cancellations due to pre-existing medical conditions unless a waiver is in place.
Similarly, non-covered reasons include staying home for personal events, like a family member having a baby or starting a new job. War, civil unrest, and travel to destinations under government advisories are also often excluded. Elective procedures, pregnancy (unless complications arise), and illegal activities are also not covered. Always review the policy for specific terms!
The Best Trip Cancellation Plans
Regarding the best trip cancellation plans, Trawick Pathway Premier and IMG iTravelInsured stand out for their comprehensive coverage and flexibility. Read more about each plan below.
Our Recommended Plans for US Citizens
Trawick Pathway Premier
Trawick Pathway Premier is considered one of the best trip cancellation insurance plans due to its comprehensive coverage and high benefit limits. The plan includes up to $100,000 for trip cancellation and $250,000 in primary medical coverage, making it an ideal choice for travelers seeking robust financial protection.
Additionally, it offers optional Cancel for Any Reason (CFAR) coverage, which reimburses up to 75% of the trip cost for reasons outside the standard policy terms.
Pathway Premier
Comprehensive Travel Protection and Travel Medical Insurance
Available to U.S. residents traveling for up to 90 days within the U.S. and internationally
Optional CFAR, IFAR, Rental Car Damage, and Adventure Sports coverage
The IMG iTravelInsured Travel plan stands out as a top choice for trip cancellation insurance. It offers extensive coverage and features designed for discerning travelers. With up to $1,000,000 in emergency medical evacuation and repatriation coverage, it provides substantial protection in critical situations.
Additional benefits, such as optional Cancel For Any Reason (CFAR) coverage, pet protection, adventure activity coverage, trip delay compensation, baggage loss reimbursement, and medical emergency support, make it especially attractive to those visiting remote or exotic destinations.
iTravelInsured Trip Cancellation Insurance
Three tiers of trip protection for U.S. citizens and residents traveling overseas
Includes $500,000 Emergency Medical and $1,000,000 Medical Evacuation coverage
Optional Cancel for Any Reason (CFAR) upgrade available
World Nomads Travel Insurance is an excellent choice for non-U.S. citizens seeking trip cancellation coverage. Read more about the World Nomads plan below.
World Nomads Travel Insurance with Trip Cancellation
World Nomads Travel Insurance provides comprehensive trip cancellation coverage, protecting travelers against financial losses due to unexpected events that require cancellation of their plans. Covered reasons include illness, injury, family emergencies, or natural disasters, allowing travelers to recover non-refundable expenses such as flights, accommodations, and pre-booked activities.
Additionally, the policy may cover cancellations related to unforeseen legal obligations or job termination, ensuring flexibility and peace of mind for those whose travel plans are disrupted.
World Nomads Trip Cancellation
Emergency medical evacuation and repatriation
Coverage for baggage and personal gear
Optional Cancel for Any Reason (CFAR) coverage for U.S. citizens and residents
Trip cancellation insurance costs typically range from 4% to 10% of the total prepaid, non-refundable trip cost. The price varies based on factors such as the traveler’s age, trip length, destination, and the amount of coverage selected. Optional add-ons, such as Cancel For Any Reason (CFAR) coverage, can increase costs. The cost will generally be higher for more expensive or longer trips due to the greater potential financial risk.
Trip Cancellation Plan Cost for Travel to Costa Rica:
Age of Traveler: 30
Nationality Country: United States
Destination Country: Costa Rica
Trip Length: 10 days
Trip Cost: $2,500
Trip Cancellation Plan Cost: $90
Cancellation vs Interruption vs CFAR
Trip cancellation, trip interruption, and Cancel For Any Reason (CFAR) are different types of coverage under travel insurance:
Trip Cancellation: Reimburses non-refundable trip costs if you cancel before departure due to covered reasons, such as illness, injury, or natural disasters.
Trip Interruption: This coverage reimburses additional costs incurred if your trip is cut short for a covered reason (such as illness or emergency) and covers unused portions of your journey.
Cancel For Any Reason (CFAR): An optional add-on allowing partial reimbursement (typically 50-75%) if you cancel for any reason not covered by standard policies.
Trip Insurance vs International Medical Plans
Often, you may be more concerned about covering medical expenses while traveling. In that case, a more comprehensive travel medical plan is advisable if you plan to travel abroad for less than one year. Otherwise, international health insurance is highly recommended if you plan to travel outside your home country for extended periods of a year or more. The latter is also preferable if you have additional medical needs that require coverage.
Travel medical plans are primarily designed to cover emergency medical expenses that might not be included in your existing policy. International health plans are even more comprehensive but often do not include some benefits of a travel medical plan (i.e., trip interruption or lost luggage benefits). Trip cancellation plans primarily insure the investment you have made in your trip expenses, with some additional emergency medical benefits.
Alternatives for Different Types of Travel
Expat Health Insurancecovers individuals living abroad for extended periods. Plans typically provide comprehensive health coverage in your country of residence, often including emergency evacuation services.
Travel Health Insurance covers medical emergencies while traveling, making it a good choice for international trips where your domestic health insurance doesn’t apply.
Short-term Travel Insurance is best for brief trips, usually lasting a few weeks. It covers trip cancellations, medical emergencies, and delays.
Annual Travel Insurance is ideal for frequent travelers who take multiple trips a year. It provides continuous coverage for up to 12 months, covering both domestic and international trips.
Single-trip Insuranceis best for one-off trips. It covers specific trips and is usually more cost-effective for occasional travelers.
Is Trip Insurance Worth It?
Trip insurance is ideal for traveling abroad or within your home country. Not only does it protect your travel expenses, but it can also help you get home safely in an emergency. However, while some medical expenses are covered in trip insurance plans, they are not recommended for anyone traveling internationally for prolonged periods because the coverage limits are too low.
If you are planning an extended international trip, please consider a travel medical plan. This provides far more extensive medical expense coverage, including trip cancellation, delay, and interruption.
Please get in touch with a member of our customer support team if you are still unsure which plan is best for you. We will be happy to assist you in selecting a plan and providing quotes for your travel arrangements.
FAQs
We typically recommend Trip Cancellation products if you have purchased more expensive trips well in advance of your departure.
Ideally, the best time to buy flight cancellation insurance is when you make your initial trip deposit. The trip cost and the time before traveling add the most risk, so it is worth investing in coverage.
Buying a policy for an inexpensive vacation that leaves in a couple of days might not make sense. The earlier you purchase the plan, the longer you are covered; therefore, the more value you get from the policy.
Trip cancellation insurance works by reimbursing you for non-refundable, prepaid expenses (such as flights, hotel bookings, and tours) if you need to cancel your trip due to a covered reason. Common covered reasons include illness, injury, natural disasters, or severe weather.
To get reimbursed, you must file a claim with the insurance provider, providing necessary documentation, like receipts, booking confirmations, and evidence of the cancellation reason. The insurer reviews the claim and issues reimbursement if the cancellation meets the policy’s coverage criteria.
To file a claim for each of the plans we discussed in this article:
Trawick Pathway Premier: You can file a claim by contacting Trawick International through their claims department or visiting their website to submit the required forms, including documentation of the reason for cancellation.
IMG iTravelInsured: Claims can be filed by submitting a claim form, relevant documents such as receipts, and a detailed explanation of the cancellation. IMG offers both online and paper submissions.
World Nomads: Claims are filed online through the World Nomads website. You must provide receipts, booking confirmations, and other supporting documentation.
Always refer to the specific policy details for exact filing instructions.
Yes, trip cancellation insurance generally covers canceled flights if the cancellation is due to a covered reason, such as illness, injury, severe weather, or a natural disaster. It will reimburse you for non-refundable, prepaid flight expenses.
However, the reason for the cancellation must meet the criteria specified in your policy. If the flight is canceled by the airline, some policies may cover rebooking fees, but typically the airline is responsible for refunding or rebooking canceled flights. Always check your policy for specific details.
Yes, trip cancellation due to severe weather can be a covered reason under many trip cancellation insurance policies. If weather conditions prevent your flight or make your destination uninhabitable, you may be eligible for reimbursement for non-refundable expenses.
However, the specific terms depend on the policy, and the weather event must typically cause significant travel disruptions, such as flight cancellations or government advisories. Always check your policy for detailed coverage related to weather-related cancellations.
Some people consider travel cancellation coverage a waste of money. But if you like to be prepared in case of an emergency, medical or otherwise, then investing in a trip cancellation insurance is money well spent.
Investing in a quality policy is money spent to protect your investment! And the further ahead you book your adventure, the more critical it is to protect your investment since a lot can happen in the weeks or months between booking a trip and departing for it.
It is essential to know that you cannot purchase coverage once you have departed (your plan start date). While it is possible to buy coverage right up until the start date of your travels, there are insurance companies that require you to purchase a policy within seven days of paying for the trip or no later than 48 hours before the trip departure.
Trip cancellation plans are best purchased when you pay your initial deposit or as close to the purchasing date as possible. If you buy coverage from a website at the last minute and then try to file claims, you risk the chance that the insurance company will closely scrutinize your case.
Travel cancellation products like these are designed to protect you against the worst-case scenarios associated with overseas travel. When offered this kind of insurance for your vacation, do not think of spending more money. Instead, think of it as protecting the money you have already paid and got additional safeguards for unexpected circumstances.
Mackenzie is the Director of User Experience at ICI, creating intuitive, user-centered digital solutions for global insurance clients. With expertise in UX design and content strategy, she simplifies complex offerings to improve accessibility for expatriates, travelers, and international employers.
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