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Trip Cancellation and Interruption Insurance
Sometimes, due to circumstances beyond our control, a much-planned trip has to be canceled or interrupted. A very important area of protection you would certainly like to have during your travel is your trip investment, meaning trip costs and extra expenses you incur in case of trip cancellation, interruption, delay, travel supplier bankruptcy, and other reasons.
No matter whether it is a trip you have been planning for a year or just a sudden desire to get away from it all for a week, you will benefit from purchasing a Travel Insurance policy before your trip. The investment you make in your travel arrangements can be very significant. If you cannot afford losing the substantial investment you have made in your trip, consider joining 7 million people who buy Trip Cancellation Insurance each year, obtaining adequate coverage for themselves and their families for their travel plans.
Trip Cancellation and Interruption Insurance protects policyholders in case they need to cancel or cut short their trip due of covered reasons. Trip Cancellation Insurance covers any mishaps that might force you to cancel the trip: sickness, injury, death of a relative, weather conditions, airline strikes, terrorism, financial default of the airline, cruise operator, or tour operator, job loss, traffic accident, cases when you are called to jury duty, subpoenaed or if your home is rendered uninhabitable due to fire, flood, etc.
If your tour was canceled, the insurance company will compensate the unused trip. Remember though that Trip Cancellation Insurance covers you only in case of a major unforeseen event that prevents you from going for a trip or makes your further travel plans impossible. Travel Insurance policies will not reimburse you in case you simply changed your mind about traveling. Also, if, for instance, an approaching hurricane is announced, it is no longer unforeseen and unexpected; thus the policy benefits purchased after that date may be considerably limited.
In the event you have to suddenly interrupt your nonrefundable trip and return home due to covered reasons (illness or death of the traveler or a family member, adverse weather conditions, airline problems, bankruptcy, terrorism, etc), Trip Interruption Insurance will reimburse you. If something happens in the middle of your trip, you will get a reimbursement for the unused non-refundable portion of the trip and transportation costs to return home. A good policy will pick up the costs to allow you to return home earlier if you have to interrupt your trip for specified reasons.
If you have to cancel your trip, you may be subject to paying cancellation penalties to the airline or tour operator. Should you cut your trip short and return home earlier, you might face even higher costs. In case the traveler has to cancel the trip and rebook a flight, the insurance company will cover the expenses.
In the event of a flight delay Travel Delay policy will reimburse you for accommodation, food or clothing expenses. In addition, some Travel Insurance plans may cover expenses for catching up to a cruise if a delay was the reason why you missed embarkation.
Travel Supplier Bankruptcy/Default Insurance plans provide coverage for lost travel expenses due to travel supplier going out of business and failing to render services. In essence, the insurance company should refund the amount that you have lost because of the operator's failure. Mind, however, that many insurers may exclude some travel suppliers from the list of those that can be covered, or may introduce some limitations to their coverage. Therefore it is recommended to find out what is covered before you purchase a policy. It is important to read the fine print and make sure that it does not limit the coverage to the provider declaring bankruptcy since many businesses tend to cease operation without actually declaring bankruptcy. Consider the financial stability of the travel supplier and the insurance company you use before purchasing travel insurance.
If you purchase your Trip Cancellation Insurance from your travel agent you won't be covered for the risk of that agency going bankrupt. Insurance plans offered to travelers by tour operators, airlines and cruise lines do not cover bankruptcy or default of those tour operators, airlines or cruise lines. This is exactly the sphere where Travel Supplier Bankruptcy/Default Insurance will help you out.
According to the U.S. Fair Retail Credit Billing Act, credit-card companies are required to refund payments for such goods and services as airline tickets, a tour or a cruise if the customer failed to receive them. If you make payments using a credit card, you are likely to be automatically covered. Thus, if you are a U.S. resident, paying by credit card will protect you from losses in case the travel supplier goes bankrupt. Call your credit card company without delay if your travel supplier ceases operation, since there are time limits on such refunds.
Some plans offer trip cancellation benefits due to terrorist attack in your destination country or city if it happened after you purchased the policy within 30 days of your scheduled arrival. Make sure you are aware how terrorism is defined in the policy since wordings may differ from policy to policy. Carefully read the clauses of the policy and find out whether Terrorism and War is covered in your destination country and city, and whether you will be protected in the event of trip cancellation due to terrorism.
If you have found the insurance policy with the most suitable protection for your situation, it is best to purchase it as soon as you book your trip. Buying vacation coverage in advance is a good idea because the sooner you purchase Travel Insurance before your trip, the longer time you will be covered. The premium amount remains the same regardless of when you buy the insurance package. In addition, if you postpone the purchase, you may experience some unexpected event that won't be covered. Trip Cancellation and Interruption insurance must be obtained within 48 hours of paying the non-refundable deposit on your trip and before any cancellation penalties apply.
If a traveler buys a Travel Insurance package at the time when he/she buys the trip, many policies offer additional coverage for pre-existing medical conditions and travel supplier default. If you have to cancel your trip due to some covered reason before the trip actually starts, you must notify the Claims Department as soon as you have learned about the cause preventing you from going. If you are aware of any event which may potentially ruin your travel plans at the time when you book your trip, this event will not be covered as a cause of cancellation.
Before you buy Trip Cancellation Insurance, review your existing policies and coverage provided by credit card companies. It will give you the necessary information on what types of policies you may need to purchase and stop you from double insuring your trip. You need enough coverage to protect you against potential losses should your trip be cancelled. At the same time, you may not need to insure the whole investment if you know that it is refundable. Make yourself familiar with cancellation policies of hotels, tours or cruise lines provide. Learn about the types of flight, train or cruise cancellations covered by the policy. Find out what exactly your policy will cover and how much you would be liable for before you purchase Trip Cancellation Insurance. In case your airline tickets can be easily changed for another date a deposit to a hotel is quite small, you may get along without this insurance.
Read the fine print of your policy very carefully. Make sure you understand the terms and wordings well. You might want to look for policies with broader terms and fewer limitations. For example, there are policies that will cover you for the entire trip, or just a portion of it. Some policies won't cover pre-existing health conditions. It means that if you have to cancel your trip because of an illness that your doctor has been treating you in the last 1 to 6 months, you will be left with your expenses on your own. However, policies differ, and some plans tend to cover stable pre-existing conditions in case you purchase the Trip Cancellation Insurance within 14 days of your initial trip deposit.
You can purchase Travel Insurance on a per trip basis, thus adding to over 80 percent of Travel Insurance policies bought by Americans to cover a trip. A per trip Travel Insurance policy will cover trip cancellation, interruption, delay, lost, stolen, damaged or delayed luggage, medical expenses and medical evaluation. If you are a frequent traveler, and normally travel several times a year, consider obtaining an annual plan. It offers medical and medical evacuation coverage since Health Maintenance Organization (HMO) policies do not normally cover these services if they occur out-of-area.
The cost of per trip and annual policies vary. It pays to shop around and make a research about available policies using the Internet, and getting recommendations from several travel agents and from your friends. The prices are based on the cost of the trip itself, the traveler's age and the amount of coverage required. Generally the cost of Travel Insurance is 5 to 8 percent of the total vacation price. A trip worth $5,000 would cost about $250-350 to protect.
Many cruise and tour operators offer inexpensive Cancellation Waivers. However it should be noted that they are not proper insurance and not regulated by the state department of insurance. Cancellation Waivers are purchased at the moment you book the trip and will not cover you immediately before departure or after the trip has started. They have many restrictions and are unlikely to cover you in case your tour or cruise operator has financial problems.
You can purchase Trip Cancellation Insurance from travel agents, travel suppliers or travel insurance providers. This type of Travel Insurance provides you with peace of mind and necessary protection in case something unexpected occurs. It allows you to save your travel investment and re-schedule your travel plans once the problem is solved.