What is Trip Cancellation Insurance?

By Ashley Lulling

3 minutes


Trip cancellation insurance covers the cost of your trip if you need to cancel for a covered reason. The key word here is “covered” and it’s important to read the fine print to understand what your particular plan covers and what it doesn’t.
What Standard Trip Cancellation Insurance Covers

Common covered reasons include illness, injury, and death of a loved one. Some plans may exclude epidemics/pandemics and may not provide coverage for related issues (e.g., quarantines). Please be sure to read the plan details carefully before purchasing.

Some plans may exclude epidemics/pandemics or coverage for related issues.
Some plans may exclude epidemics/pandemics or coverage for related issues.
Image courtesy of Pixabay

Usually, once an event becomes a “known” event, it’s not a covered reason for cancellation if you purchased the insurance after the date it became “known.” Standard travel insurance helps cover unexpected events.

Deciding to cancel a trip because you’re anxious about a potential storm or you decided you don’t want to spend the money is not a standard coverage item. That’s where “cancel for any reason” comes into play.

If a storm is a “known” event at the time you purchase insurance, it won’t be covered.
If a storm is a “known” event at the time you purchase insurance, it won’t be covered.
Image courtesy of Pixabay

“Cancel for Any Reason” Coverage

If you want the peace of mind (and flexibility) that no matter what reason you decide to cancel, you’ll receive reimbursement for some of your trip—then you want to purchase a “Cancel For Any Reason” (CFAR) policy.

Usually, the CFAR policy must be purchased within 20 days or so of making the initial trip deposit. The specific timeframe and refund amount will depend on the particular policy provider. Some providers refund up to 75 percent of your trip, others may offer only 50 percent. CFAR inclusion will increase the cost of your trip cancellation plan—usually by 7-10% of your standard policy (which will depend on the cost of your trip and your age).

New Yorkers: Due to a state regulation you’re not eligible for “Cancel for Any Reason” insurance.

Options to Consider:

IMG’s Travel LX Plan

  • “Cancel for any reason” Benefit covers 75% of the total trip cost
  • Must purchase the trip cancellation plan within 20 days of the initial trip payment
  • Must insure 100% of the prepaid trip costs and cancel your trip two or more days before your scheduled departure

Seven Corners

  • “Cancel for Any Reason” Benefit covers 75% of the total trip cost
  • Must purchase the trip cancellation plan within 20 days of the initial trip deposit
  • Must insure 100% of the prepaid trip costs and cancel your trip two or more days before your scheduled departure

Travelex - Travel Select Plan

  • Must purchase “Cancel for any reason” upgrade within 21 days of the initial trip deposit date and at time of initial plan purchase
  • Covers 75% of total trip cost (50% for Florida residents)
  • Must insure all prepaid, non-refundable trip cost subject to cancellation penalties or restrictions
  • Report your cancellation with all traveler suppliers as well as the Claims Administrator at least 48 hours prior to your scheduled departure date
  • Maximum Trip Cost is $10,000 per person

For more options, check out insuremytrip. They let you compare policies from multiple travel health insurance providers.

InterExchange is not an insurance broker or advisor. Please consult a professional insurance agent before making decisions regarding your travel medical insurance coverage.

Ashley Lulling Ashley Lulling

After earning a M.A. in Diplomacy & International Relations and teaching English in South Korea, Ashley joined InterExchange to promote cross-cultural understanding and help others have amazing experiences abroad.

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