Do I need trip cancellation and interruption insurance?

What is trip cancellation insurance for?

Trip cancellation and trip interruption are two different types of coverage. They’re often sold together but serve entirely different purposes.

Trip cancellation insurance covers non-refundable prepaid expenses. Here are some examples of what can be covered:

• Airline tickets
• Excursions
• Side tours
• All-inclusive packages
• Accommodations
• Deposits

Cancellation insurance not only covers expenses you paid before departing, but also those you incurred during the trip. For example, excursions booked and paid for a few days in advance at destination are covered.

What is trip interruption insurance for?

Trip interruption insurance covers additional expenses incurred when circumstances beyond your control occur during your trip and prevent it from happening as planned. Of course, the situation must meet your insurer’s eligibility criteria.

For example, this type of insurance covers:

• Meals and hotel rooms when flights are cancelled or delayed
• Airfare home when your trip is unexpectantly cut short
• Seat change fee to accommodate a broken leg
• Excursions and tours booked at destination that you did not have time to do

When should I buy trip cancellation and interruption insurance, and how much coverage should I get?

The best time to take out cancellation insurance is when you purchase your trip or make a deposit. You decide on the coverage amount. Be sure to correctly calculate all non-refundable expenses paid per person, along with other expenses you expect to pay. The coverage amount you set will be the maximum reimbursement you can receive, even if your trip ends up costing you more than your coverage amount. Naturally, the insurance cost will vary depending on the coverage amount.

I bought a last-minute travel package. Do I need trip cancellation insurance?

Say you’ve booked a trip the day before departure. Since the odds of cancelling the trip are very low, you decline cancellation insurance or enter $0 as the insured amount, thinking that interruption insurance will be enough. You may want to think twice!

What reasons are covered for trip cancellation or interruption?

Covered reasons depend on your insurance type. For most cancellation insurance, only perils named and specified in the policy are covered. The event forcing the cancellation or interruption of your trip must be unpredictable, out of your control, and sufficiently serious.

Please note that any situation you are aware of prior to taking out insurance will likely be rejected by the insurer as a reason for trip cancellation or interruption.

Can I cancel my trip if I don’t receive my passport in time?

Yes and no. It all depends on your situation and the all-important notion of unpredictability:

Yes if your insurance was already issued and your passport application was submitted far enough in advance according to Passport Canada recommendations. You are then eligible to request cancellation because you could not have predicted the delay.

No if you are still waiting for your passport and are buying travel insurance at the last minute to cover the risk. Your claim will be refused.

Can I cancel or interrupt my trip because of COVID-19?

COVID-19 and all related situations are considered unpredictable and therefore qualify for the various benefits and coverage offered by your policy, unless there is a government advisory against travel due to COVID-19. Please note that concerns (or fears) about travelling due to a resurgence of the virus, at home or at your destination, are not a valid reason to cancel a trip.

Here are some specific examples of situations where trip cancellation and interruption insurance would come in very handy, as long as the insurance was purchased when no government travel advisory was in effect: 

1. You test positive for COVID-19 before you leave and can’t board the plane.
2. A new government advisory to avoid non-essential travel is issued before you leave, and you have to cancel your trip.
3. The government advisory to avoid non-essential travel is issued while you are away, and you have to return early.
4. You test positive for COVID-19 while travelling and have to quarantine at your hotel for a few extra days. In that case, your living expenses (accommodation and meals) will be covered as well as your return plane ticket.