Trip Cancellation Insurance is a kind of insurance which covers trip cancellation for specific covered reasons. It specifically applies when a person booked a trip within the policy period and that for some reason, the passenger has to cancel said trip which must be done before the departure. In order for the cancellation insurance claim to be valid, the reason for the cancellation must be something that is beyond the control of the passenger. Another condition is that the passenger must be unaware of the reason for the cancellation at the time that the booking was made. Mainly, a trip cancellation insurance is purchased in order to remunerate the passenger with the cost of the trip and other related expenses due to the unexpected reason for the cancellation of the travel.
Generally, cancellation insurance covers the following reasons for the trip cancellation: (1) unpredicted illness, death of the passenger, a close relative or any person which the passenger has arranged to travel with or stay with during the trip; (2) when the passenger abandons the trip due to a delay of 12 hours in the departure of the outward flight, sea crossing, international coach or train journey which forms part of the trip’s schedule which was caused by industrial strikes, dangerous weather conditions, mechanical failure or accident of the airplane, sea vessel, coach or train; (3) when the passenger or any person who was suppose to travel with him were called up for jury duty or was being subpoenaed as a witness in any courts of law, if the passenger is fined for redundancy payment, accidental damage, burglary, flooding or fire which affected the home of the passenger which occurred within 48 hours before the assigned departure; (4) when there is a lost relating to the home of the passenger which involves a considerable amount of money and that the passenger is involved for police investigation regarding such incident.
Trip Cancellation Insurance must be availed of before departure. The following are the covered costs of a trip cancellation insurance: prepaid non-refundable trip costs, cancellation penalties, prepaid trip costs if travel companion cancels the trip for a covered reason, and other costs as may be included in the policy.
It is wise to purchase a trip cancellation insurance which may also cover trip interruption, travel delay, emergency medical expenses and medical evaluation and repatriation. Most insurers, depending on the kind of insurance purchased, may also cover travel schedule change and missed connection.