What Is Trip Cancellation And Interruption Insurance?

While you can purchase a travel insurance policy from a provider that includes crucial coverage like trip cancellation and interruption insurance, many people get this type of insurance through their travel credit card.

Travelers with this protection can get reimbursed when their trip is canceled or interrupted for certain reasons beyond their control, such as an unexpected illness, an injury or a flight cancellation. Not only that, but credit card travel insurance is offered as a complimentary benefit, meaning you don’t have to pay for a separate policy each time you leave for a trip.

Before you rely on trip cancellation coverage or trip interruption insurance through a credit card or a separate travel insurance policy, you should know how these coverages actually work and when they apply.

What is trip cancellation and interruption insurance?

While trip cancellation coverage and trip interruption coverage are often grouped together, these two coverages actually apply in different situations. For instance, trip cancellation coverage reimburses travelers when their trip is canceled altogether for eligible reasons, whereas trip interruption coverage provides reimbursement for some prepaid travel expenses when a trip is interrupted after it has already started.

With both types of insurance protection, reimbursement only applies in eligible scenarios that are beyond a traveler’s control. This means that you can’t just cancel your trip for any reason and get your money back, nor can you decide to leave your trip early and successfully file for reimbursement.

If you buy travel insurance instead of getting it through certain travel credit cards, you may be able to purchase trip cancellation and interruption insurance separately. In other cases, it may be a part of the included benefits within a travel insurance plan.

Trip cancellation vs. trip interruption coverage

Trip cancellation and interruption coverage can be worth it if you find yourself canceling or ending a trip early for certain reasons beyond your control. However, coverage limits and other policy details vary by card and by policy, so you’ll want to read over the specifics of your coverage before you plan on using it.

As an example, you may find that your credit card travel insurance coverage includes trip cancellation and interruption coverage worth up to $1,500 per passenger and $6,000 per trip. With premium travel credit cards, however, limits may be as high as $10,000 per covered person and up to $20,000 per covered trip. Insurance policies you purchase separately can come with even higher limits.

However, this kind of coverage only applies for certain eligible reasons that are typically beyond a person’s control. The chart below highlights some of the events that may be covered with either type of protection:

If you’re relying on travel insurance offered through a credit card, you have to pay for travel on a common carrier with your credit card, rewards points or a combination of the two for coverage to apply.

Where to get trip cancellation and interruption insurance

There are two main ways to get trip cancellation and interruption insurance. You can automatically get coverage through a credit card when you use it to pay for all the costs of your trip, or you can purchase travel insurance through a company that offers this coverage.

Either way, read over your policy’s guide to benefits to know which events may or may not be covered by your card’s trip cancellation and interruption coverage. You’ll also want to know about potential exclusions that apply to your coverage, policy limits per person and per trip and other coverage details.

How to file a trip cancellation or interruption claim

The steps required to file a trip cancellation or interruption claim vary, depending on where you get coverage. If you have travel insurance through a credit card, you’ll typically take the following steps:

1. Call the benefits administrator as soon as possible. As soon as you find out a trip needs to be canceled or ended early for a covered reason beyond your control, you’ll want to contact the benefits administrator for your travel insurance plan. If you’re unsure of the number to call, reach out to your card issuer using the number on the back of your card.
2. Fill out a claim form. Your benefits administrator will need you to answer questions about your claim, including the type of loss, what happened, the dates of your trip and more. Your credit card travel insurance will have a claim form you can file online.
3. Submit the claim form and appropriate documentation. In addition to the claim form, your benefits administrator will ask for additional documentation to prove your loss. This may include a copy of your travel itinerary, travel receipts, documentation for the reason of the claim, copies of refund policies of travel providers involved and more.

Is trip cancellation insurance worth it?

Trip cancellation insurance can be worth it for those who travel frequently or are planning a big vacation and don’t want to risk losing money if something takes a turn for the worse. However, only you can decide if this type of protection will be worth it for your travels.

Pros of cancellation insurance

• Trip insurance typically reimburses up to 100 percent of your trip expenses, although coverage details vary by policy, so be sure to review the fine print.
• You can be reimbursed for airline tickets, hotel reservations, tours, excursions and more under these types of policies.

Cons of cancellation insurance

• The cost of travel cancellation insurance can add a substantial fee to a potentially already expensive trip.
• The number of people you insure for your trip and their ages can significantly increase the cost of the insurance premium.

For more peace of mind

Check out the best cards that offer travel insurance coverage.

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The bottom line

Trip cancellation and interruption insurance can help you get some of your money back when your trip is canceled or interrupted for reasons beyond your control. However, you’ll want to read over the policies you’re considering so you know what is and isn’t covered, as well as how much coverage you’ll get per traveler and per trip. Also, note that many top travel credit cards offer this benefit for free, but you’ll have to pay for your trip with your eligible credit card or rewards points for travel insurance benefits to apply.

If you’re a frequent traveler and you’re considering picking up a travel credit card, the type of travel insurance coverage included is one of the main factors you should consider. While premium travel credit cards tend to offer trip cancellation and interruption coverage with higher limits, plenty of cash back credit cards offer this important coverage, too.