Most travelers understand the basics (if not the details) of trip cancellation but what you may not realize is that you can also interrupt, or abandon, your vacation or business trip and make a travel insurance claim to recover your lost investment.
In the last two decades or so, trip cancellation coverage has gotten a lot of attention from travelers who realize that their pre-paid trip expenses are really an investment and that investment can be protected by travel insurance.
While the airlines may have lead the way in designing non-refundable trip expenses, hotels, rental car agencies, cruise lines, and tour operators have all jumped on the non-refundable bandwagon. These days, even a legitimate and verifiable emergency won’t sway the customer service representatives and travelers often find themselves looking at a significant financial loss if they have to cancel or abandon their trips – vacation and otherwise – to handle that emergency.
So, what’s the difference between trip cancellation vs. trip interruption?
Trip cancellation occurs before your trip and means you can make a claim for up to 100% of your pre-paid, non-refundable trip expenses and be reimbursed for that trip investment
Trip interruption occurs after you’ve started your trip and it means you can make a claim for up to 150% of your pre-paid, non-refundable trip expenses and including the return airfare necessary to get home in a hurry
What’s important for travelers to understand is the fact that your travel insurance plan’s coverage for trip cancellation is closely associated with your coverage for trip interruption. Specifically, the covered reasons you can cancel your trip prior to leaving are the same as the covered reasons you can interrupt your trip after you’ve started it.
A covered reason is the specific situation listed in your travel insurance policy as valid for cancelling or interrupting your trip. If the reason you’re cancelling or interrupting your trip is valid, then you have a valid travel insurance claim.
Trip Cancellation and Interruption Examples
Every travel insurance policy lists the covered reasons for cancellation and interruption in their plan documentation, but here are a few situations to help you understand why you may be forced to cancel your vacation or business trip:
Your wife is injured in a car wreck before your trip and her injuries won’t allow her to travel comfortably
A terrorist attack occurs at your destination city and you decide to cancel your trip and let things calm down
Your car is broken into and your briefcase containing your passport, visa, and travel documents is stolen and there isn’t time to replace them before you leave
Your daughter’s private school extends their final semester another two weeks – right into your family vacation – and her finals are scheduled in that extension
These are all situations that occur before your trip starts, but what about after your trip has begun? Here are a few situations to help you understand why you may be forced to end your trip prematurely and return home:
You get a call in the middle of the night and discover your father has experienced a heart attack and is in critical condition
Your office manager sends you a text to tell you your business partner was in a terrible accident and you’re needed to run the office
The neighbor watching your house sends an email to let you know that your home has been damaged by a tornado
A hurricane is headed straight for your vacation rental and local law enforcement stops by to tell you to evacuate – now
Of course, these are just examples of situations that travelers have experienced and claims that travel insurance companies have paid.
Shopping for the Right Cancellation and Interruption Coverage
When shopping for a travel insurance policy that fits your needs, it’s important to look at the covered reasons for cancellation/interruption and determine whether the conditions particular to your life are covered in that policy.
If you have aging parents or children that you’re leaving behind, will you be able to cancel your trip or end it and return home if they need you?
If your trip is scheduled during hurricane season, will you be able to cancel your trip or end it if a hurricane starts to form?
If you’re closely involved with the everyday goings-on of your business and/or need to back up your business partner, can you cancel or leave your trip for a business-related emergency?
If your job has been a little shaky lately, will you be able to cancel your trip and find a new job if you lose this one?
Every traveler’s needs and responsibilities are different, so it’s important to think carefully about what could happen and buy a travel insurance plan that will have enough coverage for those possible situations.
When Trip Interruption is Separate from Cancellation
Travel insurance companies were quick to recognize that even though a traveler may not want trip cancellation coverage, they may need trip interruption coverage in their annual and travel medical plans.
You can read more about annual travel insurance here
You can read more about travel medical insurance here
Most annual and emergency medical insurance plans don’t include trip cancellation, but if a traveler starts their trip and has to return home for an emergency, they’ll have some coverage to help them cover the costs of return airfare that is often at last-minute prices.
Annual and travel medical plans limit their trip interruption coverage to a per-trip or annual maximum (sometimes to just $1,000), so it’s important for the traveler to check those limits and be sure that they’ll have enough to pay for those emergencies.
If you have questions about trip cancellation vs. interruption what weren’t explained here, please send your question to us for an answer.