Interruption and Cancellation Insurance

tripsense-travel-insurance-Interruption-and-Cancellation-Insurance
I don’t intend to cancel
Credit Cards
Last Minute Travel – Zero Prior
Change of Mind / Cancel for Any Reason
Supplier Cancellation Waivers
Trip Interruption
Covered Risks

“I don’t intend to cancel, so I don’t need Trip Cancellation Insurance.”

No one intends to cancel when they book a vacation.  When people say this, they really mean, “under current circumstances, I see no reason why I would cancel” and this is exactly what cancellation insurance is about.  Cancellation insurance covers unexpected risks that will result in the loss of all of the non-refundable payments for your trip.

We routinely see customers declining insurance and then needing to cancel unexpectedly.  Even though we have advised our customers of the non-refundable nature of their payments, some defy reality and insist that we press their case with our supplier to waive cancellation or change penalties.  Our suppliers’ non-refundable provisions and terms and conditions for changes are set in stone in contracts that we cannot modify.  Large travel suppliers have hundreds of calls per week with customers requesting that penalties are waived because of their “special circumstances.” This falls on deaf ears and cancellation penalties are not waived.

It’s such a serious issue that the Ontario Government requires travel agents to offer both medical and cancellation insurance at the time of booking, and it is required that we record whether the insurance is purchased or declined on our invoices.  Please understand that if you decline cancellation insurance, we cannot “make your case” with the supplier – it is a waste of time.  If you are ready to take the risk that you write off the entire cost of your trip, this is a risk calculation that only you can make.

If you do not foresee any reason to cancel, you can save a bit by not taking the Concierge Club Plan which has a higher and costlier change of mind benefit.

You can also purchase concierge club ZERO PRIOR insurance which covers all other risks but the cancellation if you are willing to take that risk.  And, if you have good group plan coverage for emergency hospital medical you can purchase non-medical zero prior – which then only covers trip interruption, baggage delay and loss, etc.

If you think it is still too expensive, then read our blog post on the benefits of spending on travel insurance.

Many people say “I don’t intend to cancel” – of course!  If someone intended to cancel, they probably wouldn’t make travel arrangements in the first place.  Before we get into what is covered and what is not, let’s just quickly explain why you need cancellation coverage in the first place.

Why is Travel Non Refundable?

When you make travel arrangements, you are holding space that the airline, hotel, and other travel suppliers are prevented from selling.  Also, the price of travel is highly competitive and subject to the market fluctuations of supply and demand.  Just like the stock market, travel prices bounce up and down like a yo-yo.  If travel was refundable, people would cancel and demand a refund when the price goes down.  Yet, they would expect to hold their reservations if the price went up.  If reservations could be cancelled at any time, travel suppliers would have no idea how many people were showing up for their flight or checking into their hotels, resulting in empty seats and rooms.

In order to offer lower prices and fill unsold airline seats and hotel rooms, travel suppliers started offering lower prices for non-refundable reservations.  So the non-refundable terms and conditions became the norm for leisure travel arrangements typically planned in advance.

Can’t I just send someone in my place if I have to cancel?

Another thing people think is that if they can’t go, they’ll just send someone else in their place.  In other words, if I get sick, my sister can go, etc. It doesn’t quite work like that.  Travel suppliers have very specific rules about name changes basically to avoid speculation of advance sales.  You know how ticket scalpers buy up tickets in advance and sell later for a premium, or sometimes dump below face value at the very last minute?  This would be the case if name changes were allowed.  Speculators would buy blocks of space for resale and compromise the travel supplier’s pricing strategy.  It’s for this reason, that it’s not typically allowed. Supplier conditions vary, but most treat material name changes (as opposed to correcting a misspelling) as a cancellation.

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Credit Cards

Few credit cards offer adequate cancellation insurance with their annual fee.  In the unlikely case that your card covers cancellation insurance, you need to find out if it covers all of your travelling party or just you. If you want to compare your credit card and see its coverage, visit the Insure Eye Credit Card Comparison Tool. There will be limits to their coverage, and you may need to “top up” your cancellation coverage.  We can do that for you, charging you only for the additional limit of coverage.

Then there’s the fine print.  We know our cancellation coverage offers the best coverage on the market, but the covered risks and exclusions are in all insurance policies.  The only way you will really know what’s covered and what’s not is to get hold of the fine print and read it.

Last Minute Travel – Zero Prior

Premiums for cancellation insurance are not adjusted for short or last minute advance booking periods, so the premium is the same whether you book six months in advance, or at the very last minute.  The probability that a covered risk would “pop up” at the very last minute is less than when you have months in advance.  While medical reasons for yourself and your immediate family can appear at any time, it’s unlikely, for example, that you will be subpoenaed to court at the last minute!  If you involuntarily lose your job just before a last minute trip, you’ll probably still want to go, versus losing it before or after making a big final payment on an exotic vacation.

Some people are game to risk it at the last minute.  Cancellation coverage is the more expensive component of the package insurance, and you can purchase ZERO PRIOR coverage – which essentially gives you ALL THE REMAINING COVERAGE (emergency hospital medical, trip interruption, baggage, etc) without the cancellation prior, a good alternative for last minute bookers.

Of course, when you buy zero prior coverage, if you do have to cancel before you go, there will be no refund for the trip cost itself.

tripsense-travel-insurance-change-of-mind

Change of Mind / Cancel for Any Reason

Many people assume cancellation insurance is in fact, “change of mind”, but it is not. Our concierge club plan offers the best change of mind coverage on the market.

This will cover any reason – even ridiculous reasons – that you may want to cancel your trip and make a claim against the non-refundable penalties associated with cancellation.

Common “Change of Mind” reasons you may not want to take your trip:

  • I don’t feel like it
  • Depression or mental illness not covered by cancellation insurance
  • Stress at work; pressing issues at work
  • Babysitting plans fall through
  • Family problems making it inconvenient or inappropriate to travel
  • Relationship issues with travelling companions or otherwise
  • Sickness of a child, but not serious enough to limit travel – but don’t feel like going
  • Unexpected changes in financial position or surprise costs
  • Failure of a course, summer school, retake, etc.
  • Family member has a pre-existing condition that is not covered
  • Uncertainty with yourself or a family member or friend

There are lots of times where you have a desire to travel and things generally look okay, but especially if there is any uncertainty in the air that could crop up, you should consider the extra cost of having the full change of mind coverage.  Different than supplier waiver plans, this gives you actual cash back.  Our concierge plan allows you to cancel for any reason up to 7 days prior to departure and get 75% of the non-refundable amount back.  From 6 days to 48 hrs prior you are eligible for 75% but to a maximum of $500 per person.  There is no coverage if you cancel within 48 hours of departure.

Supplier Cancellation Waivers

Some of our suppliers offer their own cancellation waivers that you can only purchase at the time of booking.  To be clear, they will not allow you to purchase it even a day after booking.

Option Flex is offered for example by Transat Holidays, Tours Mont Royal, and Nolitours.  It can be purchased for $49 per person at the time of booking and allows you to change your departure day up to three hours prior to departure (changing the date may result in an increase in fare however due to differences in pricing, and if a lower price applies, no refund is given).  They also allow the transfer of the trip to “a family member” (not just anyone to prevent speculators/scalpers from reselling trips at a profit) up to 7 days prior to departure.  If you cancel (up to 3 hours prior) there is a schedule of the ratio of cash and future travel credit that applies.  For example, if you cancel within 21 days of departure and up to 3 hrs, all of the eligible credit will be future travel credit for rebooking a new trip.  Taxes and tourist card costs are not refunded or eligible for future travel credit.  You must travel within 12 months of the original departure date or the credits will expire with no refund.

Sunwing also offers a Worry Free Cancellation Waiver with similar conditions, and many tour companies and cruise lines offer similar waivers.

It’s important to know that these plans are not insurance.  They are fees collected by the supplier in exchange for limited relaxation of the suppliers’ own cancellation and change fee conditions (dates and names).

They can be purchased in addition to insurance especially when there are pre-existing conditions or additional uncertainties that insurance will not cover.  However, these plans do not cover additional risks beyond the suppliers own terms and conditions and therefore mostly apply to cancellation provisions.

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Trip Interruption Insurance

Unlike cancellation insurance, this kicks in once travel has commenced.  Unexpected things can happen with family members back home when you are on vacation causing you to need to fly home in a hurry.  Once again, pre-existing conditions exclusions will apply.

Typically the claim is for one way tickets home which can be very pricey at the last minute. Along with this can come related accommodation expenses, telephone/internet charges, taxi fares, meals, etc.

Essentially all of the same risks that are covered for cancellation prior to your trip under cancellation insurance are covered during your trip under trip interruption insurance.  The big difference with trip interruption insurance is that additional expenses over and above the cost of the trip are incurred  when you are on the trip, and need to return home.

A bit morbid, but trip interruption insurance covers the cost of returning your remains should you die on vacation.  This can be an expensive and cumbersome proposition to leave to your family.

Covered Risks – Cancellation Insurance & Trip Interruption

The covered UNFORSEEN EVENTS are listed in the Transat Travel Insurance Policy Booklet and change from time to time.  They are summarized here, but the policy booklet is the definitive description of the benefit and exclusions.

  • Unexpected serious illness or death of you, your travelling companion, immediate family members (parents, grandparents, legal guardians, siblings, spouse, children, step-parents, step-siblings, step-grandparents, step-children, aunt, uncle, niece, nephew, close business associate, employed caregiver of a dependent child) of yours, or the immediate family members (same definition) of your travelling companion.
  • Weather conditions, earthquakes, volcanic eruptions causing the scheduled carrier to cancel or delay by at least 30% of the planned duration of your trip
  • Government written warning recommending against visiting a destination included on your trip
  • Unexpected loss of permanent employment (excluding contract or self-employment) due to layoff or dismissal without just cause.
  • Subpoena to jury duty, witness, defendant in a civil suit, for you, your spouse, child, travelling companions
  • Non issuance of a travel visa or passport beyond your control provided it was not due to late issuance
  • Injections suddenly required which were not required at the time of booking. Manufacturers’ shortage of required immunizations from a travel clinic.
  • Complications during the first 31 weeks of Pregnancy for you, your spouse, or your travelling companion or spouse’s pregnancy
  • Early unexpected birth of your immediate family member not travelling with you on an insured trip
  • Pregnancy diagnosed after booking a trip that will result in travel in the last 9 weeks of pregnancy
  • You, your spouse, your travelling companions’ employer transfers unexpectedly resulting in a change of principal residence.
  • You, your spouse, your travelling companions, called to emergency service by Police, Fire, Armed Forces, or essential medical personnel
  • Cancellation of a business meeting or conference for which you or your employer has no control
  • A change in date of an examination by a professional body, college, or university from an originally published date.
  • A disaster to your (or travelling companions) principal residence or place of business making it uninhabitable
  • Admission to hospital or death of a person you have arranged overnight accommodation for the majority of your trip. A disaster to the residence of the home you are staying at for the majority of your trip.