While browsing different travel insurance policies, you might come across terms like “Trip Cancellation benefit” and “Trip Interruption benefit.”
Do you know how a Trip Cancellation benefit works? How about a Trip Interruption benefit? Is there a difference? Yes!
This blog will break down the similarities and differences between these two benefits and explain why you should consider a travel insurance plan that includes both.
What Is Travel Insurance?
Travel insurance, sometimes referred to as trip cancellation insurance, is temporary insurance that covers you during a domestic or international trip. The main benefit of travel insurance is the Trip Cancellation benefit, which provides coverage for trips canceled for a covered reason.
You might get sick before your booked trip to Aruba, or a hurricane could land at your beach destination. A travel insurance plan could provide coverage for the nonrefundable expenses you’ve paid for activities and transportation you’ll miss out on due to canceling a trip, like tickets for a scuba diving adventure or nonrefundable airline tickets.
Many travel insurance plans provide additional benefits like Medical Evacuation, Baggage Damage or Loss, and Trip Interruption. Let’s break down the differences between a Trip Cancellation benefit and a Trip Interruption benefit.
Trip Cancellation vs Trip Interruption
A Trip Cancellation benefit can provide coverage for nonrefundable, prepaid trip expenses after canceling a trip for a covered reason. A Trip Cancellation benefit applies specifically to a trip that is canceled before you depart.
This may mean an emergency has taken place prior to your departure which leads you to cancel the trip, like a hurricane striking your destination or a sudden illness.
Review the following examples to see what may and may not be covered by your Trip Cancellation benefit.
What Is Typically Covered?
These are just a few scenarios frequently covered by a Trip Cancellation benefit. Review the policy documents for any plan you’re considering to see a full list of covered reasons for cancellation.
- You cancel your trip when you are diagnosed with a medical condition before leaving and your doctor advises you not to travel. You shouldn’t have to worry about losing all your money on a trip that you can no longer take. A Trip Cancellation benefit could mean you are covered for prepaid, nonrefundable trip expenses if you cancel for a covered reason like a serious illness.
- An immediate family member passes away before you are set to travel, so you cancel your vacation. The last thing you need to worry about after an unexpected death in the family is losing hundreds or even thousands of dollars on a prepaid trip. That’s why most travel insurance plans include death of a loved one (parent, grandparent, sibling, child, etc.) as a covered reason for trip cancellation. Be sure to review your policy documents to see who qualifies as an immediate family member.
- Your booked accommodations are destroyed by a hurricane named after your coverage is in effect, and you cancel your trip. You checked the weather for your destination when you booked your trip, and it all looked good to go then. Now just a week before you’re set to depart, a new hurricane is named and makes landfall at your destination, destroying your hotel and the city around it. Your Trip Cancellation benefit can come into play and help cover prepaid expenses for a trip you can no longer take.
What Isn’t Typically Covered?
Below are several scenarios that are frequently excluded from cancellation coverage. It’s important to understand that your reason for canceling a trip must be listed as a covered reason in your policy documents.
- You purchase travel insurance after a hurricane has been named and predicted to impact the location. Make sure to check the National Hurricane Center for potential hurricanes, especially if they are frequent at your destination. Your Trip cancellation benefit will probably not cover your trip cancellation if you purchase your policy after a hurricane has been named.
Learn more about traveling during the hurricane season and how to keep yourself and your travel companions safe.
- You cancel your trip and then purchase a travel insurance policy. Add “purchase travel insurance” to your trip planning to-do list. You won’t be covered for lost expenses if you purchase a policy after you cancel your trip.
- You decide to cancel your trip because of cold feet. It’s understandable to get nervous about travel, especially if you don’t do it frequently. However, your Trip Cancellation benefit can only provide coverage for covered reasons listed in your policy documents. Make sure to read those covered reasons carefully before purchasing.
What Is a Cancel for Any Reason Benefit?
Some travel insurance plans provide an option to upgrade your benefits. One potential upgrade is the Cancel for Any Reason (CFAR) benefit. But what does this mean?
Your Trip Cancellation benefit will already cover you if you cancel your trip due to a covered reason listed in your policy documents. But what if you need to cancel for other reasons?
A CFAR benefit will provide reimbursement (sometimes up to 75%) of the unused, nonrefundable, prepaid payments or deposits you made for your trip. And this is if you cancel your trip for any reason!
Just make sure you read your plan’s policy documents and ensure you are following the correct procedures. For example, you may be required to cancel within a certain number of days prior to your trip to be eligible for CFAR coverage. The Atlas Journey travel insurance plan CFAR upgrade will reimburse you up to 75% for a cancelled trip, but you must cancel at least 48 hours before your departure.
See your plan’s policy documents for more information about the CFAR optional upgrade.
While a Trip Cancellation benefit can cover the cost of a trip canceled before it has begun, a Trip Interruption benefit may be used once the trip has already started. If you end your trip early for a covered reason, the Trip Interruption benefit can cover your unused and nonrefundable trip expenses.
What Is Typically Covered?
Here are a few scenarios that are typically covered by a Trip Interruption benefit. You can find a full list of covered reasons for interruption in the policy documents for the plan you’re considering.
- You end your trip early when you become ill or injured and your doctor advises you to go home. Maybe you get a serious case of food poisoning or break your ankle while hiking on vacation, and your doctor advises you to end your trip and return home. Your Trip Interruption benefit can provide coverage for your prepaid, nonrefundable expenses for the rest of your trip that you are unable to use.
- Your host has a medical emergency during your trip, so you end your vacation early. You may decide to stay with a family member, friend, or host during your trip. If they experience a medical emergency resulting in their hospitalization or death and you have to end your trip early, you could be reimbursed for your unused expenses.
- There is a mandatory evacuation of your destination because of a natural disaster while you are on vacation, and you must cancel the rest of your trip. In some extreme cases, your travel destination may require an evacuation because of a natural disaster like a hurricane. Your unused trip expenses may be covered when you are forced to end your trip early.
What Isn’t Typically Covered?
There are many scenarios that are typically excluded from interruption coverage. A couple examples are listed below. Note that your reason for ending a trip early must be listed as a covered reason for interruption in your policy documents.
- You end your trip early because of homesickness. During your trip abroad you experience homesickness and decide to head home early. You likely will not be covered for unused trip expenses, as homesickness is not typically a covered reason for interruption.
- You aren’t 100% satisfied with your accommodations when you arrive, so you book reservations for somewhere else. You thought you got a good deal on your hotel, but it doesn’t turn out like you thought. You decide to cancel and book a different hotel. This is usually not a covered reason for trip interruption. (You may consider upgrading to add a Rental Accommodations Protection benefit.)
PRO TIP: Remember that every travel insurance plan has its own benefits, limits, conditions, and exclusions. Don’t assume all plans are the same. Review the policy documents for any plan you’re considering and make sure you understand what is and isn’t covered.
Won’t Travel Companies Give Me A Refund?
They might, or they might not. Every hotel, airline, tour company, and amusement park has a different cancellation policy.
Even if your travel provider offers some cancellation flexibility, there’s a chance you may not receive a refund if you cancel too late. For example, canceling a flight the night before could mean you don’t get a refund for your ticket. U.S. airlines are not required to issue refunds to travelers who cancel their trip.
Also, many amusement parks and tours exclusively offer nonrefundable tickets for their experiences.
You may purchase your flight tickets, make hotel reservations, or book a rental car through a third-party travel vendor like Expedia, Kayak, or Hotwire. These vendors can make it easier to book and could feature cheaper prices.
However, these third-party vendors may only allow refunded cancellations within 24 hours of purchase or before a certain deadline. Missing deadlines or purchasing nonrefundable tickets could mean you won’t receive a refund for your trip purchase without a travel insurance plan.
How Can I Get Coverage?
You can get coverage for trip cancellation and trip interruption with a travel insurance plan like Atlas Journey. Atlas Journey is a comprehensive and customizable travel insurance plan offering three different coverage options: Premier, Preferred, and Economy.
Trip Cancellation and Trip Interruption Benefits
Atlas Journey features a Trip Cancellation benefit that covers up to 100% of trip costs. Atlas Journey Premier and Atlas Journey Preferred can cover trips of up to $150,000 and Atlas Journey Economy can cover trips of up to $10,000.
The Trip Interruption benefit covers up to 150% of trip costs for Premier and Preferred and up to 100% of trip costs with Economy.
Atlas Journey provides additional benefits including:
- Travel Delay (5 hours or more)
- Missed Connection
- Change Fee Cancellation
- Inconvenience Benefit
- Loyalty/Frequent Flier Miles
- Emergency Accident & Sickness Medical Expense
- Dental Expense
- Medical Evacuation & Repatriation of Remains
- Baggage Damage or Loss
- Accidental Death & Dismemberment
Atlas Journey also offers a waiver of the pre-existing condition exclusion if you purchase your plan within 21 days of your initial trip payment date. Otherwise, a 90-day lookback period will apply to pre-existing conditions. Click the “Insurance Exclusions” tab of the Atlas Journey page to see what qualifies as a pre-existing condition.
Click the “Policy Documents” tab on the Atlas Journey page for more information on benefits, conditions, and exclusions.
Additional Coverage Upgrades in Atlas Journey
You can even upgrade your coverage for an additional cost for benefits like:
- Cancel for Any Reason – reimbursement for a portion of your nonrefundable, prepaid expenses if you cancel for a noncovered reason
- Adventure Sports – coverage for participation in contact sports, extreme sports, organized sports, and any race or speed contests
- Rental Accommodations Protection – coverage added to your Trip Interruption benefit if your rental is filthy or unsanitary, not as advertised, or your keys are lost or stolen, preventing you from accessing your rental for 12 hours or more
Click the “Policy Documents” tab of the Atlas Journey product page to review policy documents for the plan that interests you. Review the full list of optional upgrades to determine whether you want to upgrade your coverage for your trip. Optional upgrade availability varies by plan and state of residency.
Travel Assistance Services
You may need additional assistance before departing for your trip or while traveling. Atlas Journey plans include travel assistance services to assist you with referrals, language interpretation, lost or stolen luggage, concierge services, and more.