YOU ASK:

What does trip cancellation insurance cover?

WE ANSWER:

Trip cancellation provides you with protection in case you have to cancel or cut your trip short and consequently forfeit your non-refundable plane fare, cruise trip fare, as well as hotel deposits. You can claim for the unused and non-refundable portions of your trip.

This travel insurance benefit is quite useful when you have already made a down payment or fully paid for a trip. If you are planning to go on a cruise or are booking a flight halfway across the world, your payments may reach to the thousands. Imagine your dismay if you had to call off your trip because of an emergency, particularly if your tickets are non-refundable!

Depending on the type of trip cancellation insurance you have, you can expect to have coverage when you cancel because you get sick right before you are supposed to leave for your trip, there is an airline strike, you miss your connecting flight, a natural disaster such as a hurricane, storm or earthquake that occurred in the city where you live, or if there is a hijacking incident.

As with all the other benefits provided in the trip insurance policy, it is best to take a look at the exact provisions and terms outlines. You should do this to ensure that you are protected for important (and highly probable) risks.

Look at how terms are described and confirm with the insurance company the parts you don't understand. There may be vague terms like "traveling companion", "unforeseen event" or "close family member". Pre-existing health conditions are also commonly excluded from the cover.

Trip cancellation insurance usually requires that you buy it immediately after you have booked your tickets or within two weeks after you have made a first payment on a trip (such as a cruise holiday). Be sure to also check that your policy covers your entire trip. After the policy cover has expired, they will not pay you for that part of the trip that was cancelled.

You can also opt to have "cancel for any reason" cover, which will refund you for any reason, unless it's specifically excluded in the policy.

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