Travel insurance cancellation cover

Travel insurance cancellation cover can help if the unexpected happens and you can't make your trip and should be considered when you book a holiday.

Key points

  • Not all travel insurance policies include cancellation cover - check yours, and check the level of cover and excess
  • Book your insurance when you book your trip to benefit
  • If you have an annual policy, take care with the cover start date
  • You can't insure yourself against an event taking place that you were already aware of

Travel cancellation cover might not make up for the disappointment of a missed holiday, but at least it'll help ease the dent in your pocket if things go wrong.

Having this protection allows policyholders to reclaim the costs of their trip up to the cover limit - minus any excess - if unforeseen circumstances prevent them from travelling.

Remember to make sure that your travel insurance policy has the appropriate level of cancellation cover.

On 21 April, 2015, Gocompare.com analysed 581 single trip travel insurance policies listed on the matrix of independent financial researcher Defaqto and found that cover and excess levels varied widely.

While 97% of the policies offered some level of cover for cancellation or curtailment of a trip as a standard feature, the cover level went from £500 to unlimited, and the excess payable ranged from £15 to £250.A tourist wheeling a suitcase

A quarter of the policies studied were able to offer a discount if cancellation and currtailment cover was excluded, but you should think carefully before removing such an important part of your policy.

When should I arrange cancellation cover?

Common reasons for buying travel cover include the possibility of medical emergencies whilst you are away and losing luggage either on your way there or back.

But often overlooked is the fact that insurance can be needed months before you even start to pack your suitcase.

Many travellers miss out on cancellation cover because they leave buying their insurance until the last minute and are therefore unable to claim if something unexpected happens.

It's a much better idea to take out travel cover soon after you book your holiday than leaving it until just before you go

Buying single trip travel insurance means that your cover starts straight away, not on the first day you go.

If you prefer an annual or multi-trip policy, you need to remember that your cover only starts on the day that you request - if that's not until the first day of your holiday, you won't get the benefits of cancellation cover before that.

Gocompare.com suggests that anyone planning a trip should think about arranging their cover sooner rather than later, because leaving it to the last minute might mean losing valuable protection.

"Cancellation cover is an important and often overlooked benefit of travel insurance," said insurance expert Jeremy Cryer.

"It helps hundreds of thousands of consumers reclaim cancelled holiday costs every year.

"However, in order to benefit from this protection - especially if you don't have an annual or multi-trip policy already in force - you should buy your cover sooner rather than later."How to cut the cost of holidays

When can I claim?

Reasons to cancel your holiday might include:

  • You or a family member becoming ill
  • Being called up for jury service
  • Undergoing a bereavement or needing to attend a funeral
  • A natural disaster
  • A flood or fire at your home
  • Being involved in an accident

It's likely that your insurance provider will need to see proof to back up your claim, such as medical records or an official letter.

What exclusions are there?

Claims might not be met if you were under the influence of drink or drugs at the time of the incident you're claiming for.

Remember also that you can't take out a policy after an event has already happened and then make a claim.

"It's important to remember that you cannot insure yourself against an event taking place that you were already aware of," said Cryer.

"If a family member becomes seriously ill in the run-up to your holiday, you can't then take out insurance with the intention of cancelling your trip.

"Likewise you cannot take out a policy after hearing about potential serious disruption to your travel plans - such as that caused by striking airline staff or a natural disaster - and expect to be able to claim for deciding to abandon your holiday.

"Your insurer will check when you were first aware of the potential disruption to your holiday before deciding whether your claim is genuine.

"It's therefore a much better idea to take out your travel cover soon after you book your holiday than leaving it until just before you go."

By Rebecca Lees