Trip cancellation insurance is valuable when a trip is cancelled in situations like death, injury or illness. This insurance is also operational in the case of unpredicted events like being summoned to court for a legal problem, your house being burnt down, you not being able to make it to the airport due to unforeseen circumstances or employees of a transport provider are on strike.
Trip and risks
In general, charters and package tours mean large sums of money deposited before departure. If you cancel your trip approximately one month before leaving, you can get your entire sum of money back. You must have the original ticket/s of your trip in order to get your money back in the case of a cancellation. It is usually risky to pay in advance as you cannot foresee unfavorable events and hence may end up losing money.
Your money will be refunded in the following cases:
- Death, Illness, or Injury: In this case, the traveler is insured along with one or more people who are traveling with him or her. If a family member at home dies or is ill or injured and you must interrupt your trip, you can avail refund. The company usually does not provide a refund (even) if your travel is canceled in the case of an already-existing health condition at the time of purchase.
- Home Problems: A lot of insurance companies provide refunds on the basis of unforeseeable events which cannot be avoided and cause a trip interruption or cancellation. For example, your house has been rendered inhabitable due to a natural calamity like an earthquake or a flood.
- Operator Failure: Trip cancellation insurance will return you the travel tickets or the hotel vouchers previously paid, if the supplier or tour operator or travel agency has an operation problem. The insurance related to operator failure covers you on the basis of these contingencies, but not entirely. There are a lot of strategies which state that they will protect you in case of default or failure, and a few which cover you on the basis of bankruptcy. A lot of companies do not take into account failure of the firm who sold the travel service. Therefore, if you purchase the insurance from a travel agency, you won't get your money back if the agency dissolves. But if an airline, charter operator, or tour operator fails, you will be covered.
- Destination Problems: Trip cancellation insurance may protect you on the basis of a considerable list of unpredicted events at your destination, or in an area that your aircraft flies/will fly through. Some examples are: hijack situations, floods, fire, earthquake, quarantine because of a contagious illness, etc. A strike by employees at your destination port may also qualify for you getting reimbursed.
As you can see, trip cancellation insurance can come quite handy when you're planning to travel. So, make sure you pick the best policy.