Should You Buy Trip Cancellation Insurance?

Trip cancellation insurance is intended to prevent you from losing your hard earned money if you have to cancel a trip or interrupt it somewhere along the way.

Trip cancellation insurance can either be a great asset or a huge waste of money. It is intended to prevent you from losing your hard earned money if you have to cancel a trip or interrupt it somewhere along the way. One thing that you must be clear on is that this insurance only covers you if you have a major unforeseen event that prevents you from traveling. Most policies state that you can receive benefits if you have a sudden illness, injury, or death, either yours or a family member's. Some policies also cover you if you have a major unpreventable event. These can include, but are not limited to: being chosen for jury duty, having car trouble that makes you miss your flight, or experiencing a catastrophic loss due to fire or natural disaster. All policies are very clear that they will not reimburse any losses just because you changed your mind about traveling.

Trip cancellation insurance will reimburse you for any travel expenses that you have paid for and cannot obtain a refund for. Examples of these types of expenses are airline ticket, cruise deposits and hotel deposits. Make sure you look carefully at how much you would be liable for before you purchase this insurance. If your airline tickets can be changed for travel another date and you are only looking at losing a small deposit to a hotel, you may not want to purchase this insurance.

Read the fine print on your policy carefully. Many have exclusions that state that they will not reimburse you if you have to cancel your travel because of an illness that you have been treated for by a physician in the last 1 to 6 months. Look for policies with the broadest terms. Be sure you are clear how each term is defined. Their definition of "unforeseen" and yours may be very different. Also check that the policy will cover you for the entire trip, not just a portion of it.

Some other important clauses that are in some policies and not other are coverage for operator failure and destination problems. If your policy covers you for operator failure, you will be covered if the travel agency, airline, hotel, resort or other travel partner you are relying on closes their doors. Make sure that the fine print does not limit this coverage to the provider declaring bankruptcy. Many businesses close their doors without ever declaring bankruptcy. Also be aware that if you buy your trip cancellation insurance from your travel agent it will not cover you in the event that that agency closes its doors.

Destination problems can quickly ruin a vacation. From natural disasters to terrorism, many problems can arise once you have reached your intended destination. Be clear what your policy will cover. If the policy is good it will allow you to return home earlier than your scheduled date and will completely pick up the cost.

Before you purchase trip cancellation insurance, make sure you are not double insuring your trip. If you are paying by credit card, you may already have coverage automatically provided to you. These policies run about $6 for every $100 worth of coverage. Make sure you only buy enough coverage to protect you against the losses you would actually incur if the trip was cancelled. If you will not lose your whole investment, do not insure the whole cost

If you decide that the insurance will offer you protection that you need, buy it as soon as you book your trip. If you wait, you may have an unexpected event that will not be covered. There are no financial benefits for waiting to make your insurance purchase.

Research where to buy your policy carefully. Shop around, look on the Internet, ask friends and get recommendations from several different travel agents. Trip cancellation insurance can be wonderful protection and give peace of mind when you follow these suggestions carefully

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