Travel insurance cancellation cover explained

Find out what travel insurance cancellation cover includes, when you can claim and how major disruption like a war could affect your travel plans.

What is travel insurance cancellation cover?

Cancellation cover is arguably one of the most valuable aspects of any travel insurance policy. It reimburses you for all or part of the costs if a trip can’t go ahead because of unexpected illness, bereavement or an accident.

However, it won’t pay out in every situation. So, understanding when it does -and doesn’t - is just as important as the cover itself.

Most travel policies contain cancellation cover as standard, although the amount you can claim for and the circumstances in which you can make a claim will vary between providers. For example, some offer additional curtailment cover, which can be claimed if you’ve started your holiday and must cut it short or return home early. There’s also missed departure cover, which provides compensation if you miss your initial flight, ferry or train through no fault of your own. This could be because of a public transport delay or a car breakdown for example.

Cancellation cover is typically designed to protect you before the trip begins and it’s therefore recommended to buy your policy as soon as possible after booking your holiday. Find out more about Over 50s Travel Insurance here.

What does cancellation cover include?

Travel insurance cancellation cover usually applies to “unused and irrecoverable” costs connected to your holiday. In simple terms, that means bookings you have made in advance but cannot be refunded for if your trip has been cancelled.

Depending on the policy, this usually includes:

• Flights, trains and other pre-booked transport, including car hire
• Accommodation such as hotels, apartments, campsites or package holidays
• Pre-paid activities including tours, excursions and event tickets

However, much depends on why the trip has been cancelled. If the airline, hotel or tour operator cancels the booking, then compensation must be sought from them in the first instance before claiming on the travel insurance cancellation cover. In most instances, an excess for each element of the claim will apply, which will be taken from the final claim payment.

Common reasons you can cancel and claim

There are many reasons why a holiday may need to be cancelled and the majority of them are covered in most insurance policies. While each provider will offer different levels of cover, the following are usually considered valid reasons for making a claim:

• You, someone you are travelling with, or a close relative becomes ill or dies
• Someone you are planning to stay with on holiday becomes ill or dies
• You are called to serve on jury duty
• You are made redundant from work, or your leave is cancelled as a member of the armed forces or emergency services
• An emergency occurring at home, such as a fire, flood or burglary
• You or someone you are travelling with has complications with pregnancy and are advised not to travel
• The government – via the Foreign, Commonwealth & Development Office (FCDO) – advises against travel to your destination

The cover is broad, but every claim must be backed up with evidence such as medical and death certificates, employer letters or police reports. In addition, if pre-existing medical conditions weren’t declared at the time of purchase, the policy could be invalidated. And crucially, all events must be “unforeseen.” For example, if you were aware of a redundancy process or jury duty before the policy was purchased, you would usually not be covered.

Does travel insurance cover cancelled flights?

In most cases, if the cancellation was made by the airline itself, the airline is legally required to provide an alternative flight or issue a full refund, so they should be contacted in the first instance. In some cases – and depending on the cause of the cancellation – they may also offer compensation.

However, your policy may still pay out if the cancellation leaves you out of pocket for other costs such as pre-booked accommodation, airport transfers or excursions that cannot be recovered elsewhere.

What cancellation cover usually does not include

While travel insurance cancellation cover provides valuable financial protection, it’s not designed to cover every possible scenario – so it’s just as important to understand what isn’t covered as well as what is.

Each policy is different, but most insurers will provide cover only for unforeseen events and usually won’t respond in the following situations:

• Changing your mind about travelling
• Illness that is linked to a pre-existing medical condition that wasn’t declared when the policy was taken out
• Cancelling due to an issue or event that was known before cover was taken out, such as industrial action affecting transport
• Travelling against official government advice
• Claims where alternative routes to refunds are available from airlines, tour operators or hotels
• Illness or injury caused by alcohol or drug use

In most cases, travel insurance cancellation claims must relate to unexpected events that could not have been anticipated when the policy was purchased. As always, it is important to check the policy wording carefully, so you understand exactly what is and is not covered.

Does travel insurance cover war, and does war impact cancellation cover?

With tensions breaking out across the globe, many travellers are asking: does travel insurance cover war and political unrest? The answer is complicated. This is because many policies either exclude war completely or place restrictions on claims linked to armed conflict, terrorism or civil unrest. Policies will treat all three situations differently, so specific definitions and official guidelines are important.

Timing is also important. If there was already political unrest, conflict or the threat of war at a destination before the holiday was booked or the travel insurance cancellation cover was purchased, insurers may decide the event was foreseeable and therefore not covered under the policy.

Following government guidelines published on the FCDO website will ensure you are up to date on any developing political or social unrest at your destination. If you decide to travel against FCDO advice, your cancellation cover may be affected. So check the policy wording closely to ensure you understand when and in what circumstances a claim can be made.

What happens if war breaks out after you’ve booked your trip?

If war or serious political unrest breaks out after you have booked your holiday, your insurance cover usually depends on when the situation developed and how it affects your ability to travel.

One of the first things insurers will want to understand is at what point the conflict became a “known event”. If your trip was booked and the travel insurance cancellation cover was purchased before the situation on the ground escalated, you may be able to make a claim, particularly if official government advice advises against travel to your planned destination.

The FCDO regularly updates its travel advice. If it advises against travel to your destination and you decide to go ahead with your plans anyway, your ability to claim under your cancellation cover may be affected.

Insurers will also consider whether you are unable to travel or whether you simply no longer want to. For example, if flights are still operating and there is no official advice against travel, cancellation cover may not apply even if there is genuine concern about the situation.

In many cases, airlines, accommodation providers or tour operators may still be responsible for refunds or alternative arrangements before a claim can be made through travel insurance, so they should always be contacted first.

What to check before cancelling your holiday

Before cancelling a holiday, it is important to check exactly what protection your travel insurance policy provides, and to explore all alternative routes to refunds or compensation that may be available.

Start by reviewing the policy wording carefully, paying particular attention to cancellation limits, exclusions and any excess that may apply if you decide to make a claim.

If the trip involves flights, package holidays or pre-booked accommodation, travellers should also contact airlines, tour operators and accommodation providers before cancelling, as refunds, rebooking options or alternative arrangements may be available.

It is also a good idea to gather supporting evidence as early as possible. Insurers will probably ask for documents such as medical certificates, employer letters, proof of disruption or receipts for pre-paid bookings.

Checking the latest FCDO travel advice can also help travellers stay informed of the latest developments at their destination and how that may affect their plans or their travel insurance cancellation cover.

Most importantly, avoid cancelling too quickly without first understanding what protection is available. Speaking with your insurer before making any decisions can help clarify what is covered and reduce the risk of unexpected costs later.

Age UK Trading offers Travel Insurance for Over 50s and Travel Insurance for Medical Conditions provided through AllClear which includes cancellation cover. Get protection for your holiday while supporting older people.