Travel Insurance Cancellation Cover
Why does travel insurance matter?
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One of the most common reasons people make a claim on their travel insurance policy is when they have to cancel their trip because something unexpected has happened between making a booking and the date of travel. There are a number of different reasons why people need to cancel holiday plans, some of which are covered by our travel insurance policies. Where cover is available, the policy will provide compensation for financial loss.
If you are going on an expensive trip, it is important to make sure that the cancellation cover limit is enough to cover the full cost of your trip.
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Did you know?
£1,488 (3) – Average cost of a one-week holiday for a family of four of travel and accommodation. (4)
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What does travel insurance cancellation cover do?
All providers offer standard cover insuring against accident, illness and abandonment following a delay. A cancelled trip is typically compensated if you:
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• fall ill or have an accident;
• are made redundant;
• are called up on jury service;
• are quarantined because of sickness; or
• experience a long delay to the planned departure and your trip has to be abandoned.
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Did you know?
£3,000 to 5,000 – Typical level of cover for cancellation claims, less a £50-75 excess.
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Examples of those situations in which holiday insurance policies typically do not provide additional cover include:
• If the accident and illness of you, a family member or travelling companion in circumstances could be ‘foreseen’. For instance, you are unlikely to be covered if you were sick when booking the trip or the claim is related to an existing medical condition of a ‘non travelling close relative’ that was not declared and accepted by the insurer.
• If self-employed, you are unlikely to qualify for cover in the event of redundancy.
• If the trip has to be abandoned, delays caused by air traffic control failure or computer failures are usually excluded.
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Compensation might be paid if a close relative or travelling companion falls ill or has an accident, but you should check with your insurer before cancelling the trip. Some policies might provide additional cover in other circumstances outlined below.
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Did you know?
246,000 – Number of people helped with claims for the cost of cancelling a holiday in 2009. (5)
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What insurance does not normally cover
1 Government advice
This occurs where the Foreign & Commonwealth Office (FCO) or the government of the country you are going to visit have advised against travel to that destination. You should look to recoup the costs from the direct source for instance, a travel agent, tour operator or airline will often arrange a different date or destination, or give a full refund.
Most policies do not provide cover unless certain parts of the trip were booked independently and cannot be changed or refunded. You can find more information about cover for terrorist incidents and independent travellers in the relevant sections of this guide.
2 Airline failure
If you have booked your own flights with a scheduled airline that goes bust, you might not be able to recoup the money. Scheduled airline failure cover will pay out compensation, but most policies do not include this feature.
Chartered airlines or those operated through tour operator are covered separately by a different compensation scheme – Air Travel Organisers’ Licensing (ATOL). You can find more information about chartered airline and tour operator failure in general on the ATOL website.
3 Taxes fees and charges
Airport taxes and Air Passenger Duty (APD) taxes are only payable by the airline if you actually travel and these amounts should be refunded if you have to cancel. As these costs can be claimed back from the airline, many policies do not cover them.
4 Invalid passports and visas
Most policies do not provide cover if you cannot travel because you did not arrange for a valid passport and/or any necessary visas before the trip.
5 Timeshares, property bonds and reward schemes
Some policies do not provide cancellation cover for timeshares, holiday property bonds or trips booked using airline mileage or similar reward schemes. If you are booking a holiday in this way you should check that you are covered.
(3) Source: Churchill Insurance. Based on £372 expenditure on travel and accommodation per person per week.
(4) Britain’s Holiday Spending Revealed. Confused.com, August 2010.
http://www.confused.com/news/travel/travel-insurance/britons-holiday-spending-revealed-1787641000 [Accessed: 06/10/10]
(5) ABI claims data.
Important - This is page is used as a guide only, please refer to the terms and conditions supplied with the policy you purchased.
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