Why is Travel Cancellation Insurance So Important?

We all know that regular Travelers Insurance is Important to have before arriving in a foreign country. But what about travel cancellation? Generally, travelers who have booked a pre-organized tour to a foreign country or cruise are usually more interested in Travel Cancellation Insurance. Why? Because they usually have a lot of money invested in a trip, and if for some reason the trip needs to be canceled, then the traveler would not lose all of their money (assuming insurance was purchased).

So, Why is Travel Cancellation Insurance So Important?

Travel Cancellation Insurance is important to have, especially when someone has an expensive trip planned in advance. In the case of a sudden emergency at home which causes a person to cancel their trip, unfortunately, they would lose the majority (if not all) of their investment. Travel Cancellation Insurance is an extra level of financial protection against financial losses due to potential emergencies.

Travel Cancellation Insurance is Important because you could lose a lot of money without it.
On a flight to my first Solo Trip

Travel Cancellation Insurance is All About Saving Time & Money

Save Money with Trip Cancellation Insurance

There’s nothing quite like investing $20,000 into a trip with you and your family, and then watching it all go down the drain when there has been a sudden death in the family. There are many travel companies and hotel chains that simply do not offer a refund after you make a booking.

Profits are often the first thing, and only thing, on their mind. They don’t care about your situation or your predicament. Once they receive your money, then it is theirs forever. It doesn’t matter if you show up for the vacation or not. Purchasing Travel Cancellation Insurance is a smart way to protect yourself against unforeseen future events. Many people think “it won’t happen to me”, until it does…but then it’s too late.

Save Time with Trip Cancellation Insurance

Remember, time is money & money is time. How many hours did you work and how much stress did you deal with in order to earn that $20,000? When you calculate the amount of time it took for you to earn this amount of cash, you’ll become sick to your stomach when you watch it all disappear.

Side note: Be sure to read about when you should purchase your coverage for the best benefits.

Two Kinds of Travel Cancellation Insurance

General Cancellation

Generally, there are a certain level of travel cancellation benefits when you purchase this type of insurance. The scenarios that are covered, however, are usually limited to extreme cases. In addition, every insurance company is slightly different. Here are just a couple of examples that are usually offered:

What is Covered? 

  • You are required to serve on a jury or have been subpoenaed.
  • You have been a victim of a severe assault.
  • A strike that directly affects your travel plans 
  • A terrorist attack that has affected your destination or place of departure.
  • A death in the family.
  • You have recently developed a medical condition and your doctor advises you to cancel your trip.
  • A natural disaster that destroys your accommodation at the planned destination.

Cancel Your Trip For Any Reason

There is an upgraded version of Travel Cancellation Insurance, and this allows you to cancel for any reason that you choose. 

What is Covered?

Well, just like the name suggests, you can cancel your trip for any reason without question. Keep in mind, however (depending on the insurance company), typically 50 – 75% of the prepaid trip would be reimbursed.

Travel Cancellation Insurance is Important because often trips cannot be refunded
Exploring the front of a cruise ship.

When You Are Usually NOT Covered With Cancellation Insurance

Be careful with some of the fine print when purchasing Travel Cancellation Insurance. Here are just a couple examples of why you would be denied after making a claim:

  1. Even though you knew a natural disaster was starting to develop, you purchased your travel plans anyway.
  2. You booked your travel plans even though you knew that your pre-existing medical condition was not completely under control.
  3. You booked your travel plans even though you knew that there was a possibility that the plans could be interrupted because of a specific event potentially unfolding.
  4. You did not receive your travel visa in time because you did not prepare far enough in advance .

Again, these are only a couple of examples. There are so many more pieces to the fine-print that you should read. In addition, each company’s completely different. Different rules and regulations. It’s important that you do your own homework. 

Travel Cancellation Insurance is Important because it gives you piece of mind
Exploring the coast somewhere in Scotland

Examples of Why Cancellation Insurance is Important

Trip Cancellation Example 1

A few months ago, you and your family booked your annual trip to the Bahamas. You have been doing this every year for the last five years. You’ve become very confident about organizing this trip because you have done it so many times in the past. This trip is not very cheap, either. Between the cost of flights for everyone, hotel, food, excursions, transportation, visas, etc…the total cost for a 12-day trip is about $15,000 USD. 

You chose not to purchase Travel Cancellation Insurance because the last 4x have gone perfectly smooth. There has never been a single problem. However, three days before you intend to fly to the Bahamas, you get a terrible phone call. It’s the hospital informing you that your sister has been in a fatal car accident. The trip simply must be canceled. When you call the booking agent, they are empathetic about your situation but there is nothing that they can do to return your money. You just lost $15,000, instantly. 

Trip Cancellation Example 2

A while back, you booked your first solo trip to a foreign country. You are so excited to go.  While waiting at a stoplight in your car, someone smashes into the back of your car with their truck. The other driver wasn’t paying attention. Unfortunately, you have been injured. Your shoulder has been dislocated and something is terribly wrong with your neck.

After spending a day at the hospital, you have learned that is going to be virtually impossible for you to leave on your solo trip. You must cancel your plans. Unfortunately, both the airline and the travel organization refuses to refund your money. Unfortunately, you did not purchase Travel Cancellation Insurance. You will lose a lot of money.

You may be thinking that these scenarios are rather rare. It is very unlikely that they will happen to you. In fact, you are correct. 100%. But the reality is that if something like this does happen to you then you will in fact lose a lot of money. Trip cancellation insurance is simply ‘peace of mind’ knowing that you are covered if for some reason a terrible event does take place. It’s important to plan for the unexpected. Nobody expected these terrible events to happen to them, either.

Travel Cancellation Insurance is Important because it can cover a death in the family
Walking along one of the piers on Guernsey Island, UK.

You May Not Know Which Travel Insurance Company To Choose

If you aren’t sure which Travel Insurance Company to choose, this is what I would do If I were you…

Here is a very small list of recommended travel insurance companies by me. Quickly fill out each form to get a quote. After you have received a price estimate, then check the policies of each. Generally, these companies have good policies for their customers (that’s why I have chosen them), but, there may be one or two policies that are particularly important to you. Choose the policy that fits your needs. The prices will be similar to each other. But price, alone, isn’t the one and only factor.


Hey - I'm Brock. I grew up in the USA, and I have been a full-time Solo Traveler since June of 2016. I am also a Travel Vlogger on YouTube where my primary focus is to simply hang out with local people around the world. My full story is here: About Me

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