Trip Cancellation Travel Insurance (2026): What's Covered, What's Not, and How to Choose a Policy That Actually Pays

Trip cancellation travel insurance reimburses non-refundable, prepaid travel costs if you must cancel your trip for a covered reason. This typically includes flights, hotels, tours, cruises, and other bookings made in advance. Cancellation cover is part of most comprehensive travel insurance policies, but the covered reasons vary by insurer and policy.

Common covered reasons include: serious illness or injury of the traveler or close family member, hospitalization, death of a close family member, major home emergencies (like severe damage making your home uninhabitable), jury duty, and certain employer-related situations. The key is that the reason must be unexpected, serious, documented, and listed in the policy as a covered reason.

Standard cancellation insurance does not cover changing your mind. If you simply decide you no longer want to go, that's not a covered reason. However, 'Cancel For Any Reason' (CFAR) upgrades can reimburse you even if your reason isn't on the standard covered list—though CFAR comes with strict conditions and typically offers partial reimbursement (not 100%).

CFAR is a cancellation upgrade that can reimburse you even if your cancellation reason isn't covered under standard policies. However, CFAR typically: must be purchased within a short window after your first trip payment, offers only partial reimbursement (often 50-75%), requires cancellation a minimum number of days before departure, and is not available for all destinations or trip types.

For cancellation cover to work properly, you usually need to buy insurance soon after booking/paying for your trip. Many cancellation benefits are designed to protect against unexpected events after booking. CFAR almost always requires early purchase (often within 14-21 days of initial payment). If you wait too long, you may not qualify for full cancellation benefits.

Many policies exclude pre-existing medical conditions from cancellation cover—meaning if you cancel due to a condition you already had at the time of purchase, the claim may be denied. Some policies offer pre-existing condition waivers if you buy insurance within a certain timeframe after booking and meet other criteria. Always declare conditions and check the policy wording.

Cancellation claims typically require: proof of what you paid (booking confirmations, invoices), proof of non-refundable amounts (cancellation terms), proof you cancelled with the supplier, and proof of the cancellation reason (doctor's certificate, hospital documents, death certificate, police report, or employer letter depending on the situation). If you can't prove it, it usually won't be paid.

If the airline cancels your flight, the airline is usually responsible for rebooking you or providing a refund under EU261 or similar regulations. Travel insurance cancellation cover is mainly for when YOU need to cancel. However, some policies cover missed connections or extra expenses caused by airline delays/cancellations—this falls under 'travel delay' or 'missed departure' cover rather than trip cancellation.

No. Trip cancellation means you cancel before you leave. Trip interruption means you've already left and something happens that forces you to cut the trip short or return home early. A good policy includes both, but the triggers and proof requirements can differ. If you're buying cancellation, check that interruption is also included.

Yes, cruises are often one of the highest-cancellation-risk bookings because deposits and penalties can be large, itineraries are fixed and time-sensitive, and you usually have connected flights and hotels. If you're taking a cruise, cancellation plus missed departure protection is especially important.

Cancellation insurance is typically included in comprehensive travel insurance policies. Costs vary based on trip value, traveler age, destination, and coverage level. As a rough guide, comprehensive policies with cancellation cover often cost 4-10% of your total trip cost. CFAR upgrades typically add 40-50% to the base policy premium.

Cancellation insurance is most worth it when: you have significant non-refundable costs (expensive flights, prepaid hotels, cruise deposits), health factors or family responsibilities create real cancellation risk, and you can't easily absorb the financial loss. If your bookings are mostly refundable or the trip is low-cost, cancellation cover may be less critical. Evaluate your actual exposure before deciding.