What is trip cancellation coverage in travel insurance, how to file a claim

Trip cancellation coverage reimburses you for the loss of deposits up to the maximum amount stated in your policy if your trip is cancelled before departure

Don't want to miss the best from Business Standard?

Travel insurance is increasingly becoming a necessity for travellers, especially in light of rising uncertainties in travel plans. One of the most significant features of travel insurance is trip cancellation coverage, which helps mitigate financial losses when a trip cannot proceed as planned. This coverage typically reimburses travellers for non-refundable and prepaid expenses, such as flight tickets, hotel bookings, and other travel-related costs. Some insurance plans might also cover the irrecoverable cost for planned events or concerts such as certain sports activities or music concerts.

It is crucial to note that coverage is only provided for specific reasons, which typically include:

 

Medical emergencies: Illness or injury affecting the insured, their travel companions, or immediate family members that leads to trip cancellations. For instance, if a traveller falls ill just days before departure, trip cancellation insurance can cover the costs associated with unused tickets and accommodation.

 

Natural disasters: Events such as earthquakes, floods, or severe weather conditions that disrupt travel plans are also covered. For example, if a flood hits a destination just before a scheduled trip, travellers can claim their non-refundable expenses.

 

Personal emergencies: Situations like the death of a family member or other significant personal crises can also qualify for trip cancellation coverage. Many policies stipulate that these events must be documented and reported to the insurance provider.

 

Terrorism and civil unrest: If a traveller’s destination experiences a terrorist attack or civil unrest, they may be able to cancel their trip and claim reimbursement for their expenses

 

How can customers file a claim for trip cancellations/delays

 

Customers must submit the relevant documents to the insurer. The list might vary as per the requirement of each insurer. For instance, ACKO provides trip cancellation coverage if the customer is hospitalised for a minimum of 48 hours, for which the policyholder will need to submit a proof such as the discharge summary, confirmed hotel and flight booking details, along with the cancellation proof and the amount deducted by the flight operator/hotel, said Brijesh Unnithan, senior vice-president, Embedded Insurance at ACKO.

 

Exclusions and considerations

 

While trip cancellation insurance provides extensive coverage, there are notable exclusions. Common exclusions include cancellations due to pre-existing medical conditions, pregnancy-related issues, or situations known before purchasing the insurance. Additionally, if a trip is cancelled because of a change in mind or personal preference without a valid reason, reimbursement may not be applicable.

 

Travellers must also be aware of the time frame for filing claims. Most insurers require that claims be submitted within a specific period following the cancellation, and some policies mandate that cancellations be made a certain number of hours before the departure time to qualify for reimbursement.