Should you bet that your expensive trip will come off without a hitch? Unforeseen events sometimes cause costly trips to be canceled or interrupted. Trip-cancellation insurance could cover your financial losses when they do. Expect to pay a premium equal to 4% to 10% of the trip’s nonrefundable travel costs for this coverage. Older travelers generally pay more than younger ones. How to decide if trip insurance is right for you…


Covered reasons generally include health problems for the traveler(s)…health problems for a nontraveling member of the family that require the traveler to provide care (the policy will specify which relations qualify)…the death of the traveler or a family member…weather-related events and related natural disasters…airplane mechanical problems…airline strikes…and terrorist events that result in mandatory evacuation. (Terrorist events typically must be within 30 days of travel and in a stop on your itinerary.)

Some policies offer as an option the right to cancel the trip “for any reason.” This typically adds 40% to 50% to the cost of the policy, however, so it’s worthwhile only if you’re concerned about a particular cancellation cause that otherwise wouldn’t be covered.

Examples: Your daughter is due to give birth not long after your cruise, and you want to be able to cancel if the baby arrives early. Or your best client sometimes has emergencies that require your attention on short notice.

Caution: You typically can’t buy insurance for just a portion of a trip. For instance, if you are flying to Europe and staying in a hotel, you can’t buy insurance to cover the hotel stay but not the flight (unless you are paying for the flight with frequent-flier miles, which are not insurable). And if you can cancel your hotel reservation penalty-free before the trip starts, you may not need insurance.

Insurers often bundle trip-cancellation coverage together with lost-luggage coverage, foreign medical coverage and medical evacuation coverage—US medical insurance and Medicare rarely extend beyond the border. The terms of this additional coverage can vary greatly. Compare coverage limits and deductibles before settling on a policy.


Buy the insurance within 14 days of making your first trip-related payment. Policies purchased after this 14-day window closes often don’t cover losses stemming from preexisting medical conditions. (Some companies extend this window to 21 or 30 days.) Buying coverage well in advance of the intended departure date also reduces the odds that losses will not be covered because they stem from “foreseen circumstances”—risks that were known at the time the policy was issued.

Example: Trip insurance does not cover losses caused by tropical storms or hurricanes already named when the policy was issued.


Leading trip-cancellation insurance providers include Travel Guard (800-826-4919, and Allianz Global Assistance (800-284-8300, Alternatively, SquareMouth (800-240-0369, and InsureMyTrip (800-487-4722, provide quotes from multiple travel insurance providers.

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