Flight Cancelled? Need to Know for Trip Cancellation
How many have heard this line lately, “Due to severe weather conditions, all flights leaving for______have been cancelled.”
Ah, winter. It’s bad enough that the -30 degree temperature froze your car battery or the sudden warm weather causes freezing rain. But why, oh why, do you have to go and mess with our carefully planned vacation? It’s hardly fair, and dang it, we deserve a winter break to those sandy beaches and refreshing waves! But what can you do? The weather is the weather, and safety is always the most important thing. Safety means your physical well-being, of course, but also your financial safety.
Travel insurance is sold as a package policy that covers more than one type of risk and can help protect your financial investment. While the primary coverage is for medical expenses, many policies also cover Trip Cancellation or Interruption, lost baggage, delays, and more. Here are some tips for understanding Trip Cancellation Insurance to help you have a smoother time if you need to file a claim:
Review Limits & Exclusions
If you’ve purchased Trip Cancellation coverage, ensure you spend time reading and understanding what the policy covers. For example, what are the covered perils that need to trigger for you to claim under the Trip Cancellation coverage? Is unexpected illness, travel advisory, cancelled flights, job loss, or pregnancy a covered peril for this coverage?
As you review your policy, please take note of any questions you might have and don’t hesitate to bring them up with your broker. For example, what is the maximum coverage limit the insurer may pay if you file a claim?
Ask your broker to help locate the exclusion list in the policy wording to review the complete details before purchasing. A common exclusion would be: “Any claim incurred for a trip booked or for which Insurance is purchased after a physician advised you or your travelling companion not to travel”. Due to legal reasons, most of the exclusions are described in this format in the policy wording and can be difficult to wrap your head around. That is why asking your advisor to review with you is an asset, as they can explain the legal jargon. What the exclusion is trying to say above is: If your doctor told you not to travel before you booked your trip or bought Insurance, the Trip Cancellation coverage CANNOT be used to help you refund the trip expenses. Simply put, if the Doc says NO, then don’t GO.
Booking trips with travel points you’ve been collecting is a great way to save money. However, your travel insurance cannot reimburse any travel arrangements, such as flights, accommodations, etc., that were paid with reward points. When possible, the policies may cover fees for reinstating points. The actual cash value of points is not covered.
What are Non-Refundable Travel Costs?
Now for the part, you’re likely most interested in, what you CAN claim under Trip Cancellation. Pre-paid travel arrangements that you made, such as airline costs, accommodations, rental cars, etc. where you are NOT provided with a refund, can be reimbursed through the insurance policy. Here are some examples of what we mean:
Example: If you are flying Sunwing and they cancel your flight, and Sunwing gives you a refund for the purchased tickets, your insurer CANNOT reimburse you. Why? Because the airline ticket was not a ‘non-refundable’ item as you already received your money back. In other words, the insurance company will not pay for the cost of something that has already been returned to you.
Example 2: You pre-arranged for shuttle transportation, which you pre-pay, and the flight is cancelled. In contrast to the above example, the shuttle company does NOT refund you the amount you paid for the service. You can submit the receipt to your insurer under Trip Cancellation coverage to reimburse the pre-paid cost.
Documentation & Receipts
If you file a claim, you will need your receipts. For all claims, regardless of Trip Cancellation or Trip Interruption, you’ll need to provide proof of purchase to be eligible for reimbursement. A great way to help your adjuster process your claim faster is to include memos outlining why certain expenses occurred.
For example, suppose you had to book an additional night at a hotel because of a flight cancellation. In that case, you’d put that on your proof of loss so your adjuster can understand why there might be an additional hotel receipt outside the original booking. Including a timeline of what took place, when, and the expenses associated with each event can help the claim process go faster. Providing additional context will allow the insurer to understand the situation better so they don’t have to keep coming back to ask for further information. Keeping things as clear and concise as possible will enable you to receive the correct reimbursement amount and avoid having eligible expenses declined because of confusion.
Fun Fact: you should also include any record of refunds you have thus received from travel agents, airlines, hotels, tour companies, etc. When you submit your claim, you’ll need to provide a record of proof for what was refunded and what wasn’t, as extra fees that the refund didn’t include could be eligible underneath your policy coverage.
Reach out to your advisor to discuss Trip Cancellation coverage before your next trip. We hope our tips help make the claims process a little smoother.