Many travelers may find themselves in the dark about the different types of travel insurance plans that are available, and which of these policies would benefit them. One of the potentially confusing questions is the difference between Trip Cancellation and Trip Interruption coverage.
A Trip Cancellation policy is a plan that will reimburse the traveler if the trip must be called off before departure due to covered reasons. These reasons will typically include a death or illness in the family, a medical issue diagnosed by a physician that prohibits travel, jury duty or other legal mandate, or adverse weather conditions at the destination or at home. With Trip Cancellation coverage, reimbursement rates will be up to 100% of non-refundable and pre-paid trip expenses for these and other reasons specified in the policy. An example of this type of trip protection put to use would be if weather conditions, such as a hurricane, required canceling flights to the destination for a considerable length of time, causing the entire trip to be called off.
A Trip Interruption policy is a plan that will cover expenses incurred by the traveler if the trip must be cut short (after it has begun), and generally reimburses up to 150% of the pre-paid and non-refundable costs of the trip that will go unused and the extra costs to get you home at the last minute. With this type of coverage, the reasons for the interruption must be covered by the policy and are usually the same as those listed in Cancellation plans. Additional reasons a Trip Interruption policy would come into effect include accidents or illnesses that occur during the trip, a dangerous political environment developing while at the destination, and weather conditions that require mandatory evacuations. For instance, if an insured traveler learned during the course of the trip that a close family member had been hospitalized, the trip protection plan would cover the cost of an earlier return flight home and reimburse for any nonrefundable and prepaid expenses planned for the remainder of the trip.
It is very important for the insured to be familiar with the specific terms of any travel insurance policy to avoid surprises if a claim is denied. For Trip Cancellation policies, the traveler should be aware of all plan limitations, such as: any illness preventing travel must be diagnosed by a physician, weather conditions are only covered if they occur after the policy has been purchased, and what documentation of pre-paid expenses is required for the claim to be approved.
In short, Trip Cancellation coverage provides protection from circumstances arising before the trip starts, and Trip Interruption coverage goes into effect after the trip has begun. Purchasing a travel insurance policy may seem to be an unnecessary extra expense when planning an already expensive trip, but it can prove to be invaluable to a traveler who finds themselves in any of the above situations.