Noah Meyer-Delouya, a 25-year-old accountant from Toronto, learned the benefits of trip cancellation insurance first-hand. He and his family purchased cheap tickets to Los Angeles and decided to spend a little extra on trip cancellation insurance for the peace of mind. The policy they chose even included coverage for a full refund if someone contracted COVID-19.
Unfortunately, just days before their trip, both Meyer-Delouya’s mother and brother tested positive for COVID-19. Thankfully, he managed to avoid contracting the virus himself. Nevertheless, the family decided to cancel their trip and take advantage of their trip cancellation policy.
Trip cancellation insurance is different from medical travel insurance. It provides coverage for non-refundable expenses, such as plane tickets, if unexpected circumstances force you to cancel your trip. Will McAleer, Executive Director of the Travel Health Insurance Association of Canada, explains that trip cancellation insurance can cover not only the ticket holder becoming ill but also if a family member falls ill or if there’s an accident or any other unforeseen circumstance. It may also cover non-refundable expenses like accommodations.
McAleer also mentions that trip cancellation insurance often includes trip interruption insurance, which covers the costs of ending a trip early due to uncontrollable situations. For example, if a hurricane hits a resort, trip interruption insurance can cover the unused portion of the trip, as well as additional expenses incurred due to the interruption.
Even though Meyer-Delouya had success with trip cancellation insurance in the past, he has decided not to purchase it for his upcoming summer travels. He questions the value of spending extra money on something that might never happen. Interestingly, a survey by TD Insurance found that a third of young Canadians aged 18 to 34 agree with Meyer-Delouya, considering travel insurance too expensive. However, the same survey revealed that 31% of these individuals could not cover out-of-pocket expenses exceeding $300 on a trip.
According to Ratehub, trip cancellation insurance generally amounts to about 4-10% of the non-refundable expenses of a trip. The average cost of trip cancellation insurance is estimated to be around $170, which is nearly half of the $300 that many young Canadians cannot afford.
When determining the need for trip cancellation insurance, McAleer suggests considering health concerns, policy options, and travel plans. While trip cancellation insurance is not the same as medical travel insurance, it can be useful in medical scenarios. McAleer advises closely examining the policy to ensure coverage of any pre-existing medical conditions.
Additionally, McAleer points out that many people already have trip cancellation insurance through their credit cards or employers, eliminating the need to purchase additional coverage. Meyer-Delouya discovered that the same company that insured his previous trip also covers him through his credit card, which is why he feels comfortable not buying trip insurance for his upcoming travels.
Lastly, the nature of the trip should be considered. McAleer mentions the rise in adventure tourism trips, which come with higher risks. A trip involving activities like scuba diving or bungee jumping has a greater risk factor compared to a weekend visit to family, making trip insurance a wise investment.
In conclusion, McAleer emphasizes the importance of considering trip cancellation insurance as part of the booking process, rather than an afterthought. Understanding the policy and the type of trip one is undertaking is essential for a prepared and stress-free travel experience.
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