Trip Cancellation Insurance in Canada: What's Covered and How to Claim

Trip cancellation insurance can help cover costs when you have to cancel an upcoming trip. Whether it's through your credit card or another travel insurance provider, as long as your reason for cancellation is approved by your policy, you'll receive reimbursement for your prepayments and/or cancellation penalties.

This article walks you through what's covered – and what's not – by typical trip cancellation insurance policies, explains the differences between this and other types of travel insurance, shows you how to make a claim, and more.

What is trip cancellation insurance?

Trip cancellation insurance is a type of insurance policy that provides financial protection if/when you have to cancel a trip that you've already booked or made payments towards.

To take advantage of your coverage, you'll need to file a claim with your insurance provider. They'll reimburse you for eligible expenses, like prepayments or penalties. The amount that you'll be reimbursed depends on your plan – for instance, you might get 75% of your insured trip costs.

Some policies list coverage limits, so be sure to read your terms and conditions carefully.

What does trip cancellation insurance cover?

Trip cancellation insurance covers prepaid costs related to your trip up to the time of your intended departure. You'll find an extensive list of eligible reasons for cancelling your trip in your insurance booklet, but you might qualify for reimbursement if:

• One of the travellers becomes sick, injured, or dies.
• A natural disaster destroyed your home or business.
• You lost your job at no fault of your own or your employer asked you to relocate your permanent residence.
• A Canadian travel advisory is issued for your destination after you book your trip.
• Your travel supplier goes bankrupt.
• Bad weather or mechanical failure delays your transportation, and you miss more than 30% of the trip or miss a connecting flight/vehicle.

Each provider's insurance certificate will look different, but the above reasons are pretty standard. Some policies include more niche reasons for trip cancellation, such as one of the travellers being selected for jury duty that conflicts with the trip.

If you already booked your flight, hotel room, and/or excursions but had to cancel your trip for an eligible reason, your travel insurance would cover any non-refundable expenses up to the limit defined in your contract.

Situations that aren't covered by trip cancellation insurance

If you can't find a specific reason in your insurance certificate, it's probably not covered. You're also not covered if a travel advisory was in place when you booked the trip. Keep in mind that trip cancellation insurance is only in effect before you begin your travels.

Here are some other situations that aren't covered:

• You lost your personal belongings during the trip.
• You become anxious about flying or travelling and decide to cancel the trip.
• Your travel itinerary changes before the trip, but it isn't cancelled.
• There's a labour disruption or strike that leads to your trip being cancelled.

If you're experiencing a medical condition caused by a pre-existing condition, trip insurance might or might not apply. This situation really varies by insurer, so don't hesitate to contact the insurer and explain your personal experience.

Trip cancellation insurance vs. trip interruption insurance

While trip cancellation insurance covers you before you depart, trip interruption insurance provides financial protection once you're on the trip.

You can typically file a trip interruption claim for the same reasons as a trip cancellation claim – sickness, death, injury, natural disasters, etc. You would receive reimbursement for the non-refundable, prepaid portions of your trip if it's cancelled or significantly delayed once you've departed. For example:

• A storm pops up, and the airline cancels your connecting flight.
• A natural disaster hits the resort where you were booked.
• You fall ill and are unable to continue your travels.

If the reason for your trip interruption is covered, you should be able to secure reimbursement for non-refundable costs. It may also cover any extra costs you incur, such as flight changes.

How to get trip cancellation insurance

You can buy trip cancellation insurance from most travel insurance operators in your province. Be sure to get multiple quotes to ensure you're not overpaying for coverage – and secure it as soon as possible after booking your trip.

You may also have trip cancellation insurance through your credit card. The catch is that you must pay for your whole trip with the card (or associated rewards points) to be eligible for the coverage.

Here's our list of the best credit cards that offer this valuable insurance, including the maximum individual coverage they provide:

If your card isn't listed above, you can search for your card and select the "insurance coverage" section to see a full list of the card's included insurance. Note that for trip cancellation, we list the coverage amount per individual, not the card's maximum coverage.

How to make a trip cancellation insurance claim

To see if it's possible to cancel an upcoming trip, read through your insurance certificate to check if your circumstances are covered. If they are, contact your insurance provider as soon as possible to start a claim. Some certificates require you to begin the process within a certain period.

Here's a quick overview of the steps required to file a cancellation insurance claim:

1. Contact the insurance company

Determine how much you need to claim and call your insurance company. The contact number should be clearly listed on the insurance certificate.

The agent will ask about why you're cancelling, who was travelling with you, and how much you're claiming. If you're using credit card travel insurance, they'll also require the last 4 digits of your card.

Some providers, like Amex, allow you to start a claim online.

Once that's done, you'll likely be sent:

• An email with a claim form (or you may be able to access a claim portal online)
• A list of the documentation you have to provide
• A claim number you can provide if you need to call back

If you're making a claim with your credit card, here's a list of the numbers to call for the major issuers in Canada:

2. Gather all required documentation

What you'll need to provide will vary from case to case, but you'll likely need original receipts, credit card statements, screenshots of government travel advisories, and/or proof that you cancelled the trip.

If you have trouble finding the documentation requested, reach out to your insurer to see if they'll accept an alternative.

3. Submit the claim within the required time frame

The email with your claim information will provide a specific time frame in which you must submit the documentation (often 90 days). Make sure you submit everything to the email address or via the online insurance portal before this time runs out.

Once submitted, the insurance agency may follow up to confirm they received your information and may ask further questions. At this point, the hard part is done, and you should receive your compensation shortly, assuming all is well.

FAQ

What reasons are covered under trip cancellation insurance?

Trip cancellation insurance reimburses you when unexpected events force you to cancel before departure, including sickness, injury, or death. Other reasons include natural disasters, job loss, Canadian travel advisories, travel provider bankruptcy, mechanical failure delays, or bad weather that causes travel complications, and more.

What can I claim on travel insurance for a cancelled flight?

Travel that you pay for before your trip is often covered by cancellation insurance. For instance, you could be reimbursed for rental car pre-payments, hotel bookings, and even the flight itself. Remember that you have to book the travel with your qualifying credit card if that's how you're getting coverage.

How much of a refund will you get with trip cancellation insurance?

The amount you're reimbursed depends on what you paid for the trip and, ultimately, the coverage limit for your policy's trip cancellation insurance. Some insurers may reimburse you the entire amount, while others only pay a percentage of your costs.

Does travel insurance cover you if you have to cancel?

Travel insurance may provide coverage if you have to cancel for a covered reason, though this type of trip cancellation coverage isn't included with all insurance packages. If you get your travel insurance through a credit card, you must have paid for the trip with that card to file a claim.

Can you buy trip cancellation insurance after booking?

Most travel booking platforms allow you to buy trip cancellation coverage at any point before the trip begins. Keep in mind that if you're getting trip cancellation insurance through your credit card, you must charge the entire cost to the card.