Trip Cancellation Insurance In Canada: What's Covered And How To Claim

Many travel insurance packages include some form of trip cancellation insurance. If you have to cancel an upcoming trip for a covered reason (like death, sickness, or weather), you’ll receive reimbursement for your prepayments or penalties that you incur as a result.

While no one wants to cancel a much-awaited trip, sometimes it happens. Trip cancellation insurance can make the process a little less painful and help you recoup your losses.

Let’s dive into the details of trip cancellation insurance and how you can file a claim.

What is trip cancellation insurance?

Trip cancellation insurance is a policy that provides financial protection if 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.

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. They typically include:

• Unexpected death, injury, or sickness of one of the travellers
• 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 a) more than 30% of the trip or b) 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 travelers 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 one of the above reasons, your travel insurance would cover any non-refundable expenses up to the limit defined in your contract.

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.

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 you were booked at
• 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 extra costs you may incur, like 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 listing of the best credit cards that offer this valuable insurance, including the maximum amount of 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 for an individual, not the maximum coverage the card offers.

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. Their 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, alllow 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 online insurance portal before this time is up.

Once submitted, the insurance agency may follow up with confirmation that they received your information and maybe some further questions. At this point, the hard part is done and you should receive your compensation shortly (assuming all is well).

FAQ

Does travel insurance cover you if you have to cancel?

Travel insurance can provide coverage if you have to cancel for a covered reason. If you get your travel insurance through a credit card, you must have paid for the trip with the card in order to file a claim.

Can you buy trip cancellation insurance after booking?

Yes, you can purchase trip cancellation insurance any time before you depart. Once you depart, trip cancellation insurance is no longer valid.

Do you get a full refund with travel insurance?

The exact amount of your reimbursement depends on your insurance coverage. Some policies reimburse you the full amount while others will cover a percentage of the total.

How late can you add travel insurance?

The general rule is that you have to buy travel insurance before you depart for your trip. That said, some providers require you to purchase coverage at least a certain number of days before your trip.