While it’s vital not to underestimate the importance of travel insurance to provide cover for unfortunate events during your trip, it can be easy to overlook the need for a policy to include cover for cancellation costs.

The concept of trip cancellation insurance is self-explanatory. If your trip or an element of your plan is cancelled, the insurer will reimburse you for any accommodation, flights or other pre-booked costs you incurred.

A cancellation policy can cover you in the event of:

  • Sudden serious injury or illness to a relative (pending conditions)
  • An accident affecting you or your travel companion(s)
  • A natural disaster either at home or at your destination
  • Employers cancelling leave (for those in full-time employment only)
  • Being summoned for jury duty.

If any of these situations arise and you are not equipped with trip cancellation insurance, you will have to accept any financial loss yourself, with the exception of refunds (full or partial) granted at the discretion of the individual institutions through which you made your bookings.

It’s advisable to purchase trip cancellation insurance the same day you book any flights or accommodation, rather than just before you depart, to lessen the chance of something going wrong before your trip and leaving you without cover.

Most claims against trip cancellation are made prior to initial departure but hiccups can also occur mid-travel, causing partial cancellation or added expenses. Whether it’s because of sudden illness or time-critical transport delays or cancellations, a policy that includes cover for cancellation costs will insure you for alternative transport, travel delays and disruptions.

Different trips involve different variables. For example, skiing holidays are subject to various problematic events like bad weather and avalanche closures. So check any policy carefully to make sure it covers you for accommodation, lift passes and equipment hire that you paid for in advance.

All travel bears an element of risk. Sometimes that may even be one of the prime motivations for the trip – to get out of your comfort zone. But there’s no benefit in ignoring common sense completely. Finding the right cancellation cover can give you the freedom and security to enjoy your holidays.

This is general advice only and does not take into account your individual needs, objectives or financial situation. Before you buy any policy, make sure you read the product disclosure statement.