Planning summer travel? Placing deposits on hotels, tour packages, cruises, golf fees? All of these are subject to some loss if you have to cancel, but some of your vacation dollars may still be salvaged if you take out trip cancellation insurance. But be careful what you buy.
Trip cancellation is available from any vendors who sell travel insurance, and the fees are usually graded on the value of the trip you are planning. But you need to study the terms of coverage as few plans will cover 100 percent of your losses should you have to cancel or should natural or man-made disruptions interrupt your plans.
Most plans will put a dollar cap on how much they will reimburse you. Some will only reimburse you if a certain share (say 30 percent or more) of your trip is disrupted. Virtually all will impose some pre-existing conditions requirements on your coverage: for example, if you cancel a trip because your grandmother just died from cancer and you knew when you bought the trip she had cancer, you may be out of luck.
You need to know the exclusions and limitations. Don’t assume that your premium will cover any interruption or cancellation. No travel policy covers “everything.”
There are also some Cancel for Any Reason policies in the marketplace that greatly broaden your chance of being reimbursed for cancellations, but even they have some exclusions and limitations on how much they will pay out.
Remember that travel insurance is payment of last resort, and that means that the insurer will pay out only if your hotel, resort, tour operator, or cruise doesn’t. So if you have a cruise problem and the line offers you a voucher for a forthcoming trip as recompense, that will count as payment and the insurer will not reimburse you as you didn’t really suffer a “loss.”
Certainly, if you’re putting out $5,000 or $10,000 for a tour or resort fee you want to be covered in case you, or Mother Nature, cancels out. But clearly understand what is being covered and what the limitations are. Trip cancellation has a lot of fine print. Read it. The best rule of thumb, put down the lowest possible deposit you can get away with.