What Is Trip Cancellation Insurance?

What Is Trip Cancellation Insurance?

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated November 3, 2021

There’s a lot that goes into planning a trip, including accommodations, airfare, transportation, entertainment, food, and so forth. But even the best planning won’t stop unexpected circumstances from throwing a wrench in your travels and forcing you to stay home. 

If you’ve prepaid your non-refundable trip, you could be paying for a vacation that you never actually take.

That’s where a trip cancellation insurance policy comes into play. With this type of plan in place, you can be covered for the cost of your trip in the event that it is cancelled for whatever reason.

What’s The Difference Between Trip Cancellation And Trip Interruption Insurance?

It’s not uncommon to confuse “trip cancellation” and “trip interruption” insurance, but they differ slightly. 

Trip cancellation insurance provides coverage to you when your trip is cancelled for some reason before you leave. If your airfare or hotel accommodations are non-refundable, for instance, a trip cancellation insurance policy will reimburse you for these costs in case you are unable to leave for a covered reason. 

This type of plan starts soon after you buy it and ends when you actually leave for your trip. After you depart, your coverage ends. 

On the other hand, trip interruption insurance covers events that interrupt your trip after you’ve already departed. Coverage starts after you leave for your trip. If your travels are disrupted at any point before you were scheduled to go back home, this policy will reimburse you for any costs required to get you home.  

Are you a frequent traveller? Consider multi-trip insurance

What Reasons Are Covered With Trip Cancellation?

The specific reasons that are covered under a trip cancellation policy depend on the exact plan that you have taken out. It’s important that you are fully aware of what’s covered under your policy before you sign on the dotted line. 

That said, certain reasons are commonly included in these types of policies, such as the following:

  • You or a travelling partner get sick or injured unexpectedly
  • A family member has been hospitalized or has died
  • You or your spouse are pregnant and are due to give birth within a 9-week span of your scheduled departure date
  • Visa issues that are beyond your control
  • The travel supplier suddenly stops operations 
  • There is a travel advisory in the destination you intend to travel to
  • Bad weather has made travel dangerous
  • You’ve been ordered to attend jury duty
  • You lost your job
  • Threats of terrorism

Where Can I Get Trip Cancellation Insurance?

Trip cancellation insurance can be purchased a handful of ways:

Credit Card Issuers

If you have a credit card, you may have access to insurance products, including trip cancellation insurance. Some policies are included in the cost of your annual fee, while others may be purchased as an add-on product. Get in touch with your credit card provider to find out what’s available to you. 

Check out our list of credit cards with trip cancellation insurance.


Like credit card issuers, banks typically offer insurance products, including travel interruption and cancellation policies.

Travel Insurance Companies

Insurers offer trip cancellation insurance either as standalone products or as additional coverage that you can add to an existing travel medical insurance plan. 


Most reputable airlines offer the option to add trip cancellation insurance when you purchase an airline ticket. 

Best Trip Cancellation Insurance Providers

CompanyTypes of Insurance offered Geographical Availability 
Rates.ca– Travel InsuranceAll of Canada
Insurance Hotline– Travel Insurance
– Snowbird travel insurance
– Trip cancellation insurance
All of Canada
Manulife– Travel Insurance
– Trip cancellation insurance
– Travel insurance for students studying abroad and visitors travelling in Canada
All of Canada
TD Travel– Travel insurance
– Snowbird insurance 
– Trip cancellation and more
All of Canada
CAA-Quebec Travel– Travel insurance with or without medical coverage
– Emergency medical care insurance 
– Trip cancellation or interruption insurance 
Quebec Only 
BCAA– Emergency medical insurance 
– Trip protection coverage 
– Visitors to Canada insurance
BC & Yukon

Cost Of Buying Trip Cancellation Insurance

While this type of insurance will vary in cost depending on where you buy it from and the extent of the coverage you require, you can expect to pay anywhere from 4% to 10% of the total price of your trip for travel insurance. 

However, trip cancellation insurance on its own will cost less, as it won’t include all the other types of coverage found under the umbrella of a comprehensive travel insurance policy, such as medical insurance. In this case, you can expect to pay less than what you would pay for a full travel insurance plan. It’s estimated that the average price for trip cancellation insurance is approximately $170.

Trip Cancellation Insurance FAQs

Is trip cancellation insurance worth it? 

The answer to this question depends on your appetite for risk and your financial situation. Even if you take every precaution to ensure a safe and seamless trip, anything can happen that can derail your plans. And if your flight or hotel accommodations are non-refundable, you could be left paying the full cost of your trip, even if you don’t end up going. In this case, having a trip cancellation plan in place can reimburse you for the costs of your trip.   Consider buying travel cancellation insurance if your trip is non-refundable and expensive, or if you plan to travel for an extended period of time. You may also want to think about buying a policy if your trip was booked far in advance, or if you’re a senior with health issues. 

Can you buy trip cancellation insurance after you’ve booked your flight/vacation? 

While the best time to buy a trip cancellation insurance policy is right after you book your trip, you may be able to buy a policy as far out as 48 to 72 hours before your scheduled departure date.

What information do you need to compare trip cancellation/travel insurance quotes? 

It’s easy to compare different trip cancellation insurance quotes by using an online price aggregator, similar to Expedia or Kayak when comparing prices for flights and hotels. To compare quotes, you’ll need to supply the following pieces of information to get the most accurate quotes possible:
  • Your location
  • Your trip destination
  • Your departure and return dates
  • Cost of your trip per traveller
  • Number of travellers
  • Your age

Final Thoughts

No matter how carefully you plan your trip, there’s always the possibility that something may happen that could force you to cancel. But with a trip cancellation policy in place, you can have any non-refundable portion of your travels reimbursed so you won’t be stuck with a big bill for a trip you never take.

Rating of 5/5 based on 2 votes.

Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

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