In the excitement of booking flights, preparing visas, and planning all the sites you’re going to visit on your holiday, it’s easy to forget that there’s a chance an emergency could happen which prevents you from travelling at all.
Unfortunately, many Australians have to cancel their holiday each year.
Becoming sick or injured can mean you’re no longer fit to travel, or you may need to stay home to be with your partner, child or parent if they suddenly become seriously unwell. If that happens, you could lose the deposits you’ve already made towards your holiday, including the costs of your flights, cruise, accommodation or any tours – unless you have cover for cancellations in your travel insurance.
Cancellation travel insurance provides you with cover for emergencies that affect your travel.
Find out everything you need to know about getting the right cover in place for unexpected cancellations below so that you can find the best travel insurance policy to cover your next holiday.
What are the most common causes of trip cancellation?
- Natural disasters – an earthquake, tsunami, or volcanic eruption may mean you are no longer able to travel to your destination.
- Becoming sick or injured –you can never guarantee you won’t come down with a virus, or become injured right before you travel. If you’re cooped up in hospital, or your doctor says you have to stay at home and recover, you’re no longer fit to travel and may have to cancel your holiday.
- Your travelling partner becoming sick or injured – if you booked a trip as a duo, you may not be able to travel on the holiday by yourself if your travelling partner becomes sick or injured.
- A parent, child, or your partner becoming sick or injured – you might have to stay home, or cut your holiday short, to care for a close relative.
- Flight cancellations – your airline may cancel your flight at the last minute due to severe weather or a strike.
- Civil unrest – should rioting or violent unrest occur at your destination, you may be required to cancel your trip.
Remember to check Smartraveller before booking your trip to be aware of any risks at your chosen destination.
What expenses does cancellation travel insurance cover?
Cancellation cover allows you to recover lost deposits for prepaid travel arrangements, where the cancellation results from unforeseen circumstances. This means that you’re covered for more than just flights.
There’s a wide range of deposits that can be covered under the cancellation benefit, including:
- Accommodation – including any pre-paid accommodation or cancellation charges.
- Hired equipment – such as ski gear and car hire.
- Activities – if you’ve already paid for a day-cruise, bungee jumping, a fishing tour, or other activity, this may be covered.
- Transport – this include flights, a cruise, and trains which you may have pre-booked.
Remember to check your travel insurance provider's Product Disclosure Statement (PDS) to see which benefits are covered.
Are travel agent cancellation fees covered by travel insurance?
Yes, your travel agent’s cancellation fee may also be covered.
Read the Product Disclosure Statement (PDS) to find out how much cover is offered for this benefit.
How much cancellation cover is provided by travel insurance?
The amount of cancellation cover you can get will vary between travel insurers and the levels of cover they offer.
Some travel insurance options, like Fast Cover’s Comprehensive policy, offer unlimited cancellation cover for flights and accommodation, while other insurance policies offer cancellation cover up to a set amount.
Make sure to read the Product Disclosure Statement (PDS) before you purchase a policy to understand what you are covered for, and any limits to cancellation benefits.
Daniel was covered for the costs of his trip to Thailand*
Daniel was in a car accident before his holiday to Thailand, breaking a few ribs.
Luckily, he had purchased a Comprehensive travel insurance policy which included unlimited cancellation cover. That meant he received cover for the costs of his flight and the cancellation fee for his unused prepaid accommodation.
Will I be covered for flight delays which cause me to miss my second flight?
It will depend on the reason your first flight was delayed.
If the reason you missed a connecting flight was because of an unexpected and unforeseen event such as a natural disaster or weather event, a Comprehensive travel insurance policy may provide cover for your travel delays and alternative transport expenses.
However, if the delay was caused by the airline or due to a mechanical fault, it is often the airline’s responsibility to assist you with the result of flight delays. For this reason, it may not be covered by your travel insurance policy.
In both cases you would likely need to seek reimbursement or attempt to reschedule your flight with the airline in the first instance before making a claim.
What if my flight is cancelled due to a fault with the airline (e.g. aircraft maintenance)?
If cancellation is the result of a fault with the airline, the airline may:
- Reschedule your flights or organise an alternative flight
- Provide you with a refund.
Travel insurance generally doesn’t provide cover in these instances as it would be up to the airline to reimburse or arrange an alternative flight for you.
Check your travel insurance provider's Product Disclosure Statement (PDS) for further information.
Are strikes at an airline covered by travel insurance?
Generally, travel insurance does provide cover for flights that are cancelled as a result of an airline strike.
However, if your airline reimburses you or reschedules your flight, your travel insurance will not provide cover.
You should also be aware that if airline strikes have been going on for some time, and have been widely reported at the time you purchased travel insurance, your travel insurance may not provide cover for your flight as it is no longer an ‘unforeseen’ event.
Tamsin and her husband were covered when their daughter became sick*
Tamsin planned a holiday to Italy with her husband to celebrate a wedding anniversary.
In the weeks before they travelled, their teenage daughter became seriously unwell, and was hospitalised. Tamsin was covered by her Comprehensive Travel Insurance for the costs of her flights, tours and accommodation when she cancelled her holiday to stay with her daughter.
Are there any exclusions to cancellation cover?
There are some exclusions it is important to be aware of. Always read your Product Disclosure Statement (PDS) to ensure you know what you may not be covered for.
Also remember that whenever you make a travel insurance claim, you should collect and present as much evidence as you can – including any documentation showing what you paid for, and notification where what you’ve booked has been cancelled.
Common exclusions to cancellation cover in travel insurance include:
- Cancellations related to pre-existing medical conditions. If your pre-existing medical condition is not covered by your policy, you won’t have cover in place if that pre-existing medical condition causes you to cancel your holiday.
- Cancellations related to mechanical faults, overbooking, or repairs, as the airline, bus line or rail authority will generally be responsible for compensation in these cases.
- If you miss your pre-arranged transport if you miss it due to your own negligence. For example, you won’t be covered if you miss your flight because you didn’t leave enough time to get to the airport.
- If you change your mind about your destination, and simply want a refund on your original flight so you can put the money towards a different one. In these cases, you’ll have to discuss your options with the airline.
- If your travelling companion decides they no longer want to travel at all, or you decide you don’t want to travel.
- If financial, contractual or other business obligations cause you to cancel your trip. This doesn’t include unexpected redundancy.
- If your employer cancels your pre-arranged holiday leave (exceptions to this exclusion may apply to full-time members of the Australian Defence Force or federal, state or territory emergency services).
- If your tour operator is unable to complete a pre-booked tour because not enough people have signed onto the tour.
- If you cancel your trip due to the death, sickness or injury of people who are not close relatives.
Check the General Exclusions section in your travel insurance provider's Product Disclosure Statement (PDS) to clarify which exclusions may apply to your policy.
How far in advance should you get cancellation cover?
Preparing to travel is vital to your safety overseas.
Travel insurance that covers cancellation is part of your preparation. The earlier you buy travel insurance with cancellation cover – the longer you have cover in place in case something goes wrong before your holiday. That’s why it’s good to start looking at travel insurance early on!
Once you’ve purchased your flights, booked your tour or cruise, you should be aware that without travel insurance, you could lose your deposits if you have to unexpectedly cancel your holiday. Cancellation cover can provide peace of mind that your deposits are safeguarded.
Cancellation cover provides you with cover for emergencies before you’ve even begun packing your bags or boarded your overseas flight. You can never predict what may happen in the days, weeks, or months before you travel – which is why there’s cancellation cover provided by travel insurance.
*Stories are fictitious examples drawn from the experiences of Fast Cover travellers and staff. Any resemblance to actual persons, living or dead, or actual events is purely coincidental.