Travel insurance is designed to protect travelers against financial loss from unexpected events that may occur before or during a trip like loss of valuables, baggage delays, flight delays, etc. Everyone purchases Travel Insurance as it provides a peace of mind for unexpected trip cancellations being covered. This coverage provides reimbursement for any prepaid and non-refundable trip expenses that you have already paid for, in case a trip must be cancelled for a covered reason.
Here’s what you need to know about how trip cancellation works when you buy travel insurance in the UAE:
1. Trip Cancellation Coverage:
- When you purchase a travel insurance policy that includes trip cancellation coverage, you’ll be protected against financial losses if you have to cancel your trip due to a covered reason.
- You’ve already paid for up to the maximum limit specified in the policy.
2. Covered Reasons for Trip Cancellation:
Almost all travel insurance policies cover trip cancellation for a range of unforeseeable and unexpected reasons. Some common covered reasons may include:
- Illness or injury that occurs and that causes you to stop prevent travelling.
- Death in the family.
- Natural disasters or severe weather that makes your destination inaccessible.
- Terrorism or political unrest that makes your destination unsafe.
- Unexpected job loss or change in employment.
It’s best habit to read the travel insurance policy wording carefully to understand what will be covered and what won’t be covered.
3. Time Frame for Coverage:
- In order for trip cancellation coverage to be effective, you need to purchase travel insurance before any covered reason occurs.
- Some insurers may have a cap on number of days prior to travel dates where they would consider cancellation costs due to injury/illness.
- Also they won’t cover any injuries or illnesses suffered prior to purchasing the travel insurance.
The best practice is to buy your travel insurance right after you book your tickets as this ensures your coverage for any unforeseen scenario immediately.
4. Documentation Requirements:
Most travel insurance policies require relevant documentation to support any claim for trip cancellation. These documents, if available, make it easier for any insurer to accept the reason for Trip Cancellation. Some of these documents can include:
- A registered doctor’s consultation notes, reports and any lab tests that confirm you are unfit for travel.
- Additional documents may be required if you’re cancelling due to illness or injury.
- A death certificate if you’re cancelling your trip due to a death in the family.
- A copy of ticket, passport, bills and invoices for bookings made etc in addition to documents proving the cancellation was necessary.
Claims for Trip Cancellation related to Travel Insurance:
- In the event of trip cancellation, the traveler should notify the travel insurance company as soon as possible and follow the claims process outlined in the policy.
- This may involve completing a claims form, providing documentation, and waiting for the claim to be reviewed and processed.
- Every Insurer defines a timeframe for filing claims, which can range from a few days to several months after the trip cancellation.
It’s important to review the policy’s claims filing requirements and timeframe to ensure compliance.
It’s important to keep all relevant documentation and receipts for the trip expenses that were prepaid. This would be your trip confirmation emails and messages from the travel provider or agency you’ve booked with. Without these documents filing a claim would be difficult as every Insurer requires proof to validate any reason for cancelling a trip.
5. Reimbursement Limits:
- Most travel insurance policies that include trip cancellation coverage will have a maximum reimbursement limit.
- This means that you’ll only be reimbursed up to a certain amount for your non-refundable travel costs.
- Each cancellation reason may have sub limits for coverage mentioned.
- The reimbursement limit can vary depending on the policy you purchase, so it’s important to read the policy carefully to understand what the limit is.
Example: An insurer can offer you a compensation of either $7500 or $5000 or none (Platinum, Gold or Silver) based on the type of plan you choose, available from the same insurer.
6. Exclusions and Limitations:
- Like all insurance policies, travel insurance policies that include trip cancellation coverage will have exclusions and limitations. For example, most policies won’t cover cancellations due to pre-existing medical conditions, and some policies may have exclusions for certain activities like extreme sports or adventure travel.
- There can also be circumstances where if a traveller cancels their trip due to fear of a potential natural disaster, this may not be a covered reason for trip cancellation if there is no declared natural disaster in the destination area and travel operations are normal.
Pre-existing Medical Conditions:
- Most policies may exclude coverage for pre-existing medical conditions.
- Common requirements can be Age of the Traveller, Medical Stability – obtaining a fitness certificate from a Doctor, no pending treatments, etc.
It’s important to understand the policy’s pre-existing condition exclusion and waiver provisions.
Trip Cancellation Coverage Limits:
- The coverage limit should be sufficient to cover any prepaid, non-refundable trip expenses such as airfare, hotel bookings, tours, and other activities that may be pre booked in advance.
It’s important to read the complete policy carefully to understand what limitations and coverage limits mentioned are.
7. Cost of Travel Insurance:
- The cost of travel insurance that includes trip cancellation coverage will depend on a number of factors, including the length and cost of your trip, your age, and any pre-existing medical conditions you may have.
Example: Many people protect themselves during a European trip by spending an insignificant amount like AED 100-150 to secure not only against cancellation but also medical expenses, loss of belongings, and delayed baggage. They don’t risk losing money and time by not having travel insurance on their all-inclusive trip to the EU.
A small investment in travel insurance can offer significant protection and peace of mind during your trip, as many unforeseen incidents and situations can be taken care of financially with coverage from a good policy.
In conclusion, trip cancellation coverage is an important feature of travel insurance that can provide financial protection if you have to cancel your trip due to a covered reason.