Know when to cancel


You’re booked! You’ve spent hours agonizing over the right resort or cruise and you’ve finally pulled the trigger. 

You’re under deposit, final payment is due in a couple of months and in the foreseeable future you will be on your dream vacation. Let’s talk about cancellation insurance 

Many people are cynical about insurance coverage, believing that the companies are always looking for ways to avoid paying. 

The truth is that fewer than two per cent of travel insurance claims in Canada are denied. Denial is almost exclusively based on ineligibility issues. 

Let’s cover some of those issues.

Know the Covered Risks

Talk to your travel consultant or insurance broker about exactly what is determined to be a covered risk.  Unforeseeable medical emergencies affecting yourself and your immediate family. 

Clarify what immediate family is defined as, for example. Your cousin, Frank, may be a dear and close relative to you, but his health issues may not factor into the insurer’s scope of coverage.

Understand the Terminology

Again, your travel consultant or insurance broker can cover this. “Pre-existing medical conditions are covered if they are deemed stable." What is stable? Majority requires a three-month period of no change in medication, dosage, treatment or diagnosis of new circumstances. 

This means even if your medication is discontinued (which should be a good thing), the insurer will want a clean bill of health for the three months following this event to determine that there is no relatable medical issue.

Understand What is Expected from You

All cancellation claims related to health issues require a doctor’s report.  If you wake up two days before your trip with a terrible flu, you can’t take it upon yourself to cancel the trip and expect compensation. 

That would be an undiagnosed medical condition.  You must see a health practitioner to verify that recommendation to avoid travel is clear and in written form.

Understand When to Cancel

This is so important. Many travellers believe that if they insure their trip, they can cancel at any time due to a covered risk and expect full compensation. This needs to be qualified. You are insured for the applicable penalty at time of occurrence. Let me explain.

Imagine that you have booked a cruise for March 20. You’ve paid your final balance in January. In February, your doctor notices a strange lump and orders tests. 

Your cruise has a staggered cancellation penalty policy.

  • 50 per cent non-refundable 30 days or more prior to departure
  • 100 per cent non-refundable 29 days or fewer prior to departure

If you want to wait until Feb 21 (fewer than 29 days) to see what the tests reveal, then you will only be reimbursed 50 per cent of the cruise cost. 

Cancellation insurance is a necessary evil. We buy warranties for our appliances, insure our homes, boats, cars …. It only goes to follow that our dream vacations be insured against life’s follies. 

With the help of a trusted travel consultant or insurance broker’s advice and guidance, you can avoid being in that two per cent of denied claims.


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About the Author

Joy has long been a believer in the art of travel: the belief that a vacation is something to be anticipated savored and then long remembered as one of life’s great adventures. 
Website: thejoyoftravel.ca

You can contact Joy at [email protected]

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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