Travel Insurance Cancellation Cover

Not all cancellations, delays, or missed travel plans are covered by travel insurance, contrary to popular belief. We help explain the misunderstandings around travel insurance cancellation cover, so that you can head on holiday knowing when you’re covered, and importantly, when you’re not.

What is Cancellation cover?

If you have a comprehensive travel insurance policy, it will include cancellation cover. Cancellation cover varies across insurers, but it generally means you can be reimbursed for the lost deposits and cancellation fees for pre-paid holiday arrangements cancelled due to unforeseen circumstances, which are not expected, intended, or within your control.

Different sections of your travel insurance policy relate to different times and parts of your trip. Generally, anything that happens before travelling falls under ‘Cancellation’ and anything that happens once you have already started your journey will typically fall under ‘Alternative Transport Expenses’, ‘Travel Delay Expenses’ or ‘Disruption of Journey’ benefits. They are all, in essence, just different remedies to unforeseen circumstances which might cause cancellations during your trip, or indeed, cancellation of your whole trip altogether.

Compare Cancellation Coverage

The level of cancellationc cover you will have depends on which policy you choose. Most insurers offer different cancellation cover levels and often at very different price points. We’ve compared the cheapest comprehensive-style policy offered by each insurer to give you a rough idea. To compare coverage and prices for your trip, use our quote function above.

What are “Unforeseen Circumstances”?

…and when are you covered for travel delays, alternative transport and cancellation?

Provided that you purchased your policy before you became aware of the circumstances (or they were published in the media), commonly covered scenarios include:

Bad weather or natural disasters

If your transport, like a flight or cruise is cancelled due to severe weather or a natural disaster, such as a volcanic eruption, tornado, or bushfire, you may be able to claim for transport, accommodation and other pre-paid expenses. Many insurers also offer cancellation cover if your home in Australia is affected by a natural disaster, and you need to defend it or if it is rendered uninhabitable by a flood, fire, or explosion.

Sickness or injury

If you become injured or ill and wind up being unfit to travel, or if you have to return home once a medical practitioner notifies the insurer that you are unfit to continue with your trip you may be covered for the cancellation costs for the remainder of your trip. You will need this judgement from the medical practitioner in writing and generally you will not be covered if the acute illness or injury is as a result of an undeclared pre-existing medical condition.

Sickness or injury of a family member

If you need to return home or cancel a trip because a family member is unwell or there has been a death of a close family member you may be covered. This is subject to limitations - for example, most insurers do not cover if the relative is over 80-85, if they were hospitalised due to a pre-existing medical condition, or the relative resides outside Australia or New Zealand. Check out our guide on family emergencies for more.

Strikes, civil unrest or riots

If a strike, civil unrest or riot directly affects your flights or accommodation the cancellation costs may be covered. If the unrest or rioting hasn’t directly affected your travel arrangements, cancelling your trip may be considered by your insurer as a ‘change of mind’ scenario, which is generally not covered or claimable.

Accident en route

If you missed your flight/booked transport because of a motor vehicle accident, railway accident or marine accident en route to the booked transport and you can prove that there was no other way for you to get to your transport carrier your cancellation costs may be covered. You will generally need a letter from an authority, such as the police or transport provider to prove the accident happened, so be sure to secure this if you find yourself in this position.

Theft of passports, travel documents or credit cards

If your passport or documents are stolen, travel insurance will reimburse you for your expenses incurred when replacing your items, as well as cancellation fees or lost deposits if you are unable to continue your journey due to theft of your passport.

Getting to special events

If your flight or other transport has been cancelled or delayed, and you need to reach a special event which the date of cannot be changed, such as a sporting event, wedding, or funeral, many insurers cover your alternative transport expenses to get there on time - even if the reason your flight or transport was cancelled was the airline’s fault. Different insurers consider different things a ‘special event’, so check your policy disclosure statement and make sure it does what you need it to.

Delays or disruption of journey

If you experience a flight delay (typically of more than six hours), and your airline doesn’t look after you, your travel cover can provide accommodation and food benefits of around $200-$250 per adult for each day the disruption continues. If you miss a connecting flight due to the first airline’s fault, some insurers also cover the cost of getting you on a new flight - provided that you’ve left at least 3-5 hours for connections. Check your insurer’s policy documents to see if they offer this.

Cancellation of annual leave - if you’re in the emergency services

Many insurers cover full-time defence force, police and other emergency service personnel coverage if their annual leave is revoked. Again, each insurer is different on this, so be sure to check your policy works for your circumstances.

Cancellations That Are Not Covered

Of course, not every situation can be covered and this is when the confusion starts.

Cancellations where the airline is responsible

If your flight was cancelled due to a mechanical fault, overbooking, maintenance, repairs, rescheduling, service faults, a pilot sleeping in, or the airline closing down then you are generally not covered. It is the airline’s responsibility to compensate, reimburse, or find an alternative flight for the traveller – not the insurer.

The exception is where insurers offer alternative transport expenses or disruption of journey benefits, which help you get to a special event, like a wedding, or cover meals and accommodation, regardless of whether the airline was at fault.

Missing flights where you’re responsible

Slept in? Turned up to check-in too late? Delays caused by your negligence are not covered under travel insurance cancellation cover. Insurers will ask that you left ‘sufficient’ time to get to the airport. This includes missed connecting flights where most insurers have a minimum layover time in order to be covered.

Cancellations due to undeclared pre-existing conditions

If your trip is cancelled because of a pre-existing medical condition that you didn’t declare to your travel insurer, or a family emergency where the cause is a pre-existing condition of a family member, you usually will not be covered.

Change of mind

If you simply decide you don’t want to go on holiday anymore, travel insurance cancellation cover won’t cover you.

Cancellation of annual leave

Unless you’re in the defence force, police, or other emergency services, you’re generally not covered for your cancellation if you cannot travel due to your employer revoking your annual leave.

Visa refusals or not having the appropriate documents

If your destination visa is denied and you’ve already paid for flights and accommodation, travel insurance cannot help, as it’s up to the traveller to verify that their visa requirements have been met. Likewise, if you are turned away from the foreign country because you weren’t aware of a visa requirement, most insurers consider this to be a general exclusion and cancellation cover won’t kick in.

In some cases, the airline might refund your tickets as they’re not allowed to fly passengers to a country without a visa.

Exams

If you or another member of your group is suddenly required to sit an exam and cannot travel then most travel insurance will not cover your travel cancellation costs.

Underbooked tour

If your tour is cancelled due to underbooking, this is generally not a covered situation. A travel insurance policy is a legal document and yet so many travellers chose not to read the Product Disclosure Statement which explains in detail all the policy benefits. Each insurer has a list of inclusions and exclusions, to avoid any doubt, check this before you travel.

Insolvency of a travel provider

If your travel agent, tour provider or airline becomes insolvent, very few insurers cover this. Check out our guide to learn more about who covers different travel company insolvency situations.

Claiming for Travel Cancellations

Claiming for trip cancellations doesn’t have to be difficult. Check your insurer’s product disclosure statement, and read through the sections on cancellations, alternative transport expenses, travel delays, as well as the general exclusions so you’re aware of what you can and can’t claim for. Find your insurer’s claims web page, fill out the form and upload your documents. You’ll generally need copies of your itineraries, refund advice, proof of payments and proof of the reason for your trip cancellation - this will vary depending on the reason you need to cancel your holiday.

Visit our guide more on claiming for travel cancellations and delays.