What is trip cancellation and interruption insurance?

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Published on November 07, 2024 | 4 min read

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Key takeaways

Trip cancellation and interruption insurance reimburses travelers for prepaid expenses when their trip is canceled or interrupted due to circumstances beyond their control.
This coverage only applies in specific situations such as illness, injury, natural disasters or financial defaults by travel providers.
Optional coverage options, such as “cancel for any reason” or “interrupt for any reason” insurance, can provide more flexible coverage but come with a higher cost.
Many top travel credit cards include trip cancellation and interruption insurance as a cardholder perk.

Whether you get travel insurance through a policy you purchase or from a travel credit card, you’ve probably noticed that most plans include a trip cancellation and interruption insurance benefit.

This perk is one of the most common travel insurance benefits and also one of the most valuable. After all, travelers who have this protection can often get reimbursed when their trip is canceled or interrupted for certain reasons beyond their control, such as an unexpected illness, an injury or a flight cancellation.

However, before you invest in trip cancellation coverage or trip interruption insurance, you should know how these coverages actually work and when they apply. So, what is trip interruption insurance, and how does trip cancellation protection work? Let’s dive into these insurance products to find out what they’re all about.

What is trip cancellation and interruption insurance?

While trip cancellation coverage and trip interruption coverage are often grouped together, these two coverages actually apply in different situations. For instance, trip cancellation coverage reimburses travelers when their trip is canceled altogether for eligible reasons, whereas trip interruption coverage provides reimbursement for some prepaid travel expenses when a trip is interrupted after it has already started.

Note that, with both types of insurance protection, reimbursement only applies in scenarios that are beyond a traveler’s control. This means that you can’t just cancel your trip for any reason and get your money back, nor can you decide to leave your trip early and successfully file for reimbursement.

Also, note that you may be able to purchase trip cancellation and interruption insurance separately or it may be a part of the included benefits within a travel insurance plan. You may also be able to get this coverage automatically from certain travel credit cards.

What does trip cancellation insurance cover and not cover?

Trip cancellation insurance is meant to reimburse you for prepaid travel expenses you already booked when your trip is canceled for reasons beyond your control. Some common scenarios where trip cancellation coverage does and does not apply include (but are not limited to) the following.

What trip cancellation insurance covers	What trip cancellation insurance does not cover
Injury, illness or death of a traveler or close family member	Travel interruptions caused by acts of war
Financial default of an airline or travel provider	Travel interruptions caused by civil unrest
Inclement weather that leads to trip cancellation	Government-issued travel bulletins or warnings
Work issues that cause you to miss a trip	Natural disasters
Being called into active duty military service	Nuclear reaction, radiation or radioactive contamination
Acts of terrorism in the travel destination	Terrorist events

Trip cancellation vs. trip interruption

Trip interruption insurance applies when a trip is forced to an early end for an eligible reason. Common situations covered by a trip interruption benefit include the following:

Injury, illness or death of a traveler or close family member during a trip
Diagnosis of COVID-19 or required quarantine during a trip
Destination made uninhabitable due to severe weather
Terrorist activity taking place in your travel destination
Lost passport or travel documents during a trip
Travel strikes that impact your trip

It’s important to note that it’s possible to purchase trip cancellation and interruption coverage that applies in a broader range of scenarios. For example, you can purchase “cancel for any reason” (CFAR) insurance that lets you cancel your trip for any reason at all and get part of your prepaid travel expenses back. Likewise, an “interrupt for any reason” (IFAR) insurance policy lets you end your trip for any reason and get part of your prepaid travel expenses back.

Both types of optional coverage will increase your travel insurance policy’s cost. However, CFAR and IFAR insurance can provide peace of mind if you’re unsure your trip will happen and you want a way to get at least some of your prepaid costs toward hotels and airfare back if you decide to stay home.

Is trip cancellation insurance worth it?

Trip cancellation insurance can be worth it for those who travel frequently or are planning a big vacation and don’t want to risk losing money if something takes a turn for the worse. However, only you can decide if this type of protection will be worth it for your travels.

Pros of cancellation insurance

Trip insurance typically reimburses up to 100 percent of your trip expenses, although coverage details vary by policy, so be sure to review the fine print beforehand.
You can be reimbursed for airline tickets, hotel reservations, tours, excursions and more under these types of policies.

Cons of cancellation insurance

The average cost of travel cancellation insurance is about 4 to 6 percent of your total trip cost, according to Forbes, adding a substantial fee to a potentially already costly trip.
The number of people you insure for your trip and their ages can significantly increase the cost of the insurance premium.

Best credit cards for trip cancellation/interruption insurance

Several travel credit cards with travel insurance offer trip cancellation and interruption insurance automatically for cardholders. See our top choices below:

Chase Sapphire Preferred® Card

The Chase Sapphire Preferred® Card comes with trip cancellation and interruption coverage of up to $10,000 per person and up to $20,000 per trip. This insurance covers pre-paid, non-refundable travel expenses (like passenger fares, hotels and tours) in the event a covered situation (such as sickness or severe weather) occurs.

Other travel insurance perks include primary rental car coverage, baggage delay insurance, trip delay reimbursement and travel and emergency assistance services. A $95 annual fee applies for this card.

Chase Sapphire Reserve®

The Chase Sapphire Reserve® also comes with trip cancellation and interruption coverage of up to $10,000 per person and up to $20,000 per trip. Like the Chase Sapphire Preferred, this insurance applies to covered situations and will reimburse you for eligible, pre-paid and non-refundable travel expenses.

Other notable travel benefits include primary rental car coverage, lost luggage reimbursement, trip delay reimbursement and emergency evacuation and transportation coverage. A $550 annual fee applies for this card.

The Platinum Card® from American Express

The Platinum Card® from American Express comes with trip cancellation and interruption insurance of up to $10,000 per trip and up to $20,000 per eligible card every 12 months. Insurance applies to covered reasons (additional terms and conditions apply).

Other travel protections for cardholders include car rental loss and damage insurance, emergency assistance services and trip delay insurance. A $695 annual fee applies for this card.

The World of Hyatt Credit Card

The World of Hyatt Credit Card*, which is issued by Chase, comes with several travel protections, including trip cancellation and interruption coverage (for eligible events and expenses) of up to $5,000 per person and up to $10,000 per trip. Cardholders will also get baggage delay insurance, lost luggage reimbursement, secondary auto rental coverage and Visa Signature concierge services. A $95 annual fee applies for this card.

The bottom line

Trip cancellation and interruption insurance can help you get some of your money back when your trip is canceled or interrupted for reasons beyond your control. However, you’ll want to read over the policies you’re considering so you know what is and isn’t covered, as well as how much coverage you’ll get per traveler and per trip. Also, note that many top travel credit cards offer this benefit for free, but you’ll have to pay for your trip with your eligible credit card for travel insurance benefits to apply.

At the end of the day, having coverage for trip cancellations and interruptions can be worth it regardless of whether you buy a travel insurance plan or book a trip with your favorite credit card. While travel can be stressful and expensive, having travel insurance can help.

*The information about The World of Hyatt Credit Card has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.