Credit Assess
Even the most meticulous planners can’t account for natural disasters or unexpected severe illness or death. Sometimes, things beyond your control happen and they occur right before that vacation you’ve set your heart on. Luckily, your credit card may have your back.
Trip cancellation coverage applies in the event of sickness, death or quarantine of you, a traveling companion, caregiver, business partner or immediate family member. Non-medical circumstances include a missed connecting flight due to weather, a job termination, jury duty or an employer-initiated job transfer.
“There is really not a ‘change of heart’ cancellation policy where you can cancel your trip for any reason,” says Ray Battiston, an independent travel insurance broker based in St. Davids, Ontario. That kind of policy is rare, he says, and when they are available, they’re expensive, and generally not included with a credit card’s trip cancellation insurance.
Trip cancellation insurance enables you to recover non-refundable expenses charged to your credit cards when unforeseeable events force you to cancel prepaid travel outside your province of residence. Some credit cards cover full-fare tickets only, while other cards reimburse a myriad of non-refundable trip costs, including hotel stays and car rentals.
In all cases, you must cancel your trip before the scheduled departure date. Generally, you must cancel your trip and notify the insurer within 48 hours of the event that caused the cancellation.
Maximums vary widely
It’s also important to make sure you aren’t underinsured and that you have enough insurance to cover your prepaid expenses.
For cardholders who take many family trips, National Bank Platinum MasterCard has the most generous dollar limit. The card reimburses the cardholder for up to $2,500 in non-refundable expenses, and also allows up to that same maximum for each immediate family member.
Although the ScotiaGold Passport Visa card also features a $2,500 cardholder maximum, the overall cap for all travel companions booked for the same cancelled trip is $10,000. BMO World Elite MasterCard imposes a cardholder account maximum of $5,000 per excursion.
In contrast, trip cancellation benefits under the Visa Desjardins Classic, Elegance Gold and Modulo Gold cards are subject to a $500 maximum. And, eligible trips must not exceed three days.
If you feel like your current credit card doesn’t have sufficient coverage for the trip you’re taking, Battiston recommends talking to a broker about a supplemental individual policy.
“It’s really not something you should figure out yourself,” he says. “You should talk to the agent or broker and explain, ‘this is what I’m doing, this is where I’m going and this is what I plan to do.’ A broker can help you find insurance that may cover activities your credit card will not.”
Watch out for the pre-existing conditions limitation
You can be eligible for trip cancellation insurance if you have a pre-existing condition, but that pre-existing condition needs to have long-term stability.
“If you have terminal cancer, you can’t get coverage for that, but if you have a heart condition where nothing has occurred to do with that condition in the last 90 days prior to buying the policy, you can get coverage for that,” says Battiston.
Unstable means an otherwise reimbursable trip cancellation claim can be nullified if the applicant consulted a doctor, was hospitalized or received medication or treatment before the scheduled departure date. For example, the TD First Class Travel Visa Infinite card disallows pre-existing conditions when there are visible symptoms within 90 days from when a cardholder younger than 65 charges trip costs to their credit card (180 days for those 65 and older).
Age is also a factor in determining coverage eligibility. Among the 20 cards with free trip cancellation coverage, four plans deny eligibility based on age: trip cancellation insurance under the ScotiaGold Passport Visa card excludes applicants age 65 and older, while 75 is the age cut-off for the free three-day coverage under the three Visa Desjardins products.
Complimentary travel benefits
Because trip cancellation insurance protects against risks that happen before the scheduled departure date, it is best supplemented with trip interruption coverage and flight delay insurance, which some cards include, but others do not.
“Often, trip interruption already comes with trip cancellation insurance or you can by trip interruption as a single additional policy,” says Battiston.
Trip interruption insurance covers you if you are unable to continue a trip already started due to accidental injury, sickness, severe weather conditions, government travel restrictions and similar serious events. Flight delay reimburses reasonable costs incurred due to a missed connection or departure delayed by at least four hours.
“Some credit cards also include airplane accident coverage and baggage coverage as an added benefit, but the amount of coverage per policy varies according to the insurance company you’re dealing with,” says Battiston.
