Credit card trip cancellation insurance: how it works, what's available

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

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.

Canadian cards that offer trip cancellation insurance
 Card name
APR/Annual fee
Trip cancellation coverage
Trip interruption coverage
Flight delay coverage
HSBC Premier World MasterCard
12.9%/
$0

$2,000 for primary cardholder, $2,000 per additional insured person* N/A $2,000 for primary cardholder, $2,000 per insured person
Visa Desjardins Classic
12.9%/
$30

$500 maximum coverage for primary cardholder and all insured persons $1,000 maximum coverage for primary cardholder and all insured persons N/A
Visa Desjardins Elegance Gold  (3 day travel only)
19.9%/
$30

$500 maximum coverage for primary cardholder and all insured persons
 $1,000 maximum coverage for primary cardholder and all insured persons N/A
Visa Desjardins Modulo Gold   (3 day travel only)
10.9%/
$50

$500 maximum coverage for primary cardholder and all insured persons
$1,000 maximum coverage for primary cardholder and all insured persons
 N/A
RBC U.S. Dollar Visa Gold
19.99%/
$65


$2,500 for primary cardholder, $2,500 for each additional cardholder** 
$2,500 maximum coverage for each cardholder OR $2,500 maximum per trip for cardholder's spouse and dependent children Your one-way economy airfare via the most cost-effective route to your next destination
Visa Desjardins Odyssey Gold
19.9%/
$110

$2,000 for primary cardholder, $2,000 per insured person
Unlimited coverage in case of trip interruption after departure $2,000 for primary cardholder, $2,000 per insured person
ScotiaGold Passport Visa Card
19.99%/
$110

$2,500 for primary cardholder, $10,000 per trip $2,500 for primary cardholder, $10,000 per trip  N/A
RBC Rewards Visa Preferred
19.99%/
$110

$2,500 for primary cardholder, $2,500 combined for cardholder's  immediate family $2,500 for each additional cardholder
$2,500 for each covered person                     
N/A
Aspire Travel World MasterCard
19.8%/
$150

$1,000 per person to a maximum of $5,000 per trip $5,000 per person to a maximum of $25,000 per trip $250 per day, up to $1,000 per trip, for delays of at least 4 hour.
TD First Class Travel Visa Infinite Card
19.99%/
$120

$1,500 per person to a maximum of $5,000 per trip $5,000 per person to a maximum of $25,000 per trip N/A
CIBC Aventura World MasterCard
19.99%/
$120

$1,000 for primary cardholder, $5,000 per trip $2,000 for primary cardholder, plus $2,000 per insured person Maximum of $500, if the delay is at least 4 hours. Up to $100 for ground transportation, up to $100 for entertainment, $500 for essential purchases
National Bank Platinum MasterCard
19.99%/
$125

$2,500 for primary cardholder, $2,500 per insured person $5,000 for primary cardholder, $5,000 per insured person Up to $500 per insured person, if the delay is at least 4 hours
BMO World Elite MasterCard
19.99%/
$150

$2,500 for primary cardholder, $5,000 per account $2,000 for primary cardholder, plus $2,000 per insured person Up to $500 per account for delays of at least 6 hours
Visa Desjardins Platinum
9.9%/
$169

$2,500 for primary cardholder, plus $2,500 per insured person Unlimited coverage in case of trip interruption after departure  N/A
AMEX Platinum Charge Card $699

$1,500 per insured person, up to a maximum of $3,000 $1,500 per insured person, up to a maximum of $6,000 Up to $1,000
AMEX AeroplanPlus Platinum Charge  Card
 $499


$1,500 per insured person, up to a maximum of $3,000 $1,500 per insured person, up to a maximum of $6,000 Up to $1,000

Source: CreditCards.ca research. All terms and conditions are subject to change by issuer. Data in the chart is current as of July 26, 2016.

*"Insured person" is defined as the primary cardholder, spouse and children.

**RBC cards enable the primary cardholder to include secondary cardholders under the same account; spouses and children will not be covered for trip cancellation coverage unless they sign up as secondary cardholders.

See related: 7 secrets about credit card travel accident insurance, Credit card extended warranty, insurance perks can save you big, What to look for in a credit card travel health insurance plan

Published July 27, 2016

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