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Most of us spend more time than we care to admit hanging on for our holidays. And nobody wants to cancel a break. Nobody...

But if you ever have to, holiday cancellation insurance can at least help make sure you don’t lose out on the money you’ve paid.

Most of us spend more time than we care to admit hanging on for our holidays. And nobody wants to cancel a break. Nobody...

But if you ever have to, holiday cancellation insurance can at least help make sure you don’t lose out on the money you’ve paid.

Written by
Kate Hughes
Insurance expert
Last Updated
14 DECEMBER 2022
6 min read
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What is holiday cancellation insurance?

Holiday cancellation insurance can cover you if your trip is cancelled or cut short because of a reason specified in your policy – for example, you fall ill, suffer a bereavement or have an accident and find yourself unable to travel. And while it isn’t compulsory, it’s advisable to have as part of your travel insurance. It can be a financial lifesaver if you have to call off your trip.

Customers with pre-existing medical conditions

If you have a serious health condition, your travel insurance is likely to be more expensive. Whatever happens, don’t lie to an insurance provider, because this could mean your claim is rejected. When you declare any medical conditions on our website, we’ll only show you quotes from insurance providers who will cover them, with no exclusions.

If your condition is more serious, MoneyHelper has a directory of insurance providers who may be able to provide quotes over the phone. You can call them on 0800 138 7777.

What does holiday cancellation insurance cover?

Holiday cancellation insurance policies usually cover the cost of:

  • Pre-booked flights and transfers
  • Accommodation
  • Activities and excursions you’ve already paid for or are obliged to pay for now you’ve booked.

That’s why it’s so important to get travel insurance at the same time you book your holiday. That way, you’re covered as soon as you’ve paid money towards your trip. Just watch out in case there’s an upper limit on how much your insurance provider will pay out.

When can I make a cancellation claim on my travel insurance? 

To qualify for a travel cancellation insurance pay-out, the circumstances must be ‘unforeseen’ or out of your control. This usually means events such as:

  • Flood, fire or burglary at home
  • Accident or illness
  • Loss of a loved one
  • Jury duty
  • Redundancy
  • Safety risks at your destination.

You may also be covered if you or someone you’re travelling with becomes pregnant after you bought the policy, or a doctor advises against travel because of pregnancy complications. If you’re in the Armed Forces, you may be covered if you’re ordered to return to duty before your trip.

Most travel insurance policies include cancellation cover as standard. But terms and cover levels vary between policies and insurance providers. Check your policy wording carefully so you know what’s covered.

Don’t forget you’ll also need to factor in any excess you’ll have to pay towards a claim. This is usually deducted from any pay-out you receive.

Plus, of course, if you can cancel your trip without incurring costs, you can’t claim on your insurance as you won’t be out of pocket.

What won’t holiday cancellation insurance cover?

Holiday cancellation insurance won’t cover you if you simply decide you don’t want to go.

If you change your mind about going on holiday, it could well be cheaper to find someone to take your place than to cancel, even with the likely admin charges. Contact the travel company directly if someone else can step into your place, and they should be able to transfer the holiday at a reasonable cost (unless there’s a ‘non-transferrable’ clause in the small print of your policy).

You also won’t be covered if you cancel because of: 

  • Pre-existing medical conditions you didn’t declare, or that your insurance provider won’t cover. If the people you’re travelling with are named on your policy, you’ll need to declare their pre-existing medical conditions too. 
  • Circumstances you knew about before you bought the policy. For example, an airline strike or close relative’s illness.
  • Injuries resulting from the use of alcohol or drugs.
  • Family or relationship breakups.
  • Airport taxes and air passenger duty aren’t usually covered either. 

To be crystal clear about what is and isn’t covered by your individual policy, always check with your insurance provider.

How much protection will cancellation cover give me?

The level of cover you’ll receive will depend on your policy. Cover limits vary among insurance providers, and how much you’ll need will depend on how much you paid for your holiday. When you get a quote with Comparethemarket, you can compare cancellation cover limits ranging from £750 to £7,500.

Always choose the right level of cover. Otherwise you could end up paying for insurance you don’t need or find you don’t have enough cover if you need to claim.

What if the airline cancels my travel plans?

If your flight is cancelled or delayed by more than three hours, the airline should pay you compensation. Check your airline’s website to find out how to claim.

Depending on where you’re flying to and whether the delay was the airline’s fault, you could be owed up to £520.

If your flight is cancelled and the airline doesn’t rebook you on an alternative flight within 24 hours, your insurance may cover you.

See more about whether travel insurance covers cancelled flights. You can also see what to do if your holiday company goes bust.

How much notice do I need to give before cancelling my holiday and claiming?

You can cancel any time before your trip begins. You’ll find details of any fees in your booking’s terms and conditions. You may find these increase the closer you get to your departure date.

What’s the difference between cancellation cover and curtailment cover?

Cancellation cover applies when you haven’t yet started your trip. But curtailment cover is for when you’ve started your holiday and need to cut it short. You can usually claim for the same reasons as cancellation cover. Watch out, though, because curtailment cover only offers compensation for the number of days you haven’t taken, not your entire holiday.

How do I claim for holiday cancellation?  

Get in touch with your insurance provider as soon as you know you need to cancel. They can guide you through the claims process. You can also check your policy documents for advice on how to claim.

To make your claim, you’ll need to provide relevant evidence. This could include:

  • Invoices
  • Unused tickets and booking receipts
  • Medical documents
  •  A death certificate
  • Any other documents your insurance provider might require.

For peace of mind, always keep hold of all your travel documents, receipts and bills until your holiday is complete, just in case... And if you find you do need to make a claim, don’t hang around. If you don’t promptly tell your holiday company you need to cancel, you won’t be covered for any extra resulting costs.

The holiday company or airline should only charge you for the amount they lose and should try to sell the holiday to someone else. If you think they’re charging too much, you’re perfectly entitled to ask how they calculated the cancellation fee.

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