60-second summary
Need the facts on holiday cancellation insurance in a hurry? Here’s our speedy summary:
Some level of holiday cancellation insurance usually comes as standard in a travel insurance policy.
Travel cancellation cover provides compensation for holiday costs if you need to cancel your trip due to circumstances beyond your control.
Policies usually cover flights, accommodation and any excursions or activities you’ve booked and paid for.
Holiday cancellation insurance won’t cover you if you simply decide not to travel.
When you compare holiday cancellation cover with Compare the Market, you can choose cancellation cover from £750 up to £6,000.
What is holiday cancellation insurance?
Holiday cancellation insurance can cover you if your trip is cancelled or cut short for a reason specified in your policy. For example, you might fall ill, suffer a bereavement or have an accident and find yourself unable to travel.
While it isn’t compulsory, it’s advisable to have cover as part of your travel insurance.
Most travel insurance policies include a level of cancellation cover as standard. But it’s worth checking the terms and limits.
What does holiday cancellation insurance cover?
Typically, holiday cancellation insurance covers the cost of:
Pre-booked flights and transfers
Accommodation
Activities and excursions you’ve already paid for or are obliged to pay for.
It's important to get travel insurance as soon as you book your trip. That way, you’re covered from day one. Just be aware of any upper limits on payouts.
What won't holiday cancellation insurance cover?
Holiday cancellation insurance won’t cover you if you simply decide not to go.
If you change your mind about going on holiday, it could be cheaper to find someone to take your place than to cancel, even with the potential admin charges.
If someone else can go in your place, contact the travel company. It should be able to transfer the holiday at a reasonable cost, unless there’s a ‘non-transferable’ clause in your booking.
You also won’t generally be covered if you cancel because of:
Pre-existing medical conditions you didn’t declare – or those not covered by your travel insurance. 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 a relative’s illness.
Injuries resulting from the use of alcohol or drugs.
Family or relationship break-ups.
Airport taxes and air passenger duty aren’t usually covered, either.
Holiday cancellation insurance may vary from policy to policy and provider to provider. For example, some providers offer different tiers of cover, and what comes as standard in their top-tier policy may be charged as an add-on to a basic policy. So always check if you’re not sure what you are or aren’t covered for.
Customers with pre-existing medical conditions
If you have a serious health condition, your travel insurance is likely to be more expensive. Whatever happens, tell your insurance provider the truth. If you give false information or miss something out, your claim could be rejected.
When you declare any medical conditions on our website, we’ll only show you quotes from insurance providers that 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.
When can I make a cancellation claim on my travel insurance?
To qualify for a travel cancellation insurance payout, the circumstances must be ‘unforeseen’ or out of your control. This usually means events such as:
A flood, fire or burglary at your 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.
It’s worth factoring in any excess you’ll have to pay towards a claim to see whether it makes sense to claim.
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 Compare the Market, you can compare cancellation cover limits ranging from £750 to £6,000.
Consider how much cover you really need. Too much, and you’ll pay more for your holiday cancellation insurance than you have to. Too little, and you could end up out of pocket if you have 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 covered by UK law, you have the right to a refund or a replacement flight. Your airline must offer you an alternative flight, and it’s up to you whether you accept the next available option or choose to fly at a later date.
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 should notify your insurance provider as soon as possible after you decide to cancel a trip and claim on your holiday cancellation insurance. This minimises any potential fees or losses.
You’ll find details of any fees in your holiday booking 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?
Holiday cancellation cover applies if you haven’t started your trip yet. Curtailment cover, on the other hand, is for when you’ve started your holiday and need to cut it short. You can usually claim for the same reasons on both policies. For example, you should be able to claim on a curtailment policy if a close relative dies and you need to cut your holiday short.
However, curtailment cover only offers compensation for the number of days you haven’t taken, not your entire holiday.
How do I claim on my holiday cancellation insurance?
If you want to claim on your holiday cancellation insurance, let your insurance provider know as soon as you decide to cancel. They’ll guide you through the claims process, which will also be detailed in your policy.
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, keep hold of any travel documents, receipts and bills until the process of claiming has finished.
Typically, the holiday company or airline should only charge you for the amount it loses. It'll usually try to sell the holiday to someone else, so it’s best to cancel as early as possible.
If you think your travel company or airline is charging too much, ask how it calculated the cancellation fee.
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With more than eight years’ experience in writing and sub-editing content, Karen started her career in fashion before making the move to insurance. She now specialises in producing clear, engaging content that helps people make better financial decisions.
Karen’s areas of expertise include insurance products, such as car insurance, travel insurance and life insurance, as well as utilities such as energy comparison.
Stephen Maunder is an experienced personal finance editor, having spent more than a decade working for consumer print and online titles. He won several industry awards for his personal finance features at Which?, before becoming Deputy Editor at Compare the Market.
Our content is written by a Compare the Market expert, backed by data and enhanced by technology. Find out how we ensure accuracy and quality in our Editorial Guidelines.
