Meaning of 'Covered Reasons' in Trip Cancellation Coverage

What Does 'Covered Reason' Mean in Travel Insurance?

A 'covered reason' is an emergency that your travel insurance policy covers for trip cancellation or disruption. This list of reasons is clearly specified in every policy, so the insured understands what is covered and what isn't.

Trip cancellation benefit under travel insurance covers unfortunate events that are beyond your control, like health issues, the death of a close one, loss of a passport, and so on. If your trip is cancelled or cut short due to one of these reasons, you get compensated for the non-refundable travel bookings you lost.

Common Covered Reasons for Cancelling Trips

While each company's policy may differ, let's review the most common covered reasons insurers approve of:

1. Natural Calamities

   If your destination becomes inaccessible or unsafe due to earthquakes, floods, storms, or other natural disasters, your insurer would compensate you for prepaid bookings, helping reduce your financial loss. These bookings usually include non-refundable hotel, flight and tour-bookings.

2. Medical Emergencies

   If you or a close family member faces sudden illness, injury, hospitalisation, or even death, it is usually treated as a covered reason. However, you will need to provide a doctor's recommendation to cancel your trip for illness or injury. If it's a family member, you must provide the proof of relationship too.

3. Terrorism, Strikes, and Other Man-Made Calamities

   Most insurers consider man-made disruptions, such as terrorism, riots, widespread strikes, or burglary at your hotel, a valid reason for trip cancellation and disruption.

4. Loss of Employment

   Losing your job shortly before departure is beyond your control and may affect your ability to travel. Most policies classify job loss as a covered reason. Some policies also cover you if trip was cancelled because of an abrupt job transfer.

5. Passport Loss

   Travel is impossible without valid documents, and losing your passport is often considered a valid reason (such as theft, burglary or fire) for cancellation under travel insurance policies. In such cases, insurance can cover the cost of non-refundable travel arrangements.

6. Government Advisory or Quarantine

   When official advisories or quarantine rules prevent travel, your insurer may reimburse prepaid expenses such as flights and accommodations, reducing the financial impact of unforeseen disruptions. However, this advisory should be issued after policy purchase and not for an advisory which was issued in advance.

7. Legal Proceedings

   Unexpected legal commitments, such as appearing in court or handling urgent legal matters, can prevent you from travelling. Many travel insurance plans reimburse non-refundable expenses in such cases.

Documents Required to File a Trip Cancellation or Disruption Claim

To ensure your trip cancellation claim is approved, you must assure the insurer that your reason for trip cancellation or disruption is genuine. The following documents are essential for all types of claims:

• Your photo ID
• A travel insurance claim form
• A declaration about the circumstances leading to the trip cancellation
• Original flight ticket and boarding pass
• Invoices for non-refundable hotel bookings or payments for other activities. If any cancellation charges are applied, provide a letter from the hotel/airline
• A letter from your airline stating the reason for the flight cancellation and the duration
• A cancelled cheque

Additionally, the following documents are required for each covered reason:

Reasons Not Covered by Trip Cancellation Coverage

While insurers offer protection against numerous unforeseen events, they exclude certain ones. Here are some standard examples of these exclusions:

• Specified medical issues: Medical emergencies resulting from pre-existing illnesses, pregnancy, childbirth, or mental health conditions affecting you, your immediate family, or your travel companion are typically not covered. You can cover these by purchasing optionals or add-ons at an additional cost.
• Pre-existing conflicts: Any riots, strikes, labour disputes, or similar events that were already underway or officially announced before you purchased insurance are not eligible for trip cancellation claims.
• Predictable events: Travel insurance won't cover events that could have been reasonably predicted or are highly likely to happen based on experience or planning.
• General exclusions: The overall exclusions of your travel insurance policy also apply to trip cancellation. These include self-inflicted injuries, travelling against a doctor's advice, non-urgent medical treatments, intentional acts, and criminal activities.