Since many were abroad when the travel advisory was issued, I want to share more about trip interruption insurance, which everyone could have gotten for free with a good card… and gives $1,500 to buy a ticket home in those situations (and more). As we’ve often said, the great travel insurance coverage you get for free is one of the best reasons to invest time and learn about the world of travel rewards and credit cards specifically, also known as “travel hacking.”
I won’t repeat everything about credit cards being amazing to get hundreds of dollars in free travel each time you get one. That’s by far their best benefit. (Sign up for our new free travel rewards newsletter to learn more as we launch our free course.)
But in addition to the thousands of dollars in free travel I get each year from those signup bonuses, I also save hundreds of dollars on my travel thanks to insurance. Mostly with medical insurance, car rental insurance, and flight delay insurance, which I use regularly.
We say it often because it’s true and so important: not paying for a trip with a good travel credit card is simply one of the biggest travel mistakes you can make. There are some for every income level.
So now let’s talk about trip interruption insurance specifically, since many could have used it as we speak (and could use it in the future, even outside of pandemics).
Trip Interruption Insurance Vs. Trip Cancelation Insurance
Important clarification: in this post, we are not talking about trip cancelation insurance. That is a different one. We will have a detailed post about that one soon, including my own claim experience.
- Trip interruption insurance is for during your trip
- Trip cancelation insurance is for before your trip
It’s a pretty simple difference, but insurance is complicated enough, so let’s focus on one at a time.
And trip interruption is the most relevant since many are stuck abroad (or were this week).
As we told you, if you are not on a trip currently, you should wait:
- if you are scheduled to leave in the next weeks, don’t cancel until it is in the next 3 days
- if you are scheduled to leave further out, don’t cancel now unless you like losing money
In the first case, you shouldn’t be canceling now, so others who need it most can get through to customer service (you can share our infographic so that many who simply don’t realize that this is harmful can know). I will contact Delta on Twitter today myself since my flight to Sri Lanka was scheduled for the 24th.
In the second case, you shouldn’t be canceling now because it is simply way too early to know how things will be in the future, but more importantly, there’s no benefit to canceling early. In fact, it’s quite the contrary: the longer you wait, the more likely it is that the refund/change policies get more flexible and give you back more of your money, as explained in 4 reasons to wait before canceling a trip. Don’t miss the list of airline change policies this week.
Trip Interruption Insurance Basics
Trip interruption insurance allows you to be reimbursed for certain expenses when certain unexpected reasons cause an interruption during your trip, as the name suggests.
It is very often paired with trip cancelation insurance. But not always. They are very similar, but as mentioned, trip interruption insurance is only for situations that happen during a trip (that is the main difference between this and trip cancelation insurance).
Not all cards have all types of coverage since there are a dozen different types. See the last section for a reminder of the different types of travel insurance and credit card insurance.
And not all insurance policies are the same, even for the same “type” of insurance. In other words, the Scotiabank Gold American Express Card’s trip interruption coverage is not the same as the American Express Gold Rewards Card’s trip interruption coverage.
However, what is constant is that you need to have paid for your trip with the card to be covered, as is the case for all types of travel insurance except medical insurance (not necessary for that one—one of the many myths about credit cards).
You get X amount (let’s say $1,500, for example) of coverage per person, and often also Y amount (let’s say $6,000) of coverage in total for the incident since most cards will cover your immediate family as well.
If you have trip interruption insurance from a standalone policy instead of from a credit card, the rules themselves are pretty similar.
- insurance for during your trip
- for unexpected reasons
- in certain situations
So, let’s get into it.
Two Main Aspects Of Trip Interruption Insurance
There are two main aspects to understand with interruption insurance:
- the types of reimbursements you can get
- the interruption causes you are covered for
There are multiple scenarios for each of those two main variables, so we’ll cover the details, and give you concrete examples.
But only these types of reimbursements are possible, and only these reasons are covered. The small print details depend on each card.
First, here are the 3 types of reimbursements trip interruption insurance will generally give you:
- an amount to cover a flight home (or to your next destination)
- an amount to refund you for unused prepaid travel expenses
- a daily amount to cover out-of-pocket expenses during an interruption
Second, here are the 7 general interruption reasons generally covered:
- a travel advisory is issued by the government
- a delay***
- a medical emergency
- an employment-related situation
- a quarantine
- a situation with your residence/business
*** trip interruption insurance often comes with trip delay insurance, which is absolutely not the same thing as flight delay insurance. Trip delay is included in the same policy as trip interruption, while flight delay is completely separate and unrelated. I’ll get back to this quickly, but I wanted to clarify this immediately since flight delay insurance is one of the most widely-used and one of the most useful coverages there are. We’re not talking about that one.
Examples Of Each Of The 3 Reimbursement Types
Let’s first look at each of the 3 types of reimbursements that trip interruption insurance gives you.
To illustrate and keep it simple, I’ll use last week’s example with the travel advisory issued by the government in all 3 cases, and I’ll detail the 7 other covered reasons after.
1. An amount to cover a flight home (or to your next destination)
In short, your trip interruption insurance usually covers the cost of a one-way flight to get back home once an advisory is issued. This is often capped at $1,500 per person, and there is often a cap for the total claim if you aren’t traveling solo, as mentioned.
So as we said in our previous post about the coronavirus travel advisory, even though your first step if you are abroad now should be to call your airline (since they are exceptionally offering a lot of flexibility), you can contact your insurer as well so they can authorize you to buy a flight.
This is one of the only types of travel insurance I haven’t had the chance to experiment with myself, but if it is like it was when I used trip cancelation insurance, it should be a breeze to deal with your card’s insurer.
In normal times, outside of the coronavirus pandemic, this insurance is even more useful. That’s because airlines won’t be as flexible if the Canadian government decides to issue a travel advisory for a particular destination.
They might not budge at all on change fees, and it’s quite logical since the airlines don’t make the travel advisories, and often the Canadian government might be overly alarmist and be the only government to issue an advisory for a specific country (it often happens). That’s not the airline’s problem.
In all cases, having trip interruption insurance means you are covered to buy a flight home and won’t have to pay for it yourself if you decide to return to Canada.
The other aspect is the amount to pay for a flight to your next destination, instead of a flight home.
It is extremely useful for each and every trip, for that “trip delay” reason I mentioned. See below.
But in the case of the other interruptions like the travel advisory, it applies when you’re visiting many countries, and the government advisory is only for some countries like usual (not a global advisory like the one for coronavirus).
So for example, if you had left earlier before all of this escalated, and you were traveling to both Italy and Croatia, you could have been in Northern Italy when the first advisory was issued (it was not global, and included only Italy and 3 other countries—not Croatia).
With the advisory issued for Italy, you would have been covered to get a refund for a flight to Croatia instead of a flight home, if you would have preferred to continue your trip by simply leaving Italy early.
2. An amount to refund you for unused prepaid travel expenses
This one is very simple. If you had booked hotels or other travel expenses that weren’t refundable, since your trip was interrupted, you are eligible for reimbursement for everything that was unused.
Please note that this does not include the refund of your original return flight since this coverage always comes with the one that allows you to book a replacement flight. That’s logical since even though it’s true that your original return flight will be unused, it’s already compensated by the fact that you get an alternative return flight, so it’s not a cost that you “lose.”
On some policies, there is a specific requirement that for the travel expenses to be eligible for reimbursement, they have to have been purchased before your departure, so double-check.
3. A daily amount to cover out-of-pocket expenses during an interruption
This one is the least-known of the three, but it is very interesting. You are allowed a daily amount (often $100) per person to cover your meals, hotels, transportation, and calls if your trip is interrupted.
There is often a maximum amount of $1,000 in total for this particular benefit, independently of the rest.
Details Of Each Of The 7 General Reasons Covered
Most reasons will give you the right to claim all 3 types of reimbursements we just went through, but some will only be eligible for one or two types. Each card’s insurance certificate usually has a very nice table where it’s easy to see.
There are obviously very specific conditions to know about for each, but here’s the overview.
1. A travel advisory is issued by the government
The simplest one. We just covered it with the above 3 examples.
If the government issues an official travel advisory for the country where you are, you’re covered.
2. A delay
This one is a completely different aspect of trip interruption insurance. One that can be extremely useful for all trips!
Basically, if you miss a flight because of a delay, you are covered! The delay can be an automobile delay due to a mechanical failure, weather, a natural disaster, a traffic accident, or road closure, but it can also be a previous flight’s delay.
Usually, if you miss a connection due to a flight delay and the tickets were booked separately, you’re out of luck (as opposed to if the ticket is booked with one airline or with partner airlines, in which case they’ll just put you on the next flight for free).
Our multi-ticket itinerary technique is the best way to save hundreds of dollars on some tickets, especially to Europe. But we usually recommend being cautious about leaving ample time between flights, since you don’t want to have to pay for a new flight in case of a delay.
But with this part of the trip interruption insurance, you’ll be covered to buy a one-way flight to your next destination if you miss your flight! How amazing is that? Can’t wait to try now that I’ve read the details and am comfortable enough knowing I can leave a shorter amount of time and just use the insurance if I miss my flight.
3. A medical emergency
This is not medical travel insurance. It does not cover health expenses. As all covered reasons, it can only give you a reimbursement for one or all of the 3 possible types in the previous section.
It’s important to understand, as you need to make sure you have actual medical insurance.
With trip interruption, you are covered if:
- you or your traveling companion has a medical emergency
- your immediate family has a medical emergency at home
- your host at the destination has a medical emergency
- your key employee, caregiver or business partner has a medical emergency
So if you have a medical emergency on a trip, you’ll get a reimbursement for the unused travel expenses, for your flight home if you miss yours, and a daily amount for your living expenses, but NOT any refund for your healthcare costs (at least not with this particular coverage).
If your family member gets seriously sick and you want to return, don’t expect airlines to waive change fees. They are in the airline business, not the insurance business. Want insurance? Get insurance.
The great thing is that you can get it for free! With trip interruption insurance, you’ll also be covered and will get refunded for a flight back home and get a reimbursement for the unused travel expenses.
Pre-existing medical conditions are obviously excluded.
The same conditions as the above, but if the situation involves death, unfortunately, instead of a medical emergency.
To be clear, this is not life insurance, just like the previous one is not medical insurance. It’s just for the 3 types of reimbursements explained.
5. An employment-related situation
The same 3 reimbursements are available if:
- you lose your employment
- you are transferred by your employer
- your business meeting is canceled
- you are summoned as a reservist or similar
- you are called for jury duty or a witness
These are all pretty straightforward. As mentioned, in many cases, this applies if it’s your spouse who is in the covered situation.
6. A quarantine
If you are quarantined, you get all three types of reimbursements. Very useful during a pandemic (let’s hope no one ever needs it again, though).
7. A situation with your residence/business
If something happens to your residence or place of business while you’re on a trip, you are covered.
Reminder Of All The Types Of Travel Insurance
For those who want a refresher, here are the main types of insurance that credit cards offer for free.
We’ll have more on this subject soon.
Here are the main ones:
- Medical travel insurance: to be covered for healthcare costs if you get sick or hurt. This is the one most think of when they think of travel insurance, and it is extremely useful.
- Trip cancelation insurance: to be covered if you need to cancel your trip for good reason. I’ve used this once, and many of you might need it now, so I’ll have a detailed article soon.
- Trip interruption insurance: to be covered if you need to interrupt your trip for good reason. This is today’s topic, but in short, it is for when you are on a trip (not before a trip).
- Car rental insurance: to be covered for damage on all the cars you rent. Paying for this insurance offered by the car rental company is useless and is very expensive. You get it for free with good cards, I use this multiple times a year.
- Flight delay insurance: to be covered for hotel and meals if your flight is delayed. Airlines don’t owe you anything if the delay is out of their control, and with good reason, so take responsibility and get covered for free. I’ve used this about 10 times and love getting reimbursed for beautiful hotels.
- Baggage delay insurance: to be covered for emergency purchases if your bag is delayed. You’ll be able to buy what you need until the airline gets you your bag. I’ve never checked a bag in 300 flights, so I’ve never used this insurance, but it’s similar to flight delay insurance, so it must be very easy to use.
- Lost/stolen baggage insurance: similar to the previous one, but for cases where the baggage would be lost or stolen.
- Hotel burglary insurance: to be covered for your belongings in case your room is burglarized.
- Travel accident insurance: a type of life insurance policy for travel accidents, in the case of your death during a trip.
- Travel emergency assistance: a service that provides medical or legal assistance over the phone, not to be confused with medical insurance for healthcare costs. This is just phone assistance to help you find help.
- Purchase protection: to be covered if you lose or break new items you purchase. Not travel-related, but getting 90 days of insurance in case you lose or break a new item is a great benefit that no one seems to know about.
- Warranty extension: to be covered beyond the original warranty on new items you purchase. This doubles the manufacturer’s warranty, completely free. I have to make my first claim with this soon; I’ll let you know how that goes.
Trip interruption insurance is an extremely useful free protection to have on any trip. It will refund you if your trip is interrupted for unexpected reasons. You can get 3 types of reimbursements, for 7 different interruption causes.
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