It’s important to obtain both trip cancellation insurance and trip interruption insurance. Cancellation covers you before you leave; interruption covers you after you leave. If you need to return home early for family or medical reasons, cancellation insurance does not cover your expenses.
Cancellation insurance typically only covers expenses not refundable.
- If you need to cancel, airlines bank your money for the next 365 days. They charge you a rebooking fee of $300 per person unless you have loyalty status and/or can talk your way around this fee. Cancellation insurance does not reimburse your ticket value unless special insurance is specifically purchased. Normal cancellation insurance pays rebooking fees.
- Your apartment deposit (the 25% down) is usually refunded if you cancel 31 days prior to arrival.
Thus, your cancellation risk is normally the amount of your monthly rent (anticipates cancellation within 30 days of arrival) plus any anticipated airline-rebooking fee.
The amount of interruption insurance, unless negotiated, is calculated by the insurance company based upon the cancellation insured amount – and typically covers any additional charges for earlier return airfare plus various amounts for medevac flights, medical, dental, lost baggage, etc.
The amount of insurance purchased should focus on cancellation risks and any other personal concerns.
Filing a claim is pretty easy (based on personal experience). You fill out a form and provide:
- All receipts
- Apartment written cancellation clause
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A contact number for your apartment owner (who is contacted to confirm no refund was paid to you)