Does your credit card offer trip cancellation insurance? Find out now

Imagine that you have planned a trip to Switzerland months ago, keeping in mind your finances, the weather of the destination, your work schedule, etc. You have booked everything for the trip, from flight tickets to hotel stays.

 Just before a week of the journey, you are diagnosed with dengue, and now you are forced to cancel all your plans; what happens in such a scenario? Do you lose all the money that you have spent on tickets, hotel stays, etc? Not necessarily; some credit cards offer you a trip cancellation facility.

Trip cancellation coverage

Trip cancellation and trip interruption are a travel insurance policy that reimburses pre-paid, non-refundable travel expenses if your trip gets cancelled. Trip cancellation covers any financial losses you incur if your trip gets cancelled due to an unavoidable situation. However, you will receive trip cancellation insurance only before the trip begins.

Trip interruption covers any cost when your trip is interrupted due to an unexpected event. It also covers any loss if the trip is interrupted by an unforeseen circumstance that requires you to return home.

However, both trip cancellation and trip interruption do not cover all unexpected expenses. Your credit card will specify the kind of expenses it will cover under trip cancellation and trip interruption.

What is the role of a credit card?

Travel insurance on credit cards covers instances such as emergency medical treatment, accidents, trip cancellations etc. Travel insurance coverage will include expenses on flight tickets, hotel stay, accident coverage etc.

1. In order to get travel cancellation benefits on your credit card, make sure to make payments for your bookings through a credit card.
2. Make payments for your flight tickets through a credit card that offers travel insurance benefits.
3. Credit card trip cancellation benefits will not be available if you have made payments through any other financial tool.

However, every bank has different categories for providing travel insurance coverage. It is advised to check specific details on their bank websites or customer care service.

Factors to consider before getting a credit card to cover travel cancellation charges

1. Travel rewards: Whenever you plan to get a travel credit card, compare the offers by various banks. Apart from cancellations, some credit cards offer accident coverage and luggage loss coverage. Please check for these details before choosing a travel credit card.
2. Finances: Before finalising your travel plans, check your budget and credit limit. Only spend up to the amount that your credit card can cover, as travel cancellation refunds will only be provided on credit card payments.

In a nutshell, there may be many reasons why you might have to cancel your trip or end it midway. Many unexpected events cannot be avoided. However, travel insurance coverage allows you not to lose money in unforeseen circumstances. Make sure to make all your travel bookings through your credit card to ensure full coverage on your trip cancellations.