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Trip cancellation insurance: know what your card covers

By Kristen Frisa

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It happens: you plan a vacation, make your reservations and book your flights, and something comes up and you can't go. While it's terrible to have to cancel a trip - or maybe worse, to have to return home early for some reason - it's all the worse if you still have to pay all your travel expenses.

Fortunately, some credit cards offer benefits that reimburse prepaid expenses for cancelled or interrupted trips.

How trip cancellation insurance works
Trip cancellation insurance enables you to recover non-refundable expenses charged to your cards when unforeseeable events force you to cancel travel outside your province of residence. Coverage depends on the card, and the reason for the cancellation. trip-insurance

Eligible causes for a trip cancellation are specified in the cardholder agreement and typically include medical emergencies involving cardholders, close relatives or travel companions. A doctor's written certification is required. There also are acceptable non-medical reasons, including government-issued travel warnings, employer-initiated job transfers and jury duty.

In all trip cancellation cases (not to be confused with trip interruption), cardholders must cancel their trip before the scheduled departure date. Most companies require that you cancel within 48 hours of the event causing the cancellation.

If you travel frequently, having a credit card with trip cancellation insurance can save you a bundle, because you don't have to buy all your coverage through a travel broker.

Seasoned travellers rely on trip insurance, says a travel consultant at Strathroy International Travel, because without it you can be out a lot of money.

"We have one company who will give you back the taxes, but you lose what the fare was," she says. "Some fees are non-refundable. With some companies, you lose your deposit. Some of these trips are expensive; it's a lot to lose."

Of course, coverage requires that you have charged your trip to your credit card, and then paid your credit card bill. However, this requirement also varies depending on your card.

In some cases, the expenses that are reimbursed by your travel insurance must have been charged entirely on the card. With other issuers, you only have to pay for some of your trip on the card. For example, with the HSBC Premier Mastercard, "coverage applies when at least 75 per cent of Eligible Expenses for a Trip are charged to Your Account."

Insurance certificates also stipulate that your credit card account must be "in good standing" at the time you require insurance coverage. In most cases, that means the use of your credit card hasn't been revoked for any reason.

Widely varying maximums
For cardholders who take many family trips, National Bank Platinum Mastercard and Visa Desjardins Travel Gold offer $2,500 in non-refundable expenses for each immediate family member.

Although the ScotiaGold Passport Visa card also features a $2,500 cardholder maximum, the overall cap for all travel companions booked for the same cancelled trip is $10,000.

In contrast, trip cancellation benefits under the Visa Desjardins Classic, Elegance Gold and Modulo Gold cards are subject to a $500 maximum, and eligible trips must not exceed three days.

With the limitations on cancellation coverage, you may be wondering if your credit card's travel insurance is going to be enough for the trip you've booked.

Catharine Lemire, travel consultant at Goliger's Travel Plus, says clients sometimes buy additional insurance to supplement their credit card's coverage. Travel agencies can top off your coverage to equal the amount you've spent on your trip.

"For instance, a client's credit card will only cover up to $2,000 per person, but if they spent $4,000, they'll buy a top-up so they're covered," she says. "If they had to cancel, they wouldn't be out that extra $2,000 that they put out on their trip."

Watch out for age and pre-existing conditions limitations
Depending on your age, and the ages of the immediate family members travelling with you, your coverage for interrupting or cancelling a trip due to medical issues may have limitations.

For example, the Platinum MasterCard covers trips up to 60 days if you're under 54, but 55- to 64-year-olds are only covered for 31 days. Seniors (aged 65-74) receive coverage for 15 days, and travellers 75 and older won't receive benefits at all.

The most restrictive exclusion is the pre-existing conditions limitation. This clause can nullify an otherwise reimbursable trip cancellation claim if the applicant consulted a doctor, was hospitalized or received medication or treatment before the scheduled departure date. Be sure to read your insurance certificate before booking your trip.

For example, the TD First Class Travel Visa Infinite card disallows coverage for a pre-existing condition that was not "stable" during the period immediately preceding the trip.

The RBC U.S. Dollar Visa Gold gets more specific with pre-existing medical conditions. For instance, you will not be covered during a trip if you have trouble with a heart condition "for which you have taken nitroglycerin more than once per week specifically for the relief of angina pain" in the period leading up to your trip.

If you have a pre-existing condition and you're worried about trip insurance, simply call your insurer and get details about your card's coverage, Lemire says.

"The insurance company will ask you a series of questions, and they will let you know what the premium is," she says. "It depends, but a lot of times they will cover it for you, for the premium," but disclosure is really important.

"If you don't tell them about it then they're not going to pay," she says.

The Strathroy International Travel consultant agrees that a conversation with the insurance company can ensure your coverage.

"You have to fill out a questionnaire, and then the insurance company will either accept or deny," she says, and you may have to pay increased premiums to get your condition covered.

Complementary travel benefits
Because trip cancellation insurance protects against risks that happen before the scheduled departure date, it is best supplemented with trip interruption coverage and flight delay insurance.

Cardholders qualify for reimbursement when they are unable to continue a trip already started due to accidental injury, sickness, severe weather conditions, government travel restrictions and similar serious events.

Keep all supporting documentation in good order for claim submission, including your original tickets, in case you have to use your insurance.

Lemire says the bottom line is, make sure you're covered. Whether through your credit card or a brokerage, trip insurance is a must.

"We've run into instances where clients have had something come up and they didn't have insurance, and then you're disappointed because you're out that money for your trip," Lemire says. "It's definitely worth it, because you just never know what life's going to throw at you."

Credit card trip cancellation insurance comparison

Credit card
APR/Annual fee Trip cancellation coverage limits Trip interruption coverage limits Flight delay coverage limits
HSBC Premier Mastercard 17.9%/$0
$2 000 per Insured Person $2 000
N/A

Visa Desjardins Classic (3 Day)

12.9%/$30
$500/person $1,000
N/A
Visa Desjardins Elegance Gold (3 Day)
10.9%/$50
$500/person
$1,000
N/A
Visa Desjardins Modulo Gold (3 Day)
19.99%/$65USD
$500/person
$1,000
N/A
RBC U.S. Dollar Visa Gold
19.99%/$65USD
$2,500 per trip $2,500 each


Your one-way economy airfare via the most cost-effective route to your next destination
CAA Platinum Mastercard
19.99%/$125
If departure is cancelled, or delayed by the carrier for a period more than 30% of the total length of the trip, you could be covered for up to $2,500 per person
$5,000 per person
$500 per person (delay over four hours)


Visa Desjardins Odyssey Gold
19.9%/$110
$2,500 per person
Unlimited
Living expenses incurred and cost of change of tickets are covered
ScotiaGold Passport Visa Card


19.99%/$110
$2,500 per person, to a maximum of $10,000 per trip
$2,500 per person, to a maximum of $10,000 per trip


N/A
RBC Rewards Visa Preferred


19.99%/$110
$2,500 per trip $2,500 each insured person Your one-way economy airfare via the most cost-effective route to your next destination

Aspire Travel World Elite Mastercard


19.8%/$150
$1,000 per person, to a maximum of $5,000 per trip. Coverage is for cardholder plus spouse and dependents and two travel companions if the full cost of your trip expenses are charged to the card
$5,000 per person, to a maximum of $25,000 per trip. Coverage is for cardholder plus spouse and dependents and two travel companions if the full cost of your trip expenses are charged to the card
Living expenses up to $250 per day and $1,000 per trip for all insured travellers, for flight delay of at least 4 hours
TD First Class Travel Visa Infinite Card


19.99%/$120
$1,000 per eligible person, to a maximum of $5,000 per trip
$5,000 per eligible person, to a maximum of $25,000 per trip
N/A
CIBC Aventura Visa Infinite Card


19.99$/$120
$1,000 per eligible person, to a maximum of $5,000 per trip
$2,000 per person
$500 for living expenses, up to $100 for ground transportation, $100 for entertainment expenses for flight delay of more than 4 hours. Up to $500 for a baggage delay of more than six hours
National Bank Platinum Mastercard


19.99%/$125
$2,500 per person
$5,000 per person
 Up to $500 (maximum $250 per day) for living expenses when the flight is delayed 4 hours or more or you can’t get on your connecting flight

BMO World Elite Mastercard


19.99%/$150
$2,500 per Insured Person to an overall maximum of $5,000 per
Account

$2,000 per insured person
Up to $500 for a delay exceeding 6h
Visa Desjardins Travel Gold
19.9%/$110
$2,500 per person
Unlimited
N/A
AMEX Platinum


30%/$699
$1,500 per insured person up to $3,000 total
$1,500 per trip per person up to a maximum of $6,000 total
$1,000 for living expenses and sundry items
AMEX AeroplanPlus Platinum Card


30%/$499
$1,500 per person up to $3,000 total
$1,500 per trip per person up to a maximum of $6,000 total
$1,000

Source: CreditCards.ca survey of leading travel rewards card issuers. All terms and conditions are subject to change by issuer. Data in the chart are current as of August 9, 2017.

See related: Big cash savings from little-known credit card freebies; Editor's Choice: The best air travel rewards


Updated: August 9, 2017