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How does credit card trip cancellation/interruption insurance work?

To the point Would you like to benefit from trip cancellation/interruption insurance? Know how to compare the credit card offers in Canada!

Trip Cancellation/Interruption Insurance

Trip Cancellation Insurance and Trip Interruption Insurance are two types of coverage that credit cards sometimes offer.

With these coverages, you could be reimbursed for all expenses that are normally non-refundable, should your trip be:

  • cancelled before departure (cancellation insurance)
  • interrupted after it started (interruption insurance)
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Nice Airport (France)

Definition of Trip Cancellation/Trip Interruption Insurance

Trip cancellation insurance can be triggered under certain conditions:

  • between the moment you book your trip
  • and BEFORE it begins

Trip Interruption Insurance may be triggered under certain conditions:

  • during your trip
  • and before the scheduled return date
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Insured people

The trip cancellation/interruption insurance offered by credit cards protects:

  • the credit card holder
  • the close family members travelling with the credit card holder (will vary depending on each credit card)

As a general rule, insurance may apply to the principal holder, their spouse and their dependent child or children.

To be covered by your credit card ‘s Trip Cancellation/Trip Interruption Insurance, you must have paid in full for the trip with your credit card (except for certain cards such as the National Bank World Elite Mastercard which requires partial payment, or the Scotiabank American Express Gold card which requires that 75% of the cost be charged to the card ).

If you are paying for the trip for someone close to you (a spouse or child), but you are not travelling with them, they will not be covered by your Trip Cancellation/Trip Interruption Insurance.

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Covered by Trip Cancellation/Trip Interruption Insurance

The trip cancellation/interruption insurance offered by credit cards WILL COVER:

  • The Insured Person’s Medical Emergency
  • The insured person’s relative’s (family, work partner) medical emergency
  • The insured person’s death
  • The insured person’s relative’s death
  • The insured person’s host’s death (at destination)
  • A government warning, after your travel purchase, advising travellers not to travel to the intended destination
  • Loss of employment or transfer
  • An event rendering the insured person’s principal residence uninhabitable or the insured person’s business place unusable.
  • The delay of a private car or a carrier due to external conditions (traffic accident, bad weather, roadblock, etc.) preventing an insured person from starting their trip (trip interruption insurance only).

In order to make a claim for trip cancellation/interruption insurance, the cause of this must be particularly important and justifiable.

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Nice - France

Not covered by Trip Cancellation/Trip Interruption Insurance

Situations not covered

Trip Cancellation/Trip Interruption Insurance offered by credit cards WILL NOT COVER:

  • A pre-existing health problem
  • Participating in sports activities as a professional
  • Participating in dangerous activities, such as sky diving
  • Voluntary self-harm
  • Criminal Acts
  • Abuse of medication, drugs or alcohol
  • Mental or psychological problems

The general rule is this: any problem you were aware of BEFORE you booked your trip (cancellation insurance) or that you might have DURING your trip (interruption insurance) may not allow you to make a claim under these insurances.

Countries not covered

Finally, some credit cards do not cover specific countries or even certain regions of a country.

In order to know if the country in which the rented vehicle will travel is covered, it is up to you to:

  • consult the booklet detaling the coverage provided with your card
  • or call the card issuer in case of doubt

Before you leave on your trip, check your credit card insurance booklet to find out about your coverage!

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Abu Dhabi

Refunds

The coverage provided by your credit card will depend on the date of cancellation/interruption of your trip and the expenses incurred as a result of this trip.

For trip cancellation insurance, you could:

  • be reimbursed for the non-refundable portion of your travel expenses (up to a certain limit).

For trip interruption insurance, you may:

  • be reimbursed for the non-refundable AND unused portion of your travel expenses (up to a certain limit);
  • be reimbursed for the costs incurred by your hasty return.

Compensation will vary depending on credit cards

  • $500 to $2,500 per insured person
  • up to a maximum amount for the whole family

Credit cards will differ in terms of the coverage offered (cancellation AND/OR interruption) and the amount covered (per person, per trip).

As a general rule, the higher your annual credit card fee, the better is the coverage! But some cards offering an annual fee waiver for the first year already have excellent coverage.

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Make a claim

You have to cancel your trip? You have to interrupt your trip after leaving?

You will need to contact your credit card insurance company as soon as possible to make a claim. Trip Cancellation/Trip Interruption Insurance covers you for all non-refundable parts of your trip up to a certain limit.

If you cancel your trip well in advance, there is a good chance that many parts can be reimbursed directly without using the insurance (e.g. hotel or car rental that can be cancelled without charge). And you’d have a better chance of getting your airfare refunded without going over the maximum limit.

Make sure you have all supporting documents on hand:

  • Flight tickets
  • Hotel reservations
  • Car rental booking
  • Medical records

Keep ALL your proofs. And most importantly, make sure you keep your credit card open until the end of your trip! If you cancel your credit card, you won’t be able to make an insurance claim, even if you paid for the entire trip with it!

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Credit cards milesopedia recommends

Not all credit cards are equal when it comes to trip cancellation/interruption insurance.

As a general rule, credit cards offering trip cancellation/interruption insurance will differ in 3 aspects:

  • Coverages offered (cancellation AND/OR interruption)
  • Amount covered (per person, per trip)
  • Booking conditions (total or partial amount on the card)

Here are 5 credit cards that we recommend for trip cancellation/interruption insurance, based on different income levels:

BMO® World Elite®* Mastercard®*

The BMO® World Elite®* Mastercard®* is one of the only credit cards to allow partial payment to be covered. It’s convenient for those who use points and miles!

In addition, it offers excellent coverage for trip cancellation/interruption insurance:

Specificities Details
Trip Cancellation Insurance up to $2,500 per insured
Trip Interruption Insurance up to $2,000 per insured
Booking conditions Coverage applies only when you pay, before departure, for all or part of the
cost using the primary or co-applicant’s card .

The Scotiabank Passport™ Visa Infinite*

The Scotiabank Passport™ Visa Infinite* Card does not charge a conversion fee for foreign currency transactions. So you can charge your travel purchases such as car rental, airfare abroad without paying the 2.5% fees charged by most credit cards!

The Scotiabank Passport™ Visa Infinite* Card requires an individual income of $60,000 or a family income of $100,000.

Specificities Details
Trip Cancellation Insurance up to $2,500 per insured
Trip Interruption Insurance up to $2,500 per insured
Booking conditions Coverage applies only if you pay at least 75% of each person’s travel expenses with your Scotiabank Passport™ Visa Infinite* Card.

BMO® AIR MILES® World Elite®* Mastercard®*

The BMO AIR MILES World Elite Mastercard is one of the only credit cards to allow partial payment for coverage. It’s convenient for those who use points and miles!

In addition, it offers excellent coverage for trip cancellation/interruption insurance:

Specificities Details
Trip Cancellation Insurance up to $2,500 per insured
Trip Interruption Insurance up to $2,000 per insured
Booking conditions Coverage applies only when you pay, before departure, for all or part of the
cost using the primary or co-applicant’s card .

Scotiabank Gold American Express® Card

Scotiabank Gold American Express® Card completely changed in 2019.

Its main advantage: it does not charge any conversion fees for foreign currency transactions. So you can charge your travel purchases such as car rental, airfare abroad without paying the 2.5% fees charged by most credit cards!

Scotiabank Gold American Express® Card only requires an income of $12,000.

Specificities Details
Trip Cancellation Insurance up to $1,500 per insured
Trip Interruption Insurance up to $1,500 per insured
Booking conditions Coverage applies only if you pay at least 75% of each person’s travel expenses with your Scotiabank American Express Card .

The Scotiabank American Express Card

The Scotiabank American Express Card is one of the only cards in Canada, with no annual fee, year after year, to offer Trip Interruption Insurance (but it does not have Trip Cancellation Insurance).

It’s an excellent card for those who are new to travel hacking and want to benefit from this type of insurance without paying an annual fee!

Specificities Details
Trip Cancellation Insurance
Trip Interruption Insurance up to $2,500 per insured
Booking conditions Coverage applies only if you pay at least 75% of each person’s travel expenses with your Scotiabank American Express Card .

Conclusion

By choosing the right credit card, you could avoid losing hundreds or even thousands of dollars in case of cancellation or interruption of your trip! As you have seen, there is no shortage of choices!

Anyway, remember to check out the insurance booklet provided with your credit card BEFORE booking your trip!

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