Trip cancellation coverage and trip interruption coverage are the two notable coverages in the travel insurance plans. While both coverages are important, there are several differences between trip cancellation coverage vs trip interruption coverage.
Trip Cancellation Coverage
Trip cancellation coverage provides coverage for prepaid, non-refundable trip costs in case you can't take your trip for a covered reason.
This coverage starts from the next day after purchased and lasts until you depart on your trip.
Once you departed on your trip, there is nothing to cancel and the coverage ends. Even if you are traveling to multiple destinations during your trip, it is still considered one trip, starting from the time you leave home.
Trip Interruption Coverage
Trip interruption coverage begins after your scheduled trip departure and provides coverage in case you need to return home early.
The insurance company would pay the cost of travel arrangements for you to return home early. Some plans also include trip interruption coverage for you to rejoin your trip if you missed your scheduled departure for a covered reason.
However, in travel medical insurance, there is no trip cancellation coverage. Also, the trip interruption coverage is a flat amount, such as $1,000, $5,000, or no coverage at all in some travel medical plans.
Multi trip travel insurance plans don't provide trip cancellation coverage but they do provide the trip interruption coverage.
Typically, the covered reasons for trip cancellation as well as trip interruption are the same. However, the exact reasons vary by the specific insurance plan you purchase. Make sure to read the certificate wording thoroughly to understand what events are covered.
Commonly included reasons are you, your traveling companion or a close family member unexpectedly become sick or are injured just before your trip, your travel supplier unexpectedly ceases operations, jury duty, lay off, terrorism, bad weather, hurricanes or natural disasters.
In short, trip cancellation coverage provides coverage for the money you would lose, while trip interruption coverage provides payment for the additional money for covered reasons you would have to spend to return home or resume your trip.