Angela Borden | Mar 4, 2022
When you buy trip insurance*, you will be asked to provide your trip cost. That amount will be used to ensure you have the amount of coverage you need and calculate the cost of the plan.
It’s possible that not every single dollar you spent as part of your trip is insurable. Refundable fees from your resort, for example, would not be included in your insurable trip cost. Keep reading to help figure out what to include when you calculate the trip cost you provide to the insurance company, so you get the coverage you need.
To know what expenses to include in your insurable trip cost, you first need to understand a little about how trip insurance works.
Trip insurance is designed to reimburse you for the amount of unused nonrefundable prepaid payments or deposits you made for your trip. This means that if part of your trip cost is refundable if you need to cancel, interrupt, or delay your trip, you do not need to buy trip insurance coverage for it.
Why don’t you need trip insurance for a refundable part of your trip? Because another party — your airline, cruise line, hotel, excursion provider — is going to refund you the money you spent (according to their stated refund guidelines, which you should review). There is no need to insure that amount with trip insurance.
Here’s an example.
Dave is planning a trip to Bermuda. His expenses are:
Dave’s total expenses are $3,300. His insurable trip cost, however, is $3,100. This represents the total expenses ($3,300) minus the $200 refundable amount for his hotel. He should not buy coverage for trip expenses that are refundable.
Typical trip expenses may include airfare, the cost of a cruise, hotel cost, entertainment and excursions, rental of a house or condo, and other similar items.
Just as you wouldn’t insure refundable expenses, you would not insure free items. If you receive part of your trip for free (maybe an excursion was thrown in for free as part of your hotel booking), then don’t include it as part of your insurable trip cost.
Why not? If you must cancel, delay, or interrupt your trip and miss the excursion, you would not lose any money, so that item is not insurable.
Trip insurance can provide limited coverage for the cost of the airline-imposed fees to re-bank frequent flyer miles. For example, our RoundTrip plans provide coverage to re-bank frequent flyer miles.
The best way to ensure you buy the correct amount of trip insurance is to calculate the cost of the trip for each person, according to what he or she paid. Each traveler is covered up to the lesser of their insurable trip cost on the insurance plan for their nonrefundable, unused trip costs.
Here’s another example.
Bob and Nancy are taking a trip, and they are buying one travel protection plan for both of them. Bob paid $1,000 and Nancy paid $2,000. (Maybe Nancy is going on a solo excursion without Bob.) When they buy their trip insurance, they will be able
to report separate insurable trip costs. Bob should provide $1,000 as his insurable trip cost, and Nancy should provide $2,000 as her insurable trip cost.
When you travel as a couple or group, it’s possible you will have shared reservations. A common example of a shared booking is a rental house when there is one fee for the entire group.
It’s up to the travelers to decide how to split the expense to pay for the shared reservation. If the group shares equally in paying for the booking, then the amount should be divided between each individual in the group, and each would calculate their share into their insurable trip cost.
Let’s look at a few more examples.
Example 1: Sarah’s bachelorette party booked a rental house for $1,000. There are five people going, and each of them paid $200. They should each list $200 as their insurable trip cost. If each person is not named on the booking, they may need to provide other proof they paid the $200.
Example 2: Taylor rented a house for $1,000 for an annual golf trip. Again, there are five people going, but Taylor paid the full $1,000 for the rental. This means Taylor should buy trip insurance and provide $1,000 as Taylor's insurable trip cost.
If you buy excursions or add additional travel to your trip after your initial trip purchase, this could increase your insurable trip cost. In this case, you should let the insurance company know so you have proper coverage. Contact them and provide additional expenses to them.
This is very important if you purchased Cancel for Any Reason (CFAR) or if you wish to have
coverage for pre-existing conditions. **
CFAR is an optional benefit you can add to our RoundTrip plans for an additional cost. This optional coverage allows you to cancel your trip for any reason you wish, including fear of travel and other reasons that might not be covered.
Terms and conditions apply, so please read the plan document for full details.
Keep a record of each trip expense payment you make. While you don’t need them to purchase trip insurance, you likely will be asked to produce proof of payment if you file a claim.
Correctly calculating your insurable trip cost is important. If you have questions, contact your agent or our sales team. They can help you sort through detailed expenses, so you buy the correct amount of trip insurance. Email us at firstname.lastname@example.org or call the numbers below:
Toll free: 1-800-335-0611
*Trip insurance is included as part of a travel protection plan, which consists of insurance coverages underwritten by United States Fire Insurance Company as well as non-insurance assistance services provided by Seven Corners. Insurance coverages are subject to the terms, limitations and exclusions in the plan, including an exclusion for pre-existing conditions.
**Pre-existing Conditions: Losses resulting from pre-existing conditions are normally excluded from coverage. However, such losses are covered on the same basis as losses from all other sicknesses and injuries if you meet the requirements for the Pre-Existing Medical Condition Exclusion Waiver. This waiver is not available with every RoundTrip plan. Additional terms and conditions apply, so please read the plan document for full details.
Important Information from the United States Fire Insurance Company