When Can I Cancel a Travel Insurance Policy?
Not booking right away is one of the cardinal sins of travel insurance. You want that travel insurance policy confirmed as soon as possible, so that if anything unexpectedly prevents you from taking the trip, you won't suddenly lose everything you've already invested into it. A good policy is the best protection for that.
But what happens if it's actually the policy you want to cancel? Can you do that?
In pretty much all instances, the answer is yes. Travel insurance policies can be cancelled at the policyholder's request. The question is whether or not it's worth it for him or her to do so. Because not all types of cancellation situations will play out the same way.
Cancelling During the Free Review Period
Travel insurance policies typically have what is called a free review period. During this time, which tends to last for about two weeks or so, policyholders have a chance to review the terms and essentially decide whether it fully meets their needs or not. Considering how important it is to book travel insurance right away—without necessarily having the time to review everything—this is a nice luxury for travelers to have.
What makes it even better is the lack of penalization. The free review period is often the only time where someone can cancel a policy and face no financial repercussions at all—hence the "free" in its name.
Cancelling Before the Policy Activation Date
Let's say the free review period has passed. You haven't cancelled the policy, but suddenly something has come up and you won't be able to take the trip you had hoped for. For whatever reason, it doesn't make sense to make a trip cancellation claim. Instead, you'd prefer to just get a refund on your travel insurance policy. How will that work?
Cancelling the policy shouldn't be too much of a hassle. Since it hasn't become active yet (i.e. you haven't departed), it should still be eligible for a full refund, minus some administrative fees. Those fees are really the only difference between cancelling during the free review period and cancelling after it (but before departure).
Cancelling During the Active Policy Dates
This is where the most variables tend to come into play. Every insurer has a different way of handling this sort of scenario, where a traveler has chosen to terminate the coverage early—but chooses not to make a trip cancellation claim.
Refunds for those remaining days are usually possible, provided certain conditions are met. If a claim has already been made on the trip, then that traveler will likely be disqualified from getting a refund for the unused days. Sometimes there is also a minimum days threshold that must be passed in order for someone to get the refund. For example, if the threshold is seven, then travelers who only have six days left will have their requests denied.
Bear in mind that this applies to travelers who have single trip policies, not annual ones. The problem with trying to institute the same system for people with annual plans is that they could have potentially gotten far more use out of them and get an unfair amount of value back in return. Though some insurers may offer some kind of compensation for people who have to cancel those policies, the amounts will likely differ, and it's important to understand how one particular company would handle that situation before taking out a policy.