For many Canadian snowbirds (and other travellers), the cost of renting a vacation rental is often their single biggest travel expense - with rental costs often ranging from $10,000 - $30,000 or more.
That's why protecting the cost of your vacation rental with trip cancellation and interruption insurance in the event you need to unexpectedly cancel or come home early from your trip makes sense for many reasons:
- The cost of a vacation rental can be significant, often having a dollar value reaching well into the five-figure range
- Unforeseen events that require you to cancel or return early from your trip, such as illness, injury, death and others, can happen to anyone at any time.
- The need to cancel or interrupt a trip due to illness, injury and other reasons can increase with age
Trip cancellation and interruption insurance can help protect you from big financial losses by reimbursing you for the non-refundable, pre-paid portion of your vacation rentals.
Don't put yourself at risk of losing thousands, or even tens of thousands, of dollars.
Our agents can help you determine if it’s worthwhile for you to obtain trip cancellation and interruption insurance for your vacation rental based on your specific circumstances.
What Does Trip Interruption and Cancellation Insurance Cover for Vacation Rentals?
Trip interruption and cancellation insurance covers you for the non-refundable, pre-paid portion of your vacation rental cost.
Be aware that your expenses will only be covered if you cancel or interrupt your trip for a reason that is covered by your policy.
It's also important to know that this type of travel insurance doesn't cover you for medical expenses - you'll need a single-trip travel medical insurance policy or multi-trip annual travel medical insurance policy for that.
What’s the difference between Trip Cancellation and Trip Interruption Insurance?
Trip Cancellation Insurance - When Does it Cover You?
Trip Cancellation Insurance reimburses you for the eligible, non-refundable portion of your vacation rental cost if you need to cancel your vacation rental prior to your scheduled departure date due to one of the eligible causes for cancellation listed in your policy.
Trip Cancellation Example:
Let’s say you rent a home in Arizona for 4 months at $5,000 per month, for a total of $20,000, and provide the owner with a non-refundable deposit of $10,000 (50% of the total rental price). However, prior to your departure, you need to cancel your vacation rental due to a covered cause for cancellation. In this case, your trip cancellation coverage would reimburse you for the $10,000 non-refundable deposit.
However, if you had paid the full rental amount of $20,000 and it was non-refundable under the terms of your rental agreement, and you had to cancel prior to your departure, your trip cancellation coverage would reimburse you for the full $20,000.
Trip Interruption Insurance - When Does it Cover You?
Trip Interruption Insurance, on the other hand, reimburses you for the unused portion of any eligible, non-refundable vacation rental costs if you need to come home early after you have departed for your trip due to one of the eligible causes for interruption listed in your policy.
Trip Interruption Example:
Let’s say you rent a condo in Florida for 4 months at $5,000 per month, for a total of $20,000, and one month into your trip, you are required to return home for the rest of the winter due to a covered cause for interruption. Since you have already used one month (or 25%) of your condo stay, your trip interruption coverage would reimburse you for the unused three months (or 75%), which in this case would be $15,000.
Note – The reimbursement amount would be subject to individual policy limits, so you should check your policy at the time of purchase for any limits on vacation rentals/accommodations.
How Much Does Trip Cancellation and Interruption Insurance Cost?
Premiums for trip cancellation and interruption insurance are based on the value of your eligible non-refundable travel expenses that you want to insure. It’s important to know the cost of your vacation rental expenses in Canadian dollars when purchasing your insurance policy, as you will need it to get a quote.
The cost of your vacation rental, your age and your medical history can all play a role in how much your premium is.
As a rule of thumb, trip cancellation/interruption insurance premiums for mature travellers are typically in the range of 7% - 12% of the value of the travel expenses you are insuring.
What are the coverage limits for Vacation Rental Trip Cancallation/Interruption insurance?
Your coverage limit will be personalized based on the cost of your vacation rental. For example, if the cost of your vacation rental is $10,000, you would purchase a policy with a $10,000 coverage limit. However, if the cost of your vacation rental is $40,000, you would purchase a policy with a $40,000 coverage limit.
It's also important to note that once your coverage limit exceeds a certain amount, you will need to get approval from the insurer, which usually isn't an issue, but may take 24 - 48 hours for approval.
For example, Snowbird Advisor Insurance has the following coverage limit thresholds:
- Up to $20,000 CAD of coverage - Available immediately at the time of application
- Over $20,000 CAD of coverage - Must be approved by the insurer. Usually takes 24 - 48 hours.
It's also important to be aware that your coverage limits will be in Canadian dollars, even though the cost of your vacation rental may be in U.S. dollars (or some other currency), so you'll need to convert that amount to Canadian dollars to ensure you have sufficient coverage for your vacation rental.
Example:
If the cost of your vacation rental is $20,000 USD and the exchange rate to Canadian dollars is $1.30, you would need to purchase $26,000 CAD ($20,000 USD x $1.30) of Trip Cancellation/Interruption Insurance to fully cover the cost of your vacation rental.
When should you purchase Trip Cancellation/Interruption insurance?
Trip Cancellation/Interruption Insurance for vacation rentals is often purchased shortly after you have booked your rental, as most rental arrangements are made directly with owners, real estate agents or property managers who don’t offer insurance at the time of booking. It's a good idea to obtain insurance coverage as soon as possible after securing your rental to ensure that you are eligible for coverage.
What reasons am I allowed to cancel or interrupt my trip for?
It is essential to understand that you can’t cancel or interrupt your vacation rental for any reason and receive reimbursement under your trip cancellation/interruption policy.
Your policy will include a specific list of reasons for cancelling or interrupting your vacation rental that will entitle you to file a claim. These are commonly referred to as “covered causes”. If you cancel or interrupt your vacation rental for a reason other than a covered cause, you will not be entitled to compensation.
Covered causes can be broken down into medical causes and non-medical causes.
Some common medical covered causes include an unexpected or unforeseen illness, injury or death of an insured person, an insured person’s travel companion or an insured person’s immediate family member.
Some common non-medical covered causes include flight cancellations due to a weather delay, missed flight cancellations, being summoned for jury duty, a job loss, a disaster at your residence in Canada and a Government of Canada issued advisory against travel to your destination after the date of your booking.
Do Trip Cancellation/Trip Interruption Policies include stability clauses?
It’s important to be aware that trip cancellation and interruption policies include a medical stability clause in the event that you need to cancel or interrupt your trip for a medical reason.
Essentially, this means that if you cancel or interrupt your vacation rental due to a pre-existing medical condition, that condition must have been “stable” (i.e. unchanged) for a minimum period of time prior to the date you purchased your policy.
If you purchase your policy on the date you booked your trip, the period starts on this date. If you purchase your policy after you book your trip, the period starts on that date. So, if you did not buy coverage on the booking date, and then get a medical condition and try and purchase coverage, you would be out of luck.
A common stability period for trip cancellation/interruption insurance is 90 days, but can vary from policy to policy, so be sure to check yours.
If you cancel or interrupt your vacation rental for a pre-existing medical condition that was not stable for the full stability period, you would not eligible for reimbursement.
Keep in mind that if you need to cancel or interrupt your vacation rental due to a travel companion or immediate family member’s medical condition, they must also meet your policy’s stability clause requirements for that medical condition. If they don’t, you would not be eligible for reimbursement.
What are the coverage requirements for vacation rentals?
If you’re considering getting trip cancellation and interruption insurance for your vacation rental, here are a few eligibility criteria you need to be aware of:
- You will need to have a written rental agreement for your vacation property. This agreement should include details about refund policies and payment terms.
- Your rental expenses must be non-refundable.
- You must provide receipts and evidence for any rental amounts you have paid.
- Your cancellation/early return must result from an unexpected or unforeseen event.
- Your reason for cancellation/early return must be a “covered cause” under your insurance policy.
- If you cancelled or interrupt your trip for a medical reason, you must meet your policy’s stability clause requirements.
