What's Included in Prepaid, Non-refundable Trip Costs?
Your trip cost is your total prepaid, non-refundable costs. The best way to figure out this amount is if you broke your leg leaving your home at the start of your trip, how much money would you lose by cancelling your trip? Here are some common non-refundable costs you will forfeit if you were forced to cancel your trip at the last minute:
All payments, including deposits, towards your cruise, tour, hotel, etc
Pre-arranged transportation to the airport (ever tried getting to JFK?)
Tuition for a class you're taking (for example - a cooking class in France)
The rent on the property you're staying in (for example - the Italian villa or Florida condo). It doesn't matter if you are renting from a private party or a business. What does matter is that the rental agreement must have a penalty schedule showing your cancellation penalties.
Theater tickets, event tickets, Disneyworld passes, etc
Non-refundable airline tickets
More about airline tickets: Changeable does not equal refundable. Refundable means that if you cancel you will get 100% of your money back.
Q. Why is it important to know changeable does not equal refundable?
A. Because if you are thinking you'll just insure the change fee and not the entire cost you paid for the ticket, you will forfeit any plan benefits associated with having to insure the full non-refundable prepaid trip cost. The main benefits are covering Pre-Existing Medical Conditions and Cancel For Any Reason.
With most plans, if they say that you must insure any non-refundable travel arrangements that are subject to penalties they mean just that: non-refundable or subject to penalties. It makes no difference even if the ticket is changeable with a fee. It's still non-refundable and it must be insured.
Q. Are all First or Business Class tickets refundable?
A. No, they used to be refundable, but over the past year or so, we've been seeing both Business Class and First Class tickets that are not competely refundable. Therefore, it's very important you find out if your Business Class tickets will refund all your money if you cancelled your trip. Ask them "If I got hit by a cement truck and had to cancel my trip, will you (the airline) give me 100% of my money back in cash and not a voucher or future credit toward the purchase of another ticket?"
Here's what are typically not prepaid, nor non-refundable trip costs:
• Lodging costs that you pay after you arrive
• The cost of meals
• Day trips, excursions and other side trips you arrange after your trip's departure
• The cost of souvenirs, gifts or other items you expect to buy on your trip
• Visa, passports
Also, Frequent Flyer tickets have a $0 trip cost.
Why is Your Trip Cost Important?
The price of travel insurance is based on three factors:
• Your age(s)
• Your per person prepaid, non-refundable trip cost
• The length of your trip (from the day you leave to the day you return)
Your trip cost is very important when you want to cover Pre-Existing Medical Conditions. There are 4 rules to keep in mind when you want to cover Pre-Existing Medical Conditions:
• With 3 exceptions (CSA, HTH & Travelex), you have to insure at least your trip's full prepaid, non-refundable cost (you can't round it down). If you don't know your final trip cost, estimate it high to be safe. You can always lower to the correct trip cost prior to your departure date. If it drops you to a lower trip cost range, you'll get a partial refund.
and
• The person with the medical condition must be medically stable when you get your insurance
and
• You must get your travel insurance within the first 14 or 21 days after your first trip payment date or by your final trip payment date
and
• You have to insure your trip's full length
If you're flying, taking a tour, cruise, etc. your initial trip deposit date is the first date you made any payment - including a refundable deposit.
If you're driving, you can establish an initial trip deposit date by prepaying a trip cost (ie - hotel reservation) before you leave. You have to actually prepay it (sending a check is best). Just giving a credit card number isn't sufficient because the card typically isn't charged until your checkout.
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