Hi Steve, I want trip cancellation insurance to cover my hotel costs in case I have to cancel my trip for one of the normally covered reasons. I have reserved 3 nights in Paris which are guaranteed with my credit card. My credit card will be charged $788 if I cancel my trip less than 5 days before I arrive. I have not prepaid the $788. How should I insure the $788 hotel to be sure I don’t lose the $788 if I am forced to cancel my trip? Thanks, Barbara
PS – I’ve already asked your competition and they have assured me that the $788 is fully insurable, but I’m still not sure about the coverage.
While I don’t know exactly what transpired in your interactions with my competitors, I can tell you that insurance companies are happy to take your money. Getting an insurance company to take your money isn’t the problem. The problem comes later when you try to get your $788 back.
Rather than bore you with a lot of words, I’ll just tell you the answer: Your $788 will not be a covered trip cost because you are not prepaying the $788. It makes no difference that you lose the $788 if you cancel your trip for a covered reason or not a covered reason. The missing qualification is that the $788 is not prepaid. Prepaid means the cost is paid before you leave on your trip.
So, what about the advice others have given you? Semantically they are correct. You can insure the $788. However, and this is just my opinion, the advice you have received implies that you will get your $788 back if you have a claim. That is a complete lie – you’ll never get your $788 if it’s not prepaid before you leave on your trip.
PS – I covered this same topic on April 18, 2012 in a post called “Don’t Waste $429 on Un-Needed Trip Cancellation Insurance“. Take a look at that post.