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, Disney World 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 may forfeit any plan benefits associated with having to insure the full non-refundable prepaid trip cost. The main impact would be to the Trip Cancellation / Interruption Benefits of the Waiver of the Pre Existing Medical Condition Exclusion.

With many plans, if they say that you must insure all 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. Do Cruise Line Port Charges or Taxes need to be insured?

A. I myself (Steve) started a thread on Cruise Critic in January 2010 asking specifically if cruise lines’ Port Charges or Taxes are refundable. I received dozens of responses. The majority were “No, they aren’t refundable”. However, I also got responses saying “Yes, they are refundable”. It seems to vary from cruise line to cruise line.

So, should you insure Port Charges or Taxes? I (Steve) don’t know. If you choose not to insure Port Charges or Taxes, I suggest you get, in writing, from the cruise line that they are fully refundable if you cancel at the last minute. Your risk is that if you don’t insure the full non-refundable prepaid trip cost, you may forfeit any plan benefit associated with having to insure the full non-refundable prepaid trip cost including, but not limited to, obtaining the Waiver of the Pre-Existing Medical Condition Exclusion.

Q. Are all First or Business Class tickets refundable?

A. No, they used to be fully refundable, but now many have a non-refundable fee and you get the rest of the money back if you cancel the ticket. In this case, you are just obligated to insure the non-refundable fee. See Steve’s blog post “How Do I Insure Business Class Airline Tickets?” for a more detailed discussion.

Here’s what are typically not prepaid, nor non-refundable trip costs:

• Lodging costs that you pay once 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
• Passports (some plans will provide coverage for replacement if lost or stolen during your trip.)

Also, Frequent Flyer tickets and credit card points have a $0 trip cost.

Why is Your Trip Cost Important?

The cost of a travel insurance plan is usually 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:

1. 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
2. The person with the medical condition must be medically stable when you get your insurance, and
3. You must get your travel insurance within the first 14 days after your first trip payment date, and
4. 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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	Since Jan. 2005
Easily Contact BasicTravelinsurance.com via email: steve@tripinsurancestore.com

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