The primary purpose of trip cancellation insurance is to reimburse travelers for nonrefundable costs such as airline tickets, hotel stays, cruises, and tour bookings. Because many travel providers have strict "100% penalty" policies, a sudden cancellation without insurance often means losing the entire investment. This insurance allows travelers to recover their funds and potentially rebook their trip at a later, more stable time. Common Covered Reasons

Events like hurricanes, floods, or earthquakes that render a home or a destination resort uninhabitable.

Terrorism in a destination city shortly before departure or the cessation of services due to a strike.

Jury duty, military reassignment, job loss, or a traffic accident on the way to the airport.