When plans go wrong: Your guide to booking refundable travel

In recent weeks, the travel industry has been rocked by disruptions that sound like they belong in action movies starring The Rock. With cruise ships quarantined for weeks on end, and entire countries shut out from interaction with the rest of the world, travelers around the world are asking us, "What are my options? Where can I go? Can I even travel at all?"

Related: Everything you need to know about traveling during the global coronavirus outbreak

We've published plenty of guides about safety, travel insurance and destinations that are still safe to visit. This one, however, tells you everything you'll want to know about planning a trip you might need to cancel on short notice — without forfeiting your entire vacation budget.

Travel insurance

Credit card trip protection does not apply to epidemics

Unfortunately, the coronavirus is one of those major events that is not covered under most insurance policies, regardless of whether you have insurance through your credit card benefits, or if you purchased an independent insurance plan from a third-party underwriter.

Travel insurance providers have now declared COVID-19 to be a “foreseen event" — and once that happens, travelers can no longer purchase trip cancellation insurance benefits.

Purchase "cancel for any reason" travel insurance

That being said, it isn't all gloom and doom: You can still get your money back in the event of a travel disruption by purchasing a really good travel insurance plan. It's just going to cost you.

Related: When to purchase travel insurance vs. relying on credit card trip protection benefits

"Cancel for any reason" coverage means exactly that: Cancel because the coronavirus beat you to your vacation spot. Cancel because your significant other dumped you in the airport. Cancel because you feel like it. Whatever the reason, this level of coverage allows you the peace of mind of knowing that you can get your money back when plans go awry.

There are a few key points to note about this level of coverage:

• “Cancel for any reason” plans usually must be purchased within 14-21 days from when you made your initial trip payment. You can't purchase it last-minute.
• You can expect the plan to cost at least 10-12% of your total trip expenses.
• You may have to insure 100% of your trip costs in addition to canceling your trip at least 48 hours before departure time to receive a refund of up to 75% of the trip cost.

For additional guidance, check out our guide to independent travel insurance plans.

Flights

Cancel within 24 hours of booking

Frequent travelers know that you can cancel flights operating within or to the U.S. within 24 hours of booking, as long as you purchase seven days or more before the date of your departure. However, this rule is worth mentioning again, especially in the context of recent travel news.

The US Department of Transportation is the governing entity behind this policy, which means that foreign carriers are also required to adhere to this rule when you purchase a fare that arrives into the U.S.

But note that the no-penalty cancellation within the first 24 hours of booking only applies to flights booked more than seven days in advance, as this reader mistake story illustrates in excruciating detail. If you purchase your flight within that seven-day window, there are no refunds.

Book full-price flights

Look, we get it: Nobody wants to pay full price, especially if discount options are available. But sometimes, that full-price flight is exactly what you need for times when things go wrong, because those are the only tickets that are fully refundable without cancellation or change fees.

Related: The best ways to avoid flight change and cancellation fees

Book award flights for greater flexibility

Here at The Points Guy, we often tout the value of points and miles for getting outsized value on your travel. Whether it's for first-class travel for an out-of-pocket cash cost of a few dollars toward taxes and fees, or last-minute flights to see a family member in an emergency, points and miles are your biggest money saver in the travel game.

Related: Here's what your points and miles are worth this month

This principle holds true when it comes to cancelling award bookings as well: Most airlines and hotels offer more lenient rules when it comes to award reservations because they're refunding you in the company's loyalty currency. If you cancel in advance, you can usually request to redeposit your miles for a fee, depending on whether or not you hold elite status with the airline. United's top-tier elite 1K members, for instance, are eligible for full refunds on award mile redeposits up to the time of travel.

Just be sure to cancel before your flight is scheduled to depart: In some cases, those miles are forfeit the moment that flight takes off without you. In others, you'll have to pay a higher fee to have those miles reinstated to you; United, for instance, charges $125 to get your miles back after no-showing on a flight, even for top-tier elite members.

Book with Southwest

Ahh, Southwest: America's favorite family-friendly airline continues to set itself apart from the competition. Beyond the free checked bags and open seating, Southwest offers one of the best policies of all time: Cancel or change your flight at any time, and simply pay the difference. There are no penalty fees at any point, even if the fare goes up or down.

Related: You'll never pay change or cancellation fees on Southwest

When it comes to Southwest cancellations, here's what you need to know:

• For award travel, you get your Rapid Rewards points back immediately after you cancel. You will be refunded the points even if you no-show a flight (although it's good form to cancel as courtesy to the airline, and for other passengers who may be waiting standby).
• For flights paid in cash, you can get a full refund within 24 hours, as with most U.S. airlines; after that, you get the value of your ticket in the form of Southwest credit, which is valid for one year from the date of original booking. You must cancel more than 10 minutes before your scheduled departure time.

Book through an airline offering waivers for travel impacted by coronavirus

A number of airlines have begun offering waivers for travel booked over the next couple of months. If you're planning a trip but have been feeling hesitant over coronavirus concerns, consider booking with one of these airlines.

Here's what you need to know for U.S. airlines flying to Europe; and here's what you need to know for domestic travel.

Related: These airlines and hotels are offering full refunds for bookings in coronavirus-impacted regions

Note that these waivers apply to travel that hasn't been booked yet; if you have a trip already on the books, consult our guide to independent travel insurance to learn more about your options.

Purchase Freebird flight protection for domestic flights

Freebird essentially works as a "$19 insurance" option for domestic flights: If your flight is canceled or delayed past a certain number of hours, Freebird will book you on the next flight of your choice that's headed to your destination — even if it's on another airline.

Book low-budget flights you don't mind abandoning if necessary

Most frequent fliers don't celebrate low-cost carriers for either comfort or convenience. Instead, budget airlines usually win on one front alone — cost. The reason is simple: If you just need to get from Point A to Point B, a good fare on a low-cost carrier can cost less than a tank of gas. Similarly, if you're planning a trip but don't want to drop cash on a travel insurance plan, purchasing a budget fare may make more sense than paying for a full-fare ticket you may have to abandon.

Hotels

Book directly through hotels with liberal cancellation policies

Each chain, brand and property has its own rules and guidelines, and sometimes different room rates will even incur varying cancellation times and dates — some lower-cost fares, for instance, often include a nonrefundable clause. Others like to get tricky; sometimes an individual property will request greater advance-notice windows despite its parent company policies. Make sure you read the fine print carefully, and ideally more than once, before hitting "confirm", for peace of mind.

And if unique circumstances are working against you so that last-minute cancellation is inevitable, keep in mind a cardinal rule of travel: It never hurts to ask for what you want (in this case, a refund) — nicely, courteously and with no sense of entitlement for what you hope to accomplish.

Skip third-party agencies

I'm primarily a Hotels.com girl, simply because most of my personal stays are haphazard enough that I don't have the opportunity to build up much elite status. Hotels.com makes it really easy for me to earn points on each of those random nights here and there, and aggregate all of that hard-earned effort into one free night per 10 nights of paid stays.

But when it comes to online travel agencies (OTAs) like Hotels.com, Expedia or Priceline which purchase travel in bulk, these companies have little to no negotiating power with the hotels that actually offer room inventory. Moreover, OTAs aren't as incentivized to help you because if you cancel, they lose out as well, unlike hotels under a chain which at least will want to earn your long-term business. Moreover, most of the best rates through Hotels.com or Expedia will include a nonrefundable clause because you're trading your flexibility for the guarantee that they'll earn your money.

It's important to note that credit card travel portals like Chase Ultimate Rewards, American Express Membership Rewards and Citi Thank You all count as third-party agencies in the eyes of the hotel. Basically, if you didn't purchase your room in person or through a hotel representative or website, you aren't that hotel's direct customer.

So if you need to be able to get out of your travel plans quickly, book directly through the hotel. As mentioned above, you'll have a much better chance of asking for what you want — and getting it.

Use hotel points to book award redemptions with more flexibility

As a general rule, you can get your miles redeposited to your account when you cancel hotel award bookings, as long as you do so enough in advance of your stay. Better yet, most hotels also don't charge redeposit fees on award bookings, unlike airlines.

Like the section above says, most properties require a 48-hour advance notice, but you'll also want to read the fine print carefully here as well.

Try booking an Airbnb instead of a hotel

Hotels across the board tend to be more strict about refunds and no-shows. But individual Airbnb hosts have control over their own cancellation policies.

Related: The best credit cards for booking Airbnbs

You are neither guaranteed nor entitled to a refund in the event that you need to cancel, particularly when it's last-minute. But it never hurts to ask very nicely, and it always helps to offer some kind of explanation, especially if the reason you can't make it is out of your control. For instance, if your flight is canceled and you have no way of getting to your destination, it makes logical sense that you won't be able to make it to your Airbnb.

Tip: Each Airbnb property includes that host's cancellation policy at the very bottom of the listing page.

You can read more about Airbnb's cancellation policies here.

Rental cars

Book car rentals with free cancellation

When it comes to booking rental cars, a lot of companies out there want your business. But the industry as a whole can include a lot of hidden fees throughout the booking process, and it isn't always clear what is and isn't mandatory.

Related: Here's how AutoSlash stands out amongst rental car booking sites

Fortunately, you can price-shop and you can generally cancel rental car reservations without penalty, since you don't pay at the time of booking; you pay at pickup. (Of course, this is a great time to read the fine print on your particular booking, just in case.) However, it's still courteous to call and notify the rental car company if you know you won't be picking up the car you reserved. This frees up your designated vehicle for another customer who may need it to get home.

Related: How to score the perfect car rental

Cruises

Check their cancellation policies or ask for credit toward future trips

As coronavirus fears sweep around the world, cruise companies are offering waivers, no-fee cancellations, deeply discounted sales and credit toward future trips for potential passengers looking to cancel their trips.

Windstar Cruises published a generous new booking policy in late February, allowing travelers cancel their cruises up to 15 days in advance of a trip without paying the [normally steep] cancellation penalties. "The new Travel Assurance Booking Policy is an extra effort to ensure travelers feel comfortable booking a well-deserved cruise vacation now without fearing loss should they need to cancel."

Bottom line

At the end of the day, having to cancel a trip you were excited to take is a huge stinking bummer, regardless of the reason. But following these tips will help ensure that the ache is only felt in your heart — not in your wallet.