When plans go wrong: Your guide to booking refundable travel

The recent global IT outage turned travel plans upside down worldwide, particularly for Delta Air Lines passengers.

While airlines, hotels and other travel providers scrambled to offer refunds and alternative travel, given the likelihood of a delayed or canceled travel journey, you may have considered abandoning your trip altogether.

This is where refundable travel becomes valuable. You don't need to wait on hold for hours for your airline to tell you there are no alternative flights available or scour the cancellation policy of a hotel booking you made last year to determine if you will receive your money back.

You can change or cancel your travel at your leisure by booking refundable travel.

If you want to avoid being caught up in the next travel meltdown, here is everything you need to know about booking refundable flights, hotels and rental cars, as well as travel insurance policies.

Related: Chaos at Amsterdam mars an otherwise fantastic business-class flight on KLM's Dreamliner

Should you buy travel insurance?

A lot can go awry on a trip, so carrying one of the best credit cards with travel insurance can offer peace of mind. This protection can save money by covering unexpected trip delays or lost baggage.

Many credit cards offer travel insurance when you use them to book travel. Here are some of the best options available right now:

• Chase Sapphire Preferred® Card (see rates and fees): Offers trip cancellation/interruption insurance, primary car rental insurance and lost luggage insurance
• United Club℠ Card (see rates and fees): Offers trip cancellation/trip interruption insurance, baggage delay insurance, lost luggage reimbursement, trip delay reimbursement, purchase protection, extended warranty protection and return protection
• Chase Sapphire Reserve® (see rates and fees): Offers an auto rental collision damage waiver, trip cancellation/interruption/accident insurance, emergency medical and dental, primary car rental insurance and lost luggage insurance
• Ink Business Preferred® Credit Card (see rates and fees): Offers trip cancellation/interruption insurance*, trip delay reimbursement* and primary car rental insurance when traveling on business*
• American Express Platinum Card®: Offers trip delay*, cancellation or interruption coverage*
• Capital One Venture X Rewards Credit Card: Offers trip delay reimbursement, cellphone protection and an auto rental collision damage waiver

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Related: Should you get travel insurance if you have credit card protection?

Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.*

Consider purchasing independent travel insurance

Your premium credit card benefits usually offer robust protection for a simple weekend getaway. However, some may only cover transportation-related cancellation or interruption costs for illness, injury or death.

Furthermore, most credit card-based benefits cover expenses and activities paid with that particular credit card. Finally, credit card terms and conditions may limit you to a certain number of claims or maximum reimbursement amount within 12 months. There are also many exclusions and exceptions to be aware of, and you likely won't be able to customize your credit card's travel insurance policy to have all the perks you want and need.

So, you might want to consider purchasing an independent travel insurance policy instead.

You can purchase a third-party plan that covers many aspects of your travel, from the flights and hotel stays to the prepaid, nonrefundable tours and excursions, for any trip. Various policies are available, including comprehensive coverage and plans that offer coverage for specific travel-related concerns, such as emergency medical evacuation and travel medical protection.

If you're looking for broad coverage, look for a comprehensive travel insurance plan that can cover your costs in the event of canceled, delayed or interrupted transportation, medical expenses and emergency evacuations, and any costs associated with lost or delayed luggage.

"Cancel for any reason" coverage means exactly that: Cancel because your flight was likely to be delayed by a global IT outage. Cancel because your significant other dumped you at 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 and 21 days from your initial trip payment. You can't purchase it at the last minute.
• You can expect the plan to cost at least 10% to 12% of your trip expenses.
• You may have to insure 100% of your nonrefundable trip costs.
• Though policies vary, most claim you must cancel your trip at least 48 hours before departure time to receive a refund. (Refunds vary per policy but typically amount to up to 75% of the trip cost.)

Book refundable flights

Frequent travelers know that they can cancel flights operating within or to the U.S. within 24 hours of booking; however, each airline has specific policies regarding last-minute bookings. For example, Alaska Airlines flights must be booked at least 24 hours before departure, while American Airlines flights must be booked at least two days before departure. Be sure to check each specific airline's policies if you're booking a last-minute trip.

The U.S. Department of Transportation is the governing entity behind this policy, meaning foreign carriers must adhere to this rule when they purchase a fare that arrives in the U.S.

If you don't cancel within 24 hours of booking your flight, here are some other tips to ensure you can get your money back if you decide not to travel.

Book full-price flights

Nobody wants to pay full price, especially if discount options are available. But sometimes, that full-price flight is what you need when things go wrong because those are the only fully refundable tickets without cancellation or change fees. Basic economy tickets are cheap for a reason — the lower price reflects the increased restrictions.

Related: How to avoid airline change and cancellation fees

Book award flights for greater flexibility

Here at TPG, we often tout the value of points and miles for getting outsize value on travel. For first-class travel, 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 savers.

This principle also holds true regarding canceling award bookings. Most airlines and hotels offer more lenient rules regarding 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. For instance, United MileagePlus members are eligible for full refunds on award mile redeposits up to travel time, meaning there is no charge to cancel your award booking, and you'll receive all the miles.

Just be sure to cancel award tickets before your flight is scheduled to depart. For some airlines, those miles are forfeited the moment the flight takes off without you. For others, you'll have to pay a higher fee to reinstate those miles.

Book budget airlines you don't mind abandoning, if necessary

Most frequent flyers 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 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.

Book refundable hotels

Each chain, brand and property has its own rules and guidelines, and sometimes, different room rates will even have varying cancellation times and dates.

It's important to read through specific hotel policies as some cost-saving or discounted rates often include a nonrefundable clause. Additionally, some properties will request greater advance-notice windows despite its parent company policies. Ensure you read the fine print carefully, 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). If you are in a bind, try asking for what you hope to accomplish in a nice, courteous manner without a sense of entitlement.

Related: Want to get into your hotel room early? Try this

Regarding online travel agencies like Hotels.com, Expedia and Priceline, which purchase travel in bulk, know that these companies have little to no negotiating power with the hotels that 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 seeking 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 to guarantee they'll earn your money.

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

So, if you need to be able to get out of your travel plans quickly, book directly through the hotel.

Related: 6 reasons to avoid booking through an online travel agency

Use hotel points to book award redemptions with more flexibility

Generally, you can get your hotel points redeposited to your account when you cancel hotel award bookings as long as you do so before your stay. Better yet, most hotels don't charge redeposit fees on award bookings, unlike airlines.

Some properties require at least 48 hours of advance notice; therefore, you'll also want to read the fine print carefully before booking.

Try booking an Airbnb instead of a hotel

Hotels generally tend to be more strict about refunds and no-shows. However, individual Airbnb hosts have control over their own cancellation policies.

You are neither guaranteed nor entitled to a refund if you must cancel, particularly when it's at the last minute, but it never hurts to ask very nicely and offer some explanation, especially if the reason you can't make it is out of your control. For instance, if your flight is canceled and you cannot get to your destination, it makes logical sense that you won't be able to make it to your Airbnb.

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

Book refundable rental cars

Many companies want your business when it comes to booking rental cars. However, the industry can include many hidden fees throughout the booking process, and it isn't always clear what is and isn't mandatory.

Related: How to use AutoSlash to save on rental cars

Fortunately, you can shop around for prices and generally cancel rental car reservations without penalty since you don't pay at the time of booking but instead at pickup. (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 needing it to get home.

Related: How you can redeem points and miles for car rentals

Bottom line

Canceling a trip you were eagerly looking forward to can be incredibly disappointing, no matter the reason for the cancellation. Nonetheless, following certain guidelines can help minimize the financial impact of canceling your trip. This way, while you may feel a sense of loss emotionally, at least your finances may not take as much of a hit.

Related reading:

For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.