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Last August, as wildfires raged across British Columbia, Premier David Eby told tourists planning trips to the Okanagan region to stay away. “The last thing we need is disaster tourists interfering with rescue efforts,” he said.

My wife and I looked at each other. He meant us. At that time, we were on Vancouver Island, partway through a 2.5-week trip through B.C., and our next stop was supposed to be the province’s fire-ravaged interior.

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We had no intention of defying the travel restrictions to go to our destination on the shores of Okanagan Lake. There was only one problem: The owner of the cottage we’d booked months earlier using the short-term rental marketplace VRBO was unmoved by the ban. The deadline to cancel and get a refund had passed, she told us. We were out of luck.

What followed was a crash course in the fine print of vacation cancellations, one in which we ultimately found a loophole that saved us thousands of dollars. But it also served as a reminder that in a world beset by wildfires, floods and wars – not to mention the occasional global pandemic – planning a vacation increasingly means hoping for the best but being prepared for the worst.

And that requires navigating the many pitfalls that lurk in cancellation policies and traveller insurance products, whether booking short-term rentals, hotels, flights or ambitious multicountry getaways.

Like many would-be travellers grappling with soaring inflation in early 2023, there was sticker shock as I researched flights, hotels, short-term rentals and car rentals for our family getaway. And, of course, the more flexible the ticket in terms of cancellations and refunds, the higher the price. “It’s about whether you’re willing to roll the dice or if you want peace of mind,” said Loren Christie, a Toronto-based travel writer and consultant, as if reading my mind at the time. “Peace of mind definitely comes at a higher cost.”

I opted to roll the dice for our B.C. trip when what we should have considered was trip cancellation and interruption insurance. Cancellation insurance covers you if illness or events prevent you from starting your trip, while interruption insurance kicks in once you’ve left, though both are often sold as a package, said Martin Firestone, president of Travel Secure, a Toronto-based insurance broker.

With airlines and a growing number of hotels charging more for the freedom to cancel, insurance can sometimes be a cheaper option, he added.

Consider a roundtrip flight on Air Canada from Toronto to Vancouver this coming August. The base fare, with no refund or change options, comes to around $745, while the refundable option is $1,030. Meanwhile, online quotes for cancellation insurance from RBC, TD and Blue Cross for $745 of coverage ranged from $70 to $80, far less than the $285 difference between the two fares – though you’d likely want more coverage than that if you also booked non-refundable hotels and other transportation that would be affected.

That said, insurance costs are rising. Between 2021 and 2022 trip cancellation insurance quotes more than doubled in price, according to Ratesdotca, based on quotes gathered through its rate comparison website. Quoted prices dipped slightly last year from elevated levels, the company said, but there are signs insurers are once again hiking their prices. Firestone said one of the major insurance companies he works with is imposing an 8-per-cent price hike later this month.

Having opted against cancellation insurance, we set out on our B.C. holiday in mid-August. A week later, four days before our Okanagan VRBO rental was to begin but a month after the deadline to cancel with a partial refund, the B.C. government declared a state of emergency and asked travellers to stay away. By the next day, the request became an order.

As the VRBO host put it to me by e-mail, the unmitigated circumstances were beyond her control, so there would be no refund, full or partial.

A call to VRBO confirmed that even a government travel ban doesn’t override its hosts’ cancellation policies. We would be out more than $2,500 for our five-night stay.

That of course was nothing compared with the real trauma the wildfires were inflicting on residents across the region, forcing them to flee their homes and in some cases watch as their homes burned. We accepted the loss as a pricey lesson learned – an expensive oops, as my wife put it – and rebooked much of the rest of our vacation in other parts of the province.

Not every short-term rental handled the wildfires the same way. Some VRBO hosts did offer refunds.

Meanwhile, VRBO’s rival, Airbnb, has an extenuating circumstances policy that allows guests to cancel with a full refund when government-mandated travel restrictions, states of emergency or natural disasters hit an area. In an e-mail, Airbnb said the policy came into effect during the wildfires in B.C. and the Northwest Territories.

When contacted for this story, VRBO didn’t say whether it has considered adopting a similar extenuating circumstances policy but said the company continually evaluates their policies and makes updates as needed.

The company also said cancellation insurance is an option for VRBO guests to consider.

Yet cancellation insurance policies themselves can also be complex to navigate. It depends on the policy and when it was bought, and whether the reason for the cancellation could have been known at the time.

Manulife’s trip cancellation insurance rules around last year’s wildfires are a case in point. If a family bought coverage after May 6, 2023, and a wildfire later made their prebooked accommodations “uninhabitable,” they would have been out of luck, according to an online FAQ on the company’s website.

That was the day Alberta became the first province of the year to declare a state of emergency owing to wildfires, which meant wildfires were a “known risk” in the eyes of the insurer, no matter where in Canada wildfires might break out or when.

In an e-mail the company said because known events are often unpredictable, policies are typically not updated with a list of existing known events and dates. It recommended travellers check with their travel agent or government websites regarding bans or advisories and said it’s best to buy insurance as early as possible.

It’s a reminder of the importance of reading the fine print, said Firestone.

He points to the war in Israel as another example. After Hamas launched its attack on Israel on Oct. 7, and Israel declared war on the militant group, travellers scrambled to cancel their trips through the region. However, some people who had bought cancellation insurance found their policies excluded claims due to war. “We had 25 clients who all got their money back, but not everyone did,” he said. “If you don’t do your homework, the surprise will come at claim time.”

To that end, he suggests using an insurance broker or booking through a travel agent.

As it turned out, our cancellation journey wasn’t over. On Aug. 22, the day we had originally planned to move into our VRBO rental, the B.C. interior got a spot of good news. The weather had turned in firefighters’ favour, allowing them to contain the wildfires. As such, the government said it would lift its travel ban that night.

Since we had already paid for our empty cottage by the lake, we talked about mounting a last-minute dash into the interior. That’s when we noticed the VRBO host had not sent us instructions on how to enter the cottage after we’d reached out about a refund. I dashed off e-mails asking for the entry code, but she never replied.

It was the loophole we needed. After sending a three-page annotated letter to VRBO documenting our e-mail exchanges with the host, and government statements about the travel ban and its lifting, followed by another month of follow-up phone calls to VRBO, the host issued a full refund.

The whole episode was a wake-up call for us that our tendency to hope for the best when planning travel no longer cuts it. When we go away again, we won’t be leaving everything up to chance.

Tips for travelling in unpredictable times

Know thyself and read the fine print: When deciding whether to pay extra for either refundable tickets or cancellation insurance, be honest about your risk tolerance. A lot will depend on how big (read: expensive) the trip is. No one wants to buy insurance. Even fewer want to read insurance policy details but it’s critical to do so. “Whenever I hear people surprised by cancellation rules and they say they had no idea, that’s a pretty big investment to have no idea about,” said Christie.

Get help: Online booking is fine until something goes wrong and you need assistance. “We’re seeing the return of the old-fashioned travel agent because cancellations are up and it’s much easier to call up your travel agent and get them to rebook you,” said Wayne Smith, a tourism professor at Toronto Metropolitan University. Likewise, buying insurance on your own can be a minefield, so a travel agent or insurance broker can help there too.

The early bird gets the insurance: Wherever possible, book your travel plans and get cancellation insurance as early as possible, to avoid being caught out by the insurers’ “known event” exclusions.

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