When things go awry: Your guide to booking travel with refundable options

The recent global IT outage disrupted travel plans across the globe, especially affecting Delta Air Lines passengers.

As airlines, hotels, and other travel providers rushed to offer refunds and alternative arrangements due to the potential for delays or cancellations, you might have thought about canceling your trip entirely.

This is where refundable travel proves its worth. You won’t have to spend hours on hold waiting for your airline to inform you that no alternative flights are available, nor will you need to sift through the cancellation policy of a hotel reservation made ages ago to see if you can get your money back.

With refundable travel, you have the flexibility to change or cancel your plans at your convenience.

To steer clear of the next travel disruption, here’s everything you need to know about booking refundable flights, accommodations, and rental cars, along with travel insurance options.

Is travel insurance worth it?

A lot can go wrong while traveling, so having one of the best credit cards that include travel insurance can provide you with peace of mind. This coverage can save you money by compensating for unexpected delays or lost luggage.

Numerous credit cards provide travel insurance when used for booking trips. Here are some of the top options currently available:

• Chase Sapphire Preferred® Card: Includes trip cancellation/interruption coverage, primary car rental insurance, and lost luggage protection
• United Club℠ Infinite Card: Features trip cancellation/interruption insurance, baggage delay coverage, lost luggage reimbursement, trip delay reimbursement, purchase protection, extended warranty coverage, and return protection
• Chase Sapphire Reserve®: Offers an auto rental collision damage waiver, trip cancellation/interruption/accident insurance, emergency medical and dental coverage, primary car rental insurance, and lost luggage protection
• Ink Business Preferred® Credit Card: Provides trip cancellation/interruption insurance*, trip delay reimbursement*, and primary car rental insurance for business travel*
• The Platinum Card® from American Express: Includes 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

Eligibility and benefit levels vary by card. Terms, conditions, and limitations apply. For more information, visit americanexpress.com/benefitsguide. Underwritten by New Hampshire Insurance Company, an AIG Company.*

Think about obtaining separate travel insurance

While your premium credit card perks generally provide substantial protection for a simple weekend trip, some may only cover cancellation or interruption costs related to illness, injury, or death during transportation.

Additionally, most benefits tied to credit cards cover costs and activities paid for using that specific card. It's important to note that credit card terms and conditions might restrict you to a limited number of claims or a maximum reimbursement amount over a 12-month period. There are numerous exclusions and exceptions to consider, and you probably won't be able to tailor your credit card's travel insurance policy to include all the features you desire.

Therefore, you may want to think about acquiring an independent travel insurance policy instead.

You can buy a third-party plan that encompasses various elements of your trip, including flights, hotel accommodations, and prepaid, nonrefundable tours and activities. A range of policies exists, from comprehensive coverage to those targeting specific travel-related issues, such as emergency medical evacuation and medical travel protection.

If you seek extensive coverage, opt for a comprehensive travel insurance plan that protects against costs related to canceled, delayed, or interrupted travel, medical expenses and emergency evacuations, as well as any expenses from lost or delayed luggage.

'Cancel for any reason' coverage truly means just that: Cancel because your flight is likely to be delayed due to a global IT outage. Cancel because your partner broke up with you at the airport. Cancel simply because you choose to. This level of coverage offers the reassurance that you can reclaim your money when your plans go off course.

Here are several important aspects to consider regarding this type of coverage:

• 'Cancel for any reason' plans typically need to be purchased within 14 to 21 days of your initial trip payment; last-minute purchases are not allowed.
• The cost of the plan usually ranges from 10% to 12% of your total trip expenses.
• It's possible you'll need to insure the entire amount of your nonrefundable trip costs.
• While policies can differ, most require that you cancel your trip at least 48 hours prior to departure to qualify for a refund. (Refund amounts can vary by policy but generally reach up to 75% of the trip cost.)

Opt for refundable flights

Frequent flyers understand that they can cancel flights to or within the U.S. within 24 hours of booking; however, each airline has its own rules regarding last-minute bookings. For instance, Alaska Airlines requires flights to be booked at least 24 hours before departure, while American Airlines mandates at least two days in advance. Always verify the specific policies of each airline if you're arranging a last-minute journey.

The U.S. Department of Transportation oversees this policy, which means that foreign airlines must comply with this regulation when they buy a fare that arrives in the United States.

If you miss the 24-hour cancellation window after booking your flight, here are additional tips to help you secure a refund if you choose not to travel.

Choose full-price flights

While no one enjoys paying full price, particularly with discounted options available, sometimes that full-price ticket is essential when unexpected situations arise, as these are the only tickets that are fully refundable without fees for cancellations or changes. Basic economy fares are cheaper for a reason — the lower cost comes with heightened restrictions.

Consider booking award flights for increased flexibility

At TPG, we frequently highlight the value of points and miles for maximizing travel savings. For first-class journeys, a minimal out-of-pocket expense for taxes and fees or last-minute tickets to visit a family member in an emergency can turn points and miles into your greatest financial allies.

This concept applies to canceling award bookings as well. Most airlines and hotels have more flexible policies for award reservations because you're being refunded in their loyalty currency. If you cancel ahead of time, you can typically ask for your miles to be redeposited for a fee, which may vary based on your elite status with the airline. For example, United MileagePlus members can receive full refunds on award mile redeposits up to the time of travel, meaning there's no charge to cancel your booking and all miles will be returned.

Just remember to cancel award tickets before your flight is due to depart. With some airlines, your miles are lost as soon as the flight takes off without you. Others may require a higher fee to reinstate those miles.

Opt for budget airlines you’re okay with letting go, if needed

Most frequent travelers don’t praise low-cost carriers for comfort or convenience. Instead, budget airlines typically excel in one area — price. The logic is straightforward: if you need to travel from point A to point B, a competitive fare on a low-cost airline can be cheaper than filling up your gas tank. Similarly, if you're planning a trip but prefer not to spend on travel insurance, securing a budget fare may be more sensible than paying for a full-price ticket that you might end up abandoning.

Reserve hotels with refundable options

Every hotel chain, brand, and property has its own set of rules and guidelines, and occasionally, different room rates may come with varying cancellation policies and deadlines.

It's crucial to thoroughly review individual hotel policies, as some discounted or promotional rates may come with a nonrefundable clause. Moreover, certain properties may require more advance notice than what is stipulated by their parent company's policies. Make sure to examine the fine print carefully, preferably more than once, before clicking "confirm" to ensure peace of mind.

If unique situations arise that make last-minute cancellation unavoidable, remember a key travel principle: It never hurts to ask for what you need (in this case, a refund). If you find yourself in a tough spot, politely requesting your desired outcome without any sense of entitlement can go a long way.

When it comes to online travel agencies like Hotels.com, Expedia, and Priceline, which buy travel in large quantities, keep in mind that these companies have minimal negotiating power with the hotels that provide room availability. Furthermore, OTAs are not particularly motivated to assist you, as they also incur losses if you cancel, unlike hotels affiliated with chains that aim to cultivate your long-term business. Additionally, many of the best deals on Hotels.com or Expedia will typically come with a nonrefundable condition since you're sacrificing flexibility to ensure they secure your payment.

It's essential to understand that credit card travel portals such as Chase Ultimate Rewards, American Express Membership Rewards, Capital One Travel, and Citi ThankYou Rewards are considered third-party agencies from the hotel's perspective. If you did not book your room directly through a hotel representative or their official website, you are not viewed as the hotel's direct customer.

Therefore, if you require the ability to modify your travel plans on short notice, it’s best to make reservations directly through the hotel.

Utilize hotel points for award redemptions that offer greater flexibility

Typically, you can have your hotel points returned to your account when you cancel award bookings, as long as you do so prior to your stay. Even better, most hotels do not impose redeposit fees on award bookings, which is often not the case with airlines.

Certain properties may require a notice period of at least 48 hours, so be sure to carefully review the fine print before making a reservation.

Consider booking an Airbnb rather than a traditional hotel.

Hotels typically have stricter policies regarding refunds and no-shows, while individual Airbnb hosts set their own cancellation terms.

While you're not guaranteed a refund if you cancel—especially at the last minute—it never hurts to politely ask and provide an explanation. If your reason for cancellation is beyond your control, like a canceled flight preventing you from reaching your Airbnb, it makes sense to communicate that.

Every Airbnb listing features the host's cancellation policy at the bottom of the page.

Opt for rental cars that offer refundable options.

Numerous companies are eager to secure your business when it comes to rental cars. However, the booking process can often include unexpected fees, and it’s not always transparent what charges are mandatory.

Luckily, you can compare prices and typically cancel your rental car reservations without incurring fees since payment is usually made at pickup. Be sure to read the fine print of your specific booking. Additionally, it’s courteous to inform the rental company if you won't be collecting the car you reserved, allowing them to offer it to another customer in need.

In summary

Canceling a trip you were excited about can be deeply disappointing, regardless of the reason. However, adhering to specific guidelines can help lessen the financial consequences of your cancellation. While the emotional loss may linger, your finances can remain more intact.

For Capital One products mentioned on this page, certain benefits may be offered by Visa® or Mastercard® and can differ by product. Refer to the respective Guide to Benefits for more information, as terms and exclusions may apply.