Travel policies list cancellation and interruption as separate benefits with separate limits. They cover different losses and are triggered at different moments in a trip.
The trigger is when the trip stops
Cancellation applies before departure. It reimburses prepaid, non-refundable costs when a covered reason prevents the trip from beginning at all.
Interruption applies once travel has begun. It covers the unused portion of the trip together with the additional cost of getting home early.
The same event can trigger either benefit depending only on whether it happens before or after the traveller departs.
Because the two are separately limited, a policy can be generous on one and thin on the other without that being obvious from the summary.
Cancellation pays back what cannot be recovered
The benefit is limited to money already spent that the supplier will not refund, which is why the insured amount should match prepaid costs rather than total trip spend.
Fully refundable bookings produce no insured loss, so insuring them adds premium without adding any protection.
Airline credits complicate this, because a voucher may count as a recovery even where the traveller wanted the money back instead.
Interruption includes transport nobody planned for
Returning home mid-trip usually means buying a one-way fare at short notice, which can cost considerably more than the original return ticket did.
Interruption benefits are structured to cover that additional transport as well as the forfeited value of the remaining nights and activities.
Some policies also pay to rejoin a trip after an interruption, which is a distinct benefit with its own limit again.
Unused portions are usually calculated on a daily basis from the insured trip cost, so a trip cut short near its end recovers very little.
Covered reasons define both benefits
Neither benefit responds to any reason a traveller might have. Policies list covered causes, commonly illness, injury or death affecting the traveller or a close relative, alongside certain supplier failures.
Reasons outside that list produce no payment however genuine they are, and this is the most common source of denied travel claims.
Reading the list of covered reasons tells a buyer more about a policy than comparing the headline benefit amounts does.
Limits and documentation differ between the two
Cancellation is usually capped at the insured trip cost, while interruption is sometimes capped higher to allow for emergency transport home.
Interruption claims require evidence of what remained unused as well as evidence of the triggering event, which is harder to assemble while actually travelling.
Keeping supplier confirmations and unused ticket records from the outset is what makes the second type of claim payable in practice.