Planning a big event? A little extra financial protection might not be a bad thing right now.
If the COVID-19 crisis taught us something, it’s that life can change in the blink of an eye. Plans once considered set in stone can be canceled without warning. In fact, countless weddings, family reunions and celebrations have been canceled over the past five weeks due to social distancing mandates.
If you are planning a major event such as a marriagefamily reunification or quinceañera, chances are you’ll spend a lot of money to achieve this – maybe even a lot of your savings. But even if this event is scheduled for a year or two in the future, who’s to say we won’t be social distancing then? Or what if another unexpected crisis disrupts your event plans? What happens if a member of your family gets injured or becomes ill, requiring a change of schedule? Or what if a weather event ruins your plans or causes travel issues that prevent guests from attending?
None of these scenarios can be ruled out, so it might be worth considering event cancellation insurance, especially if you’re investing a lot of money for the event in question.
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How event cancellation insurance works
Event cancellation insurance is similar to a trip or travel insurance. You take out a policy that reimburses you for financial losses if things related to your event go wrong. This could include the withdrawal of a supplier at the last minute. Or it could cover your losses if you have to cancel your event and lose deposits or non-refundable payments you’ve already made to vendors or the venue itself.
Of course, your policy will have an outside coverage limit, which is the maximum amount you’ll be reimbursed if your event doesn’t go as planned, or if you have to postpone or cancel altogether. You may also have to pay a deductible before your policy pays your claim, similar to a deductible you would pay for a claim against your auto insurance or home insurance.
How far in advance should event cancellation insurance be taken out?
You can usually purchase event cancellation insurance up to 24 months before the event. You’ll need to purchase a policy at least 14 days before the event, according to Allstate.
How much does event cancellation insurance cost?
The cost of your policy will depend on a number of factors including the amount of cover you need and the location of your event. Progressive reports say you can insure a wedding for as little as $66, but that may be a low estimate. Your best bet is to get quotes from different insurance companies if you are interested in purchasing a policy.
You never know when your big plans might go wrong, even if the world isn’t in the throes of a pandemic. Just as you would probably buy travel insurance for a big trip, you should also consider buying cancellation insurance for a big event you are hosting. A modest premium could give you great peace of mind.
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