One of the more difficult preparatory decisions to be made prior to departure on holiday is whether or not to purchase travel insurance and if so, for what amount. Few would argue that once the floodwaters rise, only the insured would have a peaceful feeling. With the rising cost of luxury travel, it is wise to have some protection, since the loss could be severe, much greater than the initial cost for the insurance.
The more difficult question perhaps is for how much to insure. The potential penalty and loss of funds due to a cancellation is affected by several factors. How soon before departure did one cancel. Is the tour in a Third World country, most of which are far less likely to return funds. Did the accommodations include a cabin on a ship, a suite on a train or a tent in a private safari camp. Each of these is far more difficult to sell in a compact period of time. Near time of departure and particularly once the tour has commenced, the penalties are likely to be severe, certainly more than what it would have cost to insure. The greater the protection, the less the amount of concern.
The ultimate decision should rest upon whatever the amount of insurance it will take to make the traveler feel comfortable about the potential loss. When searching for that comfort zone, it truly becomes a personal decision. Although First Cabin does its utmost to recover funds, it cannot be the guarantor.
One fact is a certainty and that is once the traveler departs on tour, the percentage increases dramatically. Sixty or ninety days before and the losses can be minimalized, however, the closer the cancellation to the departure date, worse thereafter, the penalties become excessive. One reason is that the luxury hoteliers, particularly within the Third World are normally positioned where they receive very little "walk by traffic" and the local populace would seldom be in a position to afford the accommodation.
Caveat: One important facet to note is that most travel insurance companies require that the full payment for a policy be sent within 7 days after a tour deposit is made if there is a pre-existing condition concerning the health of the traveler or any family members. It is imperative that one discuss this topic with the insurer in order to comply with their specific requirements for full coverage.