Your guide to travel insurance

If you have a trip coming up, travel insurance could be a good investment. Travel insurance can reimburse your prepaid trip expenses if something goes wrong, such as a canceled flight due to bad weather. Let’s explore the benefits of travel insurance, including what it covers, how much it costs, and who may need it.

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Travel insurance can protect you from the financial losses of unexpected travel issues, like trip cancellations, trip interruptions, lost baggage, and emergency medical care. Your policy will reimburse your qualifying prepaid and non-refundable costs, up to the policy’s limit.

Travel insurance is usually a good thing to have if you’re taking a trip abroad or are prepaying for big-ticket items, like a cruise or first-class airline tickets. Really, anyone who wants peace of mind by protecting their prepaid travel costs can benefit from travel insurance.

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Travel insurance will cover certain costs if a qualifying event cancels, interrupts, or disrupts your vacation. Here are the main types of coverage typically included with a comprehensive travel insurance policy.

If you’re forced to cancel your trip before departure because of a covered reason, like an unexpected illness, your policy can reimburse your prepaid costs. Many trip cancellation insurance policies can cover up to 100% of your prepaid and non-refundable expenses, but some policies provide even more coverage.

Trip interruption insurance applies to incidents that occur during your trip. If you have to cut the trip short because of a qualifying reason, such as a mandatory evacuation, your travel insurance policy could cover your prepaid expenses.

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The emergency medical expenses portion of a travel insurance policy will cover your medical bills if you get sick or injured while traveling. This type of insurance is especially important because it can help pay for medical care in countries where your U.S. health insurance policy doesn’t apply.

Medical evacuation and repatriation insurance

Travel insurance may cover the cost of emergency medical evacuation if you get sick or injured during your trip, and you need to be transported to a hospital that can treat your condition. If a medical professional determines that you need to travel back home to receive adequate medical care, the policy can also pay for medical repatriation.

Lost and delayed baggage insurance

If your suitcase gets lost or delayed during travel, your policy can cover the cost of essentials until your bag arrives, or reimburse you for the lost items inside. It may also cover personal items that get stolen or damaged during your trip.

If a delay disrupts your travel for several hours or more, your travel insurance may cover necessary expenses, like a hotel or food. For instance, if your flight is delayed until the next morning due to severe weather at your destination, your travel insurance policy may cover the cost of an overnight hotel stay and meals at the airport.

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Travel insurance allows you to recoup the money you have already spent when your trip is affected by a covered reason. Here are some examples of situations that your travel insurance would typically cover:

• Medical problems: Your policy may cover your expenses if you or a travel companion gets sick or injured and it prevents you from traveling. If your doctor orders you to stay home, that’s also covered.

• Family emergencies: If you have a family emergency, like the death or hospitalization of a close family member, your travel insurance policy might reimburse your travel expenses if you have to cancel or leave the trip early.

• Severe weather: Travel insurance normally covers travel issues related to severe weather and natural disasters, either at home or at your destination.

• Travel issues: If your travel gets canceled or delayed because of bad weather, a mechanical failure, or a carrier problem, like an airline strike, your travel insurance policy should cover your expenses.

• Work situations: Travel insurance usually covers cancellations due to work-related issues, like getting laid off unexpectedly. For active-duty military, this includes deployment.

• Legal responsibilities: Reporting for jury duty and mandatory court appearances are covered events for travel insurance.

• Safety concerns: Your travel insurance policy may cover your non-refundable expenses if you have to cancel your trip because of safety reasons, like a mandatory evacuation or a recent terrorist attack at your destination.

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Travel insurance covers many unexpected events that may occur before or during travel, but it doesn’t cover everything. Here are some examples of situations that aren’t normally covered by travel insurance:

• Cancellations for any reason: Travel insurance doesn’t cover trip cancellations for any reason, like rain in the forecast before a beach vacation or developing a fear of flying. Many insurers offer optional cancellation for any reason (CFAR) coverage for an extra fee, which will cover any situation, even if it’s excluded from your base policy.

• Losses related to illegal activities or intoxication: Travel insurance policies almost always exclude losses or travel disruptions related to illegal activities or incidents that occurred while you were under the influence of drugs or alcohol.

• Preexisting medical conditions: If you have any preexisting medical conditions, and you need to see a doctor while traveling abroad, travel insurance doesn’t usually cover your medical expenses. However, you can often add a waiver to your policy that would allow you to get coverage for medically necessary treatment.

• High-risk sports and activities: Most travel insurance policies exclude coverage for things that occur while participating in high-risk activities, like mountaineering, rock climbing, or skydiving. If your trip involves these types of sports, many insurers offer a sports and activities add-on that will cover them.

• War and civil unrest: Although war, political unrest, and civil unrest could be considered safety concerns, these situations are not typically covered by travel insurance. Oftentimes, these scenarios are considered foreseeable events, rather than sudden and unexpected problems. Therefore, they are excluded from coverage.

• Epidemics and pandemics: Travel insurance typically excludes trip cancellation due to known epidemics and pandemics, including COVID-19. So, if you planned a trip to a country that was experiencing an epidemic and wanted to cancel, your travel insurance policy wouldn’t cover it, unless you had CFAR coverage.

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The cost of travel insurance is roughly 4% to 8% of your total trip cost. That means if you paid $5,000 up front for your trip, you could pay anywhere from $200 to $400 to insure your vacation. If you spent $10,000, your premium could range from $400 to $800.

In addition to the cost of your trip, travel insurance rates can also depend on these factors:

• Age of insured travelers

• Number of insured travels

• Trip length

• Destination

• Type of coverage, including add-ons

• Coverage limits

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Travelers have a few options for getting travel insurance. Here are the main ways that you can get coverage for a trip:

• Insurance company: Many people choose to purchase travel insurance directly through an insurance company. Travel insurance companies offer comprehensive coverage for many of the risks you might face during your trip.

• Travel carrier: If you want coverage for a prepaid flight, train ticket, or cruise, you might be able to get travel insurance through the carrier. This can be a good option if transportation is the only significant nonrefundable expense you’ve paid.

• Tour company: If you’re booking a vacation through a tour company, you might be able to add insurance coverage to your reservation. While this will only cover issues like tour cancellation and not broader travel risks, it could be a cheaper option.

• Credit card: Some credit cards include automatic travel insurance benefits for cardholders. It’s worth checking if your credit card offers any travel protections, but keep in mind that these typically only cover trip expenses paid for using the card.

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The right travel insurance policy is different for everyone. It depends on factors like the type of trip you’re taking and how much risk you’re willing to accept. Before you buy travel insurance, here are some things you should consider:

• Think about your coverage needs: Your coverage needs will determine the best travel insurance policy for your trip. For example, if you’re traveling internationally, you should choose a policy with excellent medical coverage, because your health insurance plan probably won’t work. If you’re planning to participate in any high-risk sports, you can likely benefit from adding an optional adventure sports or activities endorsement.

• Find out what coverage you already have: It’s a good idea to find out what travel insurance coverage you might already have before you purchase a separate travel insurance policy. Check your credit card to see if you have any built-in travel protections. You should also find out if your airline, cruise operator, or tour company offers a refund for cancellations or other unforeseen issues that are out of your control.

• Understand the exclusions: All travel insurance policies have some exclusions, whether you’re getting coverage through an insurance company, an airline, or somewhere else. Read the fine print and check the exclusions so you know exactly what’s covered, what’s not covered, and how much coverage the plan will provide.

• Get travel insurance quotes: The cost of travel insurance depends on many factors, including the insurance company. It’s recommended to get several travel insurance quotes to see which plan will provide the coverage you want at the most affordable price.

• Compare plans from multiple insurers: Comparing multiple travel insurance plans will help you find the best plan for your needs. For instance, some plans might include rental car coverage, which could be beneficial if you’re planning to rent a car on vacation.

Travel insurance is worth it for many people, but it depends on the type of trip you’re taking, the destination, and your risk tolerance.

For example, travel insurance is often beneficial for international trips and expensive vacations, particularly when most of your expenses are prepaid. That way, you have peace of mind knowing that you can recoup some of your money if you experience a covered issue while traveling.

However, travel insurance may not be necessary for short, domestic trips or trips that are fully refundable. Depending on your situation, the travel insurance protections you have through your credit card or a travel carrier might provide sufficient coverage.

Yes, you can add more than one person to a travel insurance policy. The maximum number of travelers you can add depends on the insurance company and plan. Some travel insurance plans automatically cover kids under a certain age for free.

Yes, you can purchase travel insurance after you book a nonrefundable trip or flight, but it’s best to purchase travel insurance as soon as possible after booking. If you want to add optional coverage, like a cancel for any reason (CFAR) waiver, many insurers require you to add it within a certain time frame after making your initial deposit.

The best travel insurance company is different for every traveler. The right insurer will depend on your trip location, trip type, and coverage needs. You should aim to compare at least three or four travel insurance companies to find the best one for your situation.

Most travel insurance policies only cover one trip at a time. However, if you have multiple trips planned during the year, some insurance companies sell annual travel insurance plans. An annual plan will cover all the trips you take during the year.

Tim Manni edited this article.