Travel insurance protects travelers in case of problems before or during travel. It can cover just one trip for a few days, or it can cover a longer period for vacationers, like backpackers, who might travel for months at a time. Travelers can buy comprehensive coverage in a package or select only the coverage they need.
There are travel insurance policies specifically for cruises, organized tours or vacations for golfers, skiers, snowboarders or other adventure sports enthusiasts who plan to participate in extreme or hazardous activities while traveling.
If you’re planning holiday travel where snowstorms or this season’s flu might cause trouble, consider the following coverage options:
What does travel insurance cover and when does it apply?
In general, travel insurance covers only the pre-paid, nonrefundable trip expenses, like a flight or pre-booked hotel. Many policies also include medical coverage and coverage for lost or stolen baggage.
Policies vary greatly. The following are general examples only. Read your policy’s certificate of coverage closely to see exactly what it covers.
Trip cancellation and trip interruption. If you can’t begin or can’t complete your trip, you may be eligible for reimbursement for the follows reasons:
- You or a travel companion get sick or hurt before departure
- You or a travel companion get sick or hurt while on the trip
- You’re laid off from work
- You have to work
- Unexpected jury duty
- Bad weather
- Natural disaster
- Act of terrorism
- Airline strike
- Airline bankruptcy
Note that many travel insurance policies will reimburse the cost of your flight, sometimes even under conditions not covered by the airline.
Trip delay, baggage and rental car coverage. Comprehensive policies cover many other events that can occur during travel, including:
- Extra accommodation expenses as a result of a delayed trip
- A missed connecting flight
- Lost luggage
- Rental car collision
Medical coverage. This is especially important for trips abroad. Medical coverage will take care of expenses when:
- You get sick or injured on the trip and need medical care
- You get sick or injured and medical evacuation or transportation to another facility is deemed necessary
- Even, tragically, you die and your body needs to be returned home
Concierge and assistance services. Many comprehensive policies also include non-insurance extras that can help with snafus that might arise on your trip, like:
- You need to rebook flights or hotels
- You lose your passport and need a new one
- Your identity is stolen
Cancel for any reason policies, or CFARs. As the name suggests, these policies allow you to cancel your trip for any reason at all. This type of policy will understandably cost you more.
Which companies offer travel insurance and where do I buy it?
How much does travel insurance cost?
Rule of thumb says travel insurance costs between 5 and 15 percent of the total cost of your trip. The amount varies depending on your age, destination, length of trip, how much is paid in advance and what is covered.
How do I make a travel insurance claim?
Call the phone number that appears in your policy. To accommodate travelers in different time zones, many travel insurance companies provide 24-hour customer assistance.
Sometimes you’ll pay upfront and get reimbursed after filing a claim, like for a flight you already paid for, and other times you can arrange payment directly, like for medical care in a foreign hospital.
What should I look for in a good policy?
Like other kinds of insurance, travel insurance is meant to cover against unforeseen events. If you don’t have a CFAR policy, you won’t be covered for events that were expected, like bad weather conditions that were predicted when you purchased insurance.
Your policy covers only what it says it covers. If something is not listed, it’s not covered. Don’t assume that you will be covered for everything. For example, if you are planning on doing extreme sports, like rock climbing or scuba diving, you will likely need additional adventure sports coverage.
Your policy may have very narrow definitions. For example, it may cover terrorism, but that may mean that you can only cancel your trip if terrorist activity is occurring close to your hotel. Read your policy carefully.
Finally, be aware that pre-existing conditions can affect medical coverage, in which case you’ll probably need to get an exclusion. Learn more about pre-existing conditions.
To buy or not to buy travel insurance
You may want to purchase a policy if:
- You’re taking a cruise or an operated tour. Some tours require trip insurance.
- You’re traveling abroad and your trip is expensive.
- Your current auto, home and medical insurance policies don’t adequately cover events that could occur on your trip. Be aware that even medical insurance that covers foreign medical care may have many restrictions.
- Your health is not great.
- You have family members at home in bad health who may require your presence on short notice.
- Your flight, hotel, tour packages, et cetera cancellation or rebooking policies are very strict. Make sure you read them carefully.
You may choose to skip insurance if:
- You’re traveling domestically and you don’t expect large expenses, like if you’re staying with a friend.
- Your existing auto, home and medical insurance policies adequately cover events that could occur on your trip.
- The credit card that you booked the trip on provides travel insurance. Some include car rental and lost baggage protections.
- Your flight, hotel, tour packages, et cetera have forgiving cancellation or rebooking policies.