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Written byDaria Kelly Uhlig
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Licensed Realtor with 10+ years in personal finance content
Contributor to Nasdaq and USA Today
Daria is a licensed Realtor and resort property manager specializing in personal finance, real estate, and insurance topics. In her spare time, she practices photography.
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Edited byChris Schafer
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15+ years in content creation
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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Updated October 3, 2023
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Table of contents
Table of contents
Travel insurance is a “peace of mind” policy that protects you in the event of emergencies and mishaps while traveling. In addition to covering non-refundable expenses, such as lost hotel days due to a mandatory hurricane-related evacuation, it can also help pay for associated medical costs and lost personal property. A travel insurance policy will typically cost you 4% to 10% of the trip’s overall cost, depending on the coverage.
No one expects their long-awaited vacation to be derailed by these kinds of events, just as you don’t expect to have a car accident or house fire. But when they happen to you, insurance offsets the financial loss.
Here’s what you need to know about travel insurance.
What does travel insurance cover?
The exact coverage boundaries of trip insurance depend on your policy.[1] But any travel policy should protect you against three categories of losses: non-refundable travel costs, such as airfare and hotel bills; costs related to a medical emergency; and losses related to the personal property you bring on your trip.
While some coverages are standard, others are optional — you pay extra to add them to your policy.
Important Information
Not all travel protection is travel insurance. Insurance policies are often bundled with non-insurance products, like cancellation fee waivers and travel assistance services, according to the National Association of Insurance Commissioners (NAIC). State insurance departments have no oversight over non-insurance product providers, which can limit your recourse if you fail to receive the coverage you pay for.
Trip cancellation, interruption, or delay
Trip cancellation insurance reimburses you for any non-refundable expenses you’ve already paid if your trip starts late, ends early, or needs to be canceled because of a covered emergency.[2] Covered emergencies vary by insurance company and policy, but they typically include:
Illness, injury, or the hospitalization or death of a family member, even if they’re not traveling
Transportation delays and cancellations
Illness or death of host
Jury duty
Mandatory evacuation due to severe weather or a natural disaster
Military duty
Job loss
Adoption
Cancellation coverage usually covers 100% of your prepaid non-reimbursable costs. Interruption coverage may provide more than 100% coverage of prepaid costs if it pays for your transportation home. Delay coverage typically pays a flat daily rate for lodging, transportation, and other costs you incur due to a covered delay.
Baggage and personal effects loss or delay
This coverage reimburses you for baggage and other personal items that get damaged, lost, or stolen.[1] However, it’s secondary to your homeowners or renters insurance — if you have either of those policies, you must submit your claim to that insurer first. Travel insurance will pay for what homeowners or renters insurance doesn’t cover.
Reimbursement for baggage delays covers the costs of any essentials you need if you’ll be without your baggage for a certain period of time, such as 24 hours.
Travel medical insurance
Travel medical insurance covers the cost of treatment for medical and dental emergencies that happen while you’re traveling. These emergencies might include physician and nursing care, hospital bills, ambulance fees, and prescription medications.[2] Dental coverage usually has a much lower limit than medical care — $500 versus $10,000, for example.
If you have your own health insurance policy, your travel medical insurance coverage will serve as secondary insurance.
Emergency medical evacuation
Quality medical care isn’t always available in remote areas, and most health plans, including Medicare, won’t pay for transportation to a properly equipped healthcare facility. These plans also won’t pay for transportation to the U.S. in the case of death or medical necessity. Instead, emergency medical evacuation coverage pays these costs.
Good to Know
Travel insurance companies also usually cover the cost of a travel companion to stay with you while you’re hospitalized.[3] If you’re traveling alone with your children when your emergency happens, this coverage might also reimburse airfare to send them home.
Missed trip connection
A missed connection can force you to start a cruise or travel tour late, and you’ll likely incur additional transportation and lodging expenses to meet the ship or group after it’s already underway. Trip delay and interruption policies cover common carrier issues and weather-related delays, but if you don’t have that coverage for some reason, missed-connection insurance will pay for the added expenses.
Cancel for any reason (CFAR)
Cancel-for-any-reason coverage is usually an add-on to your travel insurance policy. It overrides standard coverage restrictions for covered reasons to cancel your trip.
However, CFAR coverage doesn’t usually reimburse 100% of your prepaid non-refundable expenses like cancelation coverage does. Instead, you’ll be out 25% to 50% of those costs, according to the NAIC.[1]
Comprehensive
Unlike stand-alone travel medical insurance, which only covers medical expenses your primary health insurance doesn’t cover while you travel, comprehensive travel insurance includes more coverage.
In addition to covering medical expenses, comprehensive travel insurance also provides trip delay/interruption/cancelation coverage and coverage for lost, damaged, or stolen baggage and personal belongings and other non-medical events.
Common travel insurance exclusions
Travel insurance doesn’t cover everything, and the following are common exclusions from travel insurance coverage:
Pre-existing conditions: Standard travel insurance medical coverage doesn’t cover pre-existing medical conditions.[1] But higher-level plans might if you purchase the insurance within a certain time frame after booking your trip or before making your final payment. You’ll also need to be healthy enough to travel when you leave for your trip.
Civil and political unrest at the travel destination: Losses due to civil and political unrest aren’t covered by standard travel insurance policies. Cancel-for-any-reason coverage might reimburse losses from delays or interruptions, however.
Pregnancy and childbirth: Trip insurance typically doesn’t cover cancellations due to pregnancy, childbirth, or routine medical care for either.[4] Emergencies, on the other hand, might be covered. These would include conditions such as pre-eclampsia or complications during delivery.
Pandemics: Fear of a pandemic or epidemic is usually excluded from trip delay/interruption/cancelation coverage. These are foreseeable events in many cases, so even if you decide to travel but become ill as a result, you won’t be covered. That said, some trip insurance companies have made allowances for COVID-19.
Risky activities: Your travel insurance is unlikely to cover you if you’re injured in a risky activity, like skydiving, rock climbing, or bungee jumping.
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How COVID-19 Travel Insurance Works
Where to buy travel insurance
Travel insurance is available through many different outlets, including:
Airlines
Purchasing travel insurance through your airline when you book your travel is convenient. However, it limits you to the insurance company the airline partners with. If you go this route, make sure the policy isn’t limited to flight insurance if your intent is to purchase comprehensive coverage.[5]
Travel agent
You might be able to purchase travel insurance from the travel agent who books your vacation. Remember, however, that your travel agent is not a licensed insurance agent. They can relay the information contained in the policies but can’t advise you on coverage.
Vacation rental company
As with airlines, vacation rental companies and online travel agents, like Airbnb, typically offer travel insurance from a single insurance company. Alternatively, they might provide travel protection services that aren’t insurance.
Credit card company
Travel insurance purchased through your credit card issuer provides the same kind of comprehensive coverage other insurers offer, but the only expenses likely to be reimbursed are the ones you charged to the card.
Direct from company
Buying travel insurance straight from the insurer, whether it sells travel insurance exclusively or handles many lines, is the most flexible option. You can research the various levels of protection each offers and compare rates and coverages. And if you have a question, you can pick up the phone and talk to an agent.
Comparison site
Insurance-comparison sites are the most efficient way to shop for insurance. You can get quotes from several different companies, compare them side by side, and purchase the best choice for you, all without leaving the platform.
Travel insurance coverage FAQs
Unless you’re a frequent traveler, travel insurance is probably not something you’re very familiar with. And you’re not alone. First-time and casual travelers frequently ask the following questions before purchasing a policy.
When is trip cancellation covered by travel insurance?
Trip cancellation is covered when it results from a covered emergency that keeps you from traveling, such as illness or injury, the serious illness or death of a family member, job loss, military service, or jury duty. Cancellations because of adoption or the death of your host are usually covered, too.
What types of medical expenses can travel insurance cover?
Travel insurance can cover doctor and hospital visits, ambulance costs, and prescription medications. It will also cover the cost of travel to the nearest location that provides the care you need if you have medical evacuation coverage. However, travel insurance medical coverage is secondary to health insurance, which means it only pays for what your health insurance doesn’t.
How much travel insurance should you buy?
That depends on many factors, including the type of destination, the value of your luggage and personal belongings, the coverage provided by your medical insurance (which is your primary insurance while you’re traveling), and the amount of risk you’re comfortable accepting in terms of policy exclusions. An insurance agent can help you identify your needs and customize coverage to provide adequate protection.
Is travel insurance worth it?
Whether travel insurance is worth the money depends on where and how you travel. If you’re driving to a hotel within the United States that allows last-minute cancellations, travel insurance might be unnecessary. On the other hand, if you’ve purchased expensive, non-refundable airfare to a foreign country and a hotel booking, the travel insurance could be well worth the cost of the premium, which is usually 4% to 10% of the cost of your trip.
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Popular articles
Sources
- NAIC. "Travel Insurance."
- General Global Assistance. "Travel Insurance Coverage Details, Covered Reasons and Helpful Tips."
- USA Today. "What is medical evacuation insurance?."
- LA Times. "Guide to Traveling While Pregnant: Pregnancy Travel Insurance."
- New York Times. "Travel Insurance: What It Covers and When to Buy It."
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Daria Kelly Uhlig
Daria Uhlig is a freelance writer and editor with over a decade of experience creating personal finance content. Her work appears on USA Today, Nasdaq, MSN, Yahoo Finance, Fox Business, GOBankingRates and AOL. As a licensed Realtor and resort property manager, she specializes in real estate topics, including landlord, homeowners and renters insurance. In her spare time, Daria can be found photographing people and places on Maryland's Eastern Shore. Connect with her on LinkedIn.
15+ years in content creation
7+ years in business and financial services content
Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.
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