Making travel plans always comes with some degree of uncertainty. Maybe you’re worried that something might happen at your destination or that something will come up and you’ll have to cancel your trip. Maybe you’re not sure what you would do if you were to have a medical emergency on your trip and you want to have travel help ready if you need it.
Travel insurance can provide a safety net allowing you to book a long-awaited trip with ease. Travel insurance is designed to cover many of the top concerns and financial risks of traveling including unexpected illness, missed flights, canceled tours, lost baggage, and theft.
While travel insurance might not make sense for every kind of trip, it’s a good idea for international trips and more expensive domestic excursions. A good comprehensive travel insurance plan can keep you from losing thousands of dollars in non-refundable trip costs because of an unforeseen event.
A few important things to know about travel insurance:
- Benefits can vary greatly by the plan. It’s important to choose a plan that fits your unique needs and budget.
- Travel insurance isn’t designed to cover every possible scenario. Many plans only cover specific situations outlined in your policy. Read your policy’s fine print to understand what exactly is and isn’t covered.
- Travel insurance is designed to only cover unexpected and unforeseeable events.
Types of Coverage
Travel insurance policies vary widely in the types of coverage they provide and the amounts they cover. You can choose between budget-friendly plans that only include trip cancellation, trip interruption and trip delay benefits, comprehensive policies with extensive medical benefits, and plans that cover nearly every situation imaginable.
Here are the common features included in a comprehensive travel insurance policy:
Trip Cancellation, Interruption, and Delay Insurance
Most travel insurance policies provide coverage for trip cancellation, interruption, and delay. Each of these coverage types is slightly different but can be extremely beneficial if your travel plans need to be changed. What is covered under these policy provisions will vary depending on the type of plan you choose to purchase.
Trip cancellation coverage reimburses a traveler for prepaid, nonrefundable expenses if the trip is cancelled before you begin. Trip cancellation coverage can reimburse up to 100% of a traveler’s trip cost if the cancellation is due to a covered reason. Common covered reasons include unexpected personal illness, death of a family member, job loss, and unforeseen weather issues.
Trip interruption insurance can reimburse you for a portion of a trip if it is unexpectedly cut short and the traveler needs to return home early for a covered reason. This coverage may also cover extra accommodations and/or flight changes. Insurance providers vary on acceptable interruption causes and the amount of refund available. The most common covered reason is unexpected injury or illness of the traveler, travel companion, or a family member,
Trip delay coverage can provide reimbursement for expenses such as hotel accommodations, meals, and transportation if you are delayed during your trip. Certain requirements need to be met in order to qualify for delay coverage, but common reasons are inclement weather and airline delays.
Travel insurance providers vary greatly on acceptable cancellation causes but mostly only cover unforeseen events. If you wait to buy travel insurance until a hurricane is barreling towards your destination, the hurricane would no longer be viewed as an unforeseen event and would be ineligible for coverage.
If you want the most protection possible, consider upgrading to a Cancel for Any Reason (CFAR) Coverage. With a CFAR plan, you can cancel your trip for any reason prior to departure. This benefit reimburses travelers up to 75% of nonrefundable trip costs. In order to be eligible for this upgrade travelers must purchase insurance within a set amount of days from the first trip payment and insure all trip costs.
Emergency Medical Insurance
Many travel plans include coverage for emergency medical services. Travel medical insurance can cover ambulance service, hospital costs, surgery, and medication costs. Some plans also include emergency dental services such as lost fillings.
Depending on where you’re traveling, you may need a travel health insurance policy. First, check with your regular health insurance plan to see what kind of coverage you’ll have at your destination. Many U.S. insurers only provide limited coverage abroad and very few will cover emergency evacuation.
Even if your health insurance company provides international coverage, you may still want to consider a travel medical insurance plan. In an emergency situation, travel medical insurance can help facilitate care and coordinate treatment if you become ill or injured in a location without adequate healthcare.
Emergency medical insurance can also be helpful when you’re traveling domestically. Many personal health insurance plans have higher copays and limited out-of-network coverage outside of your home area and a travel medical insurance policy can help cover items not covered by your primary plan.
Travel medical insurance may be included in a comprehensive travel insurance policy or can be purchased on its own. Frequent travelers can purchase a policy that provides coverage for an entire year rather than purchasing multiple individual policies throughout the year. These types of plans are great for students studying abroad or individuals on frequent business trips.
Just keep in mind that travel insurance plans often exclude pre-existing conditions, complications due to pregnancy, and injuries related to adventure sports, such as skydiving, rock climbing, or bungee jumping, from coverage. You may need to seek out a special travel insurance policy if you have a pre-existing condition or if you plan on engaging in extreme sporting activities during your travels.
Medical Evacuation Coverage
Many travel insurance policies also include medical evacuation coverage. This coverage provides assistance in the event that you need to be evacuated immediately to a medical center due to severe illness or injury. This type of coverage is especially important for those traveling to remote areas or on a cruise. If a medical emergency were to occur and you needed to be transported to the nearest medical facility by helicopter or airplane, you would be left with thousands of dollars in bills without insurance.
Lost or Delayed Baggage
Baggage loss and delay coverage is included in many comprehensive travel insurance policies and provides reimbursement up to a specific amount determined by your plan. This coverage is typically secondary to baggage compensation provided by an airline or other carrier. Some plans also provide funds for purchasing clothing and other necessities while you wait for your delayed baggage to arrive.
Your renters or home insurance may also cover personal items while you travel. It is a good idea to review your current policy to avoid purchasing a benefit you may already have.
Most comprehensive travel insurance policies all provide some level of theft protection. This can include theft of cash, loss or theft of travel documents such as your passport or credit cards, and some electronics. Before purchasing a policy, make sure to inquire about maximum reimbursement levels for high-value items like cameras, laptops, and jewelry. You may also want to check with your renters or home insurance and see how your personal items are covered while traveling abroad.
Some comprehensive travel insurance plans can also provide 24-hour assistance hotlines, accidental death and dismemberment insurance, rental car coverage, and more.