Everything You Need to Know About International Travel Insurance
Travel insurance is temporary coverage designed to protect you from costs and losses you may experience while traveling. You may not need travel insurance for quick domestic or inexpensive trips, but if you’re traveling internationally, it can be a financial savior if the unexpected were to happen.
Typically, international vacations cost much more than domestic ones and travel insurance can provide some sense of security when you’re making pricey reservations and you don’t necessarily know what the future may hold. Having travel insurance can protect you from the unexpected including natural disasters, canceled flights, personal injury or sickness, baggage loss, and a dozen other covered reasons your trip may be derailed by no fault of your own.
Types of International Travel Insurance
Travel insurance is typically sold as a package and includes many different categories of coverage. Benefits and terms can be customized to fit your needs. The main categories of international travel insurance coverage include trip cancellation and trip interruption coverage, medical expense coverage, and emergency medical evacuation. Here are the most common types of coverage.
Trip Cancellation Coverage
International travel insurance plans typically include trip cancellation coverage. Trip cancellation coverage reimburses travelers for pre-paid, non-refundable expenses if you need to cancel your trip prior to departure. This can cover things such as non-refundable airline tickets, prepaid hotel reservations, cruise bookings, and other non-refundable travel activities. Standard travel insurance does not cover simply changing your mind about traveling. For that, you’ll need Cancel for Any Reason Coverage (CFAR), and there is more on that below.
Trip cancellation insurance only reimburses expenses if you need to cancel your trip for a covered reason. Each insurance company defines its own covered reasons, and these typically only include unforeseen circumstances such as sickness or death of a family member, job loss, unexpected weather events such as hurricane damage to your destination only weeks before your trip, and conflicts such as jury duty.
Trip Interruption Coverage
Trip interruption coverage is similar to trip cancellation coverage, but it covers interruptions to your travel plans once you’ve started your trip. If an unexpected event happens, trip interruption coverage will reimburse you for the lost portion of your trip. Trip interruption insurance may also cover additional expenses incurred for last minute flights home. Just like trip cancellation insurance, trip interruption coverage only covers travel changes due to a list of covered circumstances.
International Travel Medical Insurance
Depending on what international travel policy you choose, you may need a separate travel health insurance policy. Regular health insurance plans are unlikely to cover medical expenses outside of your home country. So, if you’re traveling internationally, you’ll want coverage for medical emergencies or illnesses that occur outside your existing health insurance zone. In fact, the U.S. Centers for Disease Control and Prevention recommends “getting travel insurance to cover yourself against accidents or illness while you’re abroad.”
Travel medical insurance provides coverage for medical emergencies, accidents, and medical evacuations. Paying out of pocket for medical services in another country can be very expensive even if the country you are traveling to has a nationalized healthcare system. Just be sure to consult your plan about coverage regarding any pre-existing medical conditions to make sure you’re adequately covered.
International Medical Evacuation Insurance
If you are traveling to a remote destination or traveling to ski, hike, or climb, consider purchasing additional medical evacuation insurance. This is included in some travel medical plans or can be purchased separately. Medical evacuation insurance will cover emergency transportation to a medical facility and can also help coordinate care and rescue, which can be invaluable in an unfamiliar or remote location.
Keep in mind that medical evacuation insurance may not cover particularly risky activities such as skydiving, bungee jumping, or mountain climbing. Be sure to read the fine print and make sure you’ll be covered if you’re participating in an activity an insurer may deem dangerous. Before you purchase a policy, make sure your insurer explains what is exactly covered in an emergency situation.
Cancel for Any Reason (CFAR) Coverage
Many standard travel insurance plans allow you to upgrade to CFAR coverage for an additional fee. Unlike standard trip cancellation insurance, CFAR coverage will reimburse you for a portion of non-refundable and pre-paid trip costs if you cancel for any reason. A CFAR policy can protect you from typically uncovered reasons such as epidemics, government travel bans, unease about traveling, or simply changing your mind.
Travelers opting for CFAR coverage need to insure 100% of their trip costs and purchase the plan within a set amount of days from their first trip payment, typically within 10 to 21 days. Depending on the plan, CFAR coverage reimburses from 50% to 75% of non-refundable and pre-paid trip costs if the trip needs to be canceled. Trips must be canceled within a set time before departure, typically 48 hours, in order to be eligible for coverage. You’ll still want to make sure your trip cancellation reason isn’t covered under your standard plan, in that case, you’d be covered for 100% of trip costs.
Additional International Travel Insurance Options
Travel insurance can also provide coverage for lost bags and baggage delays, accidental death, hazardous sports such as SCUBA diving, rental car coverage, and theft protection. Some plans even will provide a hotel room if your flight is canceled or if a travel delay messes with your schedule reservations or connections.
How Affordable is International Travel Insurance?
International travel insurance is generally inexpensive when compared to the potential risks of canceled trips, medical emergencies, or other unexpected events. According to the U.S. Travel Insurance Association, comprehensive travel insurance typically costs between 4% to 8% of a total trip. CFAR coverage typically adds 40% to your standard travel insurance price. The actual cost is influenced by the age and number of people traveling, how long the trip is and your destination, the overall cost of the trip, and any additional coverage.
How to Purchase International Travel Insurance
Once you’ve decided to purchase an international travel insurance plan, you’ll want to shop around to find the best plan for you on a travel insurance comparison site. Travel insurance policies vary wildly in what coverage they provide, and you’ll want to select a plan based on your unique needs.
You may want to first check what kind of coverage you already have through a credit card or your current health insurance plan and then decide on what additional coverage you would like. Just make sure to read the plan details closely so you understand what is and isn’t covered.
When to Buy International Travel Insurance
The best time to purchase international travel insurance is soon after you book the first part of your trip. That way you may be eligible for early purchase benefits including CFAR coverage and pre-existing conditions waivers. Some travel insurance plans can be booked right up until the day before departure, but certainly not while you are already on your trip.