This simple guide will show you exactly how travel insurance protects you and your money16 October 2021
So, what does travel insurance cover?
Here’s the very short answer:
Travel insurance covers lost money from canceled trips, emergency medical expenses, evacuation costs, baggage & delays, and 24/7 assistance.
Here are the 5 things travel insurance covers:
This is the #1 concern with most travelers.
When planning a trip you pre-pay for many expenses like airline tickets, hotel rooms, cruise fare, Disney tickets, tour packages, and more.
If these expenses are pre-paid and non-refundable, you risk losing it if something goes wrong. Your child could get sick, a parent could pass away, a hurricane could strike. Any of these events could cause you to cancel your trip and lose all of that money.
Trip Cancellation Coverage reimburses you for pre-paid, non-refundable expenses if you need to cancel your trip before you depart. Insurance companies provide a list of covered reasons for trip cancellation, but here is an overview of the most common reasons travelers need to cancel.
Covered reasons to cancel your trip include:
By far, the most common reason someone getting sick or a family member passing away. This is especially common now with the Covid-19 pandemic.
Note: There is also an optional upgrade called Cancel For Any Reason (CFAR) coverage, which will allow you to call off your trip for any reason, as long as you meet the plan criteria.
Trip Interruption Coverage is similar to cancellation coverage, but covers you while you are on your trip for the same list of covered reasons.
If something happens and you are required to return home, insurance will reimburse you for the lost portion of your trip…as well as any additional expenses to get back home.
This is crucial, and often overlooked.
Most people think they are covered for medical emergencies if they already have existing health care insurance. Within the United States, that will likely be true.
But when you travel abroad, your health insurance from home might not travel with you. Most providers do not provide coverage, and Medicare never covers you abroad.
Would you feel comfortable having a family member risk inadequate medical care in a foreign country?
For cruises, your health insurance from home may not cover you if you’re traveling on a foreign-flagged ship (which includes most cruise ships).
Medical Expense Coverage will cover you for accidents and emergency medical and dental care when you travel.
Even if your plan from home covers basic emergency care overseas, your current health insurance provider will almost certainly NOT pay to evacuate you and repatriate you back to the U.S.
Medical emergencies can be scary, and the travel medical coverage explained above covers the medical costs.
But how do you get home? What if you need a special medical flight, or a rescue from a remote location?
Emergency Evacuation Coverage will pay for emergency evacuation expenses such as airlifts and medically equipped flights back home, and oftentimes will transport you to the hospital of your choice for care.
Evacuation expenses can be devastating. An ambulance to the hospital, an airlift to a more adequate hospital, getting you back home on board a medically-staffed flight afterwards…evacuation expenses can easily cost $100,000.
These coverage are for the “smaller things” that are nice to have. Again, the list is not complete but it will give you an idea of some additional coverages.
Baggage Coverage can reimburse you for your personal belongings if your luggage is lost, stolen or damaged not just on your flight, but on your entire trip.
Baggage Delay Coverage provides money to buy essential items until your delayed bags arrive, such as a toiletry kit, a swimsuit, or another change of clothes.
Travel Delay Coverage provides reimbursement for additional expenses if your flight is delayed, such as an extra night in a hotel or a meal at a restaurant.
This is about having a ‘lifeline’ to call when something happens.
Medical emergencies, stolen baggage, lost passports, cancelled flights. Every travel insurance company provides 24/7 support for all of these needs.
This service is most important when you have a medical issue. It can be scary to have medical issues abroad where language and customs are completely different than at home.
24/7 Travel Assistance Services can help you:
In addition, non-medical assistance may include:
Travel insurance can also provides coverage for:
At the beginning of the pandemic, there was a lot of confusion about how trip insurance would cover Covid-related issues.
Most travel insurance companies treat Coronavirus like any other illness. This means it would cover if you get sick with Covid and need to cancel. It would also cover medical expenses if you get Covid abroad and need care.
It did not cover you if you were simply concerned about getting Covid. Many travelers thought a global pandemic would be a covered reason for cancellation, but this is excluded in many policies.
The best way to cover this concern would be a plan with the optional Cancel For Any Reason upgrade. This coverage extends your covered reasons for cancellation, and would allow you to cancel the trip for Covid concerns.
Like any insurance policy, travel insurance cannot cover “everything”.
For cancellations, there is a list of covered reasons for cancellation. Anything not on this list would not be covered.
The list of covered reasons for cancellation includes the most common events like sickness, an accident, death, hurricane, terrorism, house fire, jury duty, needing to work, and more.
For complete peace-of-mind, Cancel For Any Reason coverage is available to extend that coverage.
Other exclusions include losses caused by drug use, suicide, professional sports, hazardous sports (like rock climbing), and more. Again, there is a list of excluded items that would not be covered.
The coverage above related to comprehensive travel insurance. This is the most popular type of insurance travelers buy, because it covers all parts of their trip.
If you are not concerned with cancelled trips, baggage, or delays there is a type of plan called Travel Medical insurance. Travel Medical is just focused on the medical emergency coverage, and evacuation coverage.
Travel Medical only insurance is popular with expatriates, business travelers, or those going overseas for an extended trip. You can purchase it for a year at a time, and can be renewed for several years.
Comprehensive travel insurance covers your pre-paid, non-refundable trip costs. Travelers buy travel insurance for $300 airline tickets, or for an African safari costing $70,000.
Insurable trip costs can include:
Damian Tysdal is the founder of CoverTrip, and he believes travel insurance should be easier to understand. He started the first travel insurance blog in 2006.