Travel Insurance Benefits

Understanding the different types of travel insurance products, coverage, and exclusions can be complex. Still, travel insurance benefits can protect against unexpected events that impact your trip. These policies reimburse you for costs associated with:

• Cancellations
• Trip interruptions
• Illness and injuries
• And more

This guide outlines the different types of coverage and how to choose the right policy for your travel plans. Learn more about:

• Practical tips for buying travel insurance
• How to assess your risks for appropriate coverage
• What you should expect to pay for a travel insurance policy
• And more

What Does Travel Insurance Cover?

Specifics vary by policy and provider, but travel insurance coverage typically includes:

• Cancellation fees and lost deposits
• Medical expenses and medical evacuation
• Travel services provider insolvency (like a tour operator, airline, or hotel closing down or filing bankruptcy)
• Overseas medical coverage
• Alternative transport expenses
• Accidental death or permanent disability
• Baggage loss and personal effects, including a delayed luggage allowance
• Personal liability
• Lost or stolen cash
• Hijacking or other situations of distress
• Additional expenses

Some plans also offer Cancel For Any Reason (CFAR) coverage. This optional benefit allows you to cancel your trip for any reason not listed in the cancellation policy and still receive a partial refund.

CFAR policies reimburse up to 75% of prepaid, nonrefundable trip costs. You usually need to buy this coverage shortly after making your initial trip deposit, usually 10 to 21 days. Some providers require you to cancel your trip at least 48 hours before your scheduled departure.

Trip Cancellation and Trip Interruption

Often sold as a package, trip cancellation and trip interruption are the two primary types of travel insurance. They cover losses that other types of insurance do not. For example, most consumers' health insurance covers medical care, and many homeowners' insurance policies cover lost baggage.

Trip Cancellation Coverage

Trip cancellation provides coverage before your travels begin. If you must cancel your trip, this coverage reimburses you for pre-paid, nonrefundable expenses. These expenses typically include plane or train tickets and hotel rooms.

Be sure to read the policy language carefully. You are usually only covered if the cancellation is due to an unforeseen incident affecting you, your fellow travelers, or a close family member.

This "unforeseen" language can prevent you from collecting damages due to:

• Pre-existing medical conditions
• Chronic illnesses
• Pregnancies
• Injuries sustained during dangerous activities

Some travel insurance policies also exclude travel expenses due to political unrest and pandemics.

Most travel insurance providers consider these foreseeable incidents or events you could have predicted might happen. Additionally, "close family member" language often only applies to a spouse, not a partner. For example, if your unmarried partner gets sick before you leave, this illness may not be an incident covered by the policy. If there is any language you don't understand, ask your insurance agent to clarify.

Your policy defines when your trip actually starts. This is important to know because that is when your cancellation coverage ends. For example, if your policy defines your trip as beginning the moment you leave your home, the policy likely won't cover a car accident on the way to the airport.

Conversely, if your policy defines your trip as beginning once you've checked at the airport, the policy likely would cover the same accident.

Trip Interruption or Trip Delay Coverage

While trip cancellation insurance covers you before your trip begins, trip interruption insurance covers unforeseen events that cut your vacation short. For example:

• If you fall ill or get injured
• Your plane incurs mechanical errors
• Natural disasters, like hurricanes, earthquakes, or floods
• Any other unforeseen event

Trip interruption reimburses you for costs due to an unexpected event. Typically, trip interruption pays for the expenses of going home early or catching up to your original itinerary after a delay. However, some policies even cover unused, prepaid expenses, like a hotel room or tourist activities. Trip cancellation sometimes also covers additional living expenses caused by these delays.

Most trip interruption policies also cover medical transportation. For example, if you get hurt while hiking and must be airlifted to the hospital, this policy would cover the helicopter cost.

However, this coverage is only for unforeseen incidents and doesn't cover chronic illnesses. For example, if your tendonitis becomes crippling during your rock-climbing excursion, the policy probably won't cover your medical transportation.

A few trip interruption policies cover you in the unlikely event of your death, such as handling your remains. Again, do not rely on this coverage if you have a pre-existing condition. If you want extra precautions, ask about this coverage.

Travel Policy Costs

Premium costs vary greatly, depending on several factors:

• Type and length of trip
• Destination
• Coverage specifics
• Number of travelers needing coverage
• Other details

Still, expect to pay about 3% to 5% of your total trip costs on travel insurance, should you decide to purchase. A single traveler on a relatively short and inexpensive trip can secure travel insurance for as low as $15. An entire family traveling internationally and needing more extensive coverage could pay up to $800.

Some providers also offer noninsurance products like travel assistance services and cancellation fee waivers. These optional add-ons will increase the total cost of your plan.

Where Do I Buy Travel Insurance?

Most airlines offer travel insurance as part of the airfare booking process. While it may seem that the airline provides these insurance plans, they are serviced and managed by separate companies. The most common insurance partners airlines use for travel insurance coverage are:

• Allianz
• Travel Guard
• Generali

Travel agents can also help you pick a travel insurance option that suits your needs. If you're working with a travel agency, ask for recommendations. These travel professionals are often knowledgeable on the benefits, restrictions, and claims handling process for different providers.

Most credit card providers also offer travel insurance as a benefit if you use the card to pay for your trip. Like airlines, most credit cards use partners to service these plans. These plans are separate from lost baggage reimbursement, which credit cards usually provide at no extra cost.

You can also use websites (like SquareMouth) to instantly compare travel insurance quotes from several providers.

Health Insurance Benefits Abroad

If you travel abroad, be sure to check your health insurance policy. Many health plans restrict coverage when traveling internationally. Policies that cover medical care abroad often require you to get specific paperwork from foreign medical personnel. Review your policy and its fine print for coverage gaps or restrictions.

If your health insurance does not cover medical expenses abroad, consider buying travel insurance that does cover these expenses.

Additionally, travel insurance does offer accidental death and dismemberment policies. Most travel insurance also covers the cost of repatriation, or transporting you back to your home country, if you become ill or injured while abroad.

But, like other medical emergencies, these costs are covered under most regular health insurance policies.

Tips When Shopping for Travel Insurance

• Most travelers already have some coverage stemming from their medical and homeowners insurance policies and credit card protections. Check these first before purchasing a travel protection plan.
• If you plan to engage in a dangerous activity, like mountain climbing or skydiving, check to see if the policy covers it. Some policies exclude injuries sustained from extreme sports. Keep in mind most life insurance policies also won't pay benefits for death resulting from these activities.
• Make sure you have enough coverage to cover any expensive personal property. Your coverage should match its worth. For example, if your laptop is worth over $1,500, but you only buy coverage for $500, the insurance may not be worth it. Conversely, if your laptop is 10 years old and is your only major expensive item, think twice before buying a costly policy to insure it.
• Be honest about any pre-existing medical conditions. If the insurance company finds out later that your condition was pre-existing, they can sue you for reimbursement and even fraud.
• Be sure that you're covered for the full duration of your trip — from the time you leave your front door until the time you return home. This is especially important when flying internationally. Some consumers, confused by different time zones, end their coverage too soon.
• Check the reviews of the insurance providers. Pay attention to what people say about their customer service and claims handling. You may want to opt for a company that provides 24/7 support.

Travel Insurance Issue? Get Legal Help

If you're having an issue with a travel insurance claim or suspect bad faith practices, you may benefit from consulting an attorney. An experienced attorney can review the terms of your insurance products and your claim and offer legal options for your situation.

They will help protect your rights and can even help secure an appropriate legal remedy. Contact a consumer protection attorney in your area to learn more.