Travel insurance is a good option if you care about safeguarding the money you’ve invested in your vacation. Of course, you might not want to spend extra money on travel insurance after shelling out for airfare, hotels, meals and activities. But think about it, travel insurance can be a worthwhile expense if you end up losing the non-refundable money you’ve paid for your trip.
You should consider getting travel insurance if:
- You have spent a lot of money on your trip that you can’t get back
- You are going to another country.
- You are visiting a place with poor medical services.
- You are heading to a region where hurricanes are common.
- Your trip has multiple stops or transfers.
- You wish to get some money back if you change your mind or cut your trip short.
According to Square-mouth, a company that compares travel insurance plans, the average travel insurance policy cost $268 in 2023 and the average claim payout was $2,167. Compared to the potential losses of your trip costs, travel insurance is a minor expense—especially when you consider the risks and unpredictability of traveling.
How Travel Insurance Can Save You From Unexpected Expenses
If something unpredictable happens before or during your trip and you lose money, travel insurance will reimburse you. It will also take care of the expenses of emergency medical services and evacuation during your trip.
The best travel insurance plans offer a variety of coverage options for different scenarios involving
- Trip cancellation
- medical emergencies
- Luggage issues (e.t.c)
Trip Disruption Reimbursement
You might have to cancel your trip before you even get to pack your sunscreen and swimsuits, because of something unexpected—for example, if a travel company shuts down, you get sick or a family member passes away. Travel insurance that covers trip cancellation will pay you back the money you’ve paid in advance and can’t get back for your trip in these cases.
Pre-departure cancellations accounted for over 20% of all travel insurance claims that were paid last year. Squaremouth’s data shows that the average trip cancellation claim in 2023 was $6,460.
Travel Insurance with Flexible Cancellation Option
To make a claim with trip cancellation coverage, your cancellation reason must be acceptable according to your policy. To extend cancellation coverage, there’s an additional option called “cancel for any reason” (CFAR) travel insurance.
CFAR coverage allows you to cancel a trip for any reason and get some money back, as long as you cancel no later than 48 hours before your planned departure. For example, maybe you’ve decided to skip your trip so you can go to your high school reunion. CFAR travel insurance usually increases travel insurance policy cost by 50%. You can expect to get back 76% of the trip money you forfeit.
Emergency Health Insurance for Travelers
A medical emergency can ruin your travel plans and your budget, whether you’re paddling in Argentina or going on a safari in Zambia.
U.S. health plans might not cover you outside the country. That means you’d have to cover your medical expenses if you get hurt or sick during your trip. According to Square-mouth, a medical emergency was the reason for one in five travel insurance claims that were paid in 2022.
Travel medical insurance pays for doctor and hospital fees, ambulance transport, medication, X-rays and lab tests, up to the medical maximums in the policy.
Emergency Medical Transportation Coverage
Think about having to be rescued by helicopter from a mountain in Switzerland after a hiking accident, staying in a hospital in Colombia for a few weeks after a heart attack or needing a flight back to the U.S. to fix a broken hip.
According to Allianz, it can cost between $20,000 and $200,000 to be taken by helicopter or ambulance to a nearby medical facility for an injury or illness anywhere in the world. That does not cover the cost of the treatment itself. Medical evacuation travel insurance pays for the cost of being moved to the nearest medical facility that can treat you, and it may also cover the cost of flying you back to the U.S. for better medical care. In addition to medical evacuation, a policy can pay for the return, or transfer, of a traveler’s body to the U.S.
For instance, the TripProtector Preferred plan from HTH Worldwide is one of the most generous in the industry, offering $500,000 for emergency medical costs and $1 million for emergency medical evacuation.
The average medical evacuation claim in 2023 was about $80,000, with the highest medical evacuation claim being nearly three times that ($225,000), according to Squaremouth data.
How to Get Covered for Unexpected Travel Delays
Many travelers find travel delays frustrating. The most frequent travel insurance claim paid in 2023 was for travel delay (25%), as per Square-mouth. A policy that covers travel delay can pay for restaurant, hotel and other costs when a flight is postponed due to a reason in your policy, such as bad weather or a technical issue. The maximum amount of coverage per day usually varies from $150 to $200 per person.
For instance, the Safe Travels Voyager plan from Trawick International offers travel delay coverage of $250 a day per person, up to $3,000 total, after a delay of six hours.
Travel delay insurance can also pay for expenses for you to resume your trip or return home.
Trip interruption Insurance
Trip Interruption insurance pays you back for the money you can’t get back for your trip if you have to end it sooner than planned for a reason on the policy. These expenses can be airfare, hotels and tours. Trip interruption insurance can also cover the cost of a flight back home if you have to leave earlier than expected because of something unexpected, such as a crisis at home.
You can’t use trip interruption insurance for any reason to end your trip. For instance, if your beach vacation gets ruined by cloudy and rainy weather, standard trip interruption coverage won’t help you if you want to leave early.
Interruption for Any Reason-Protection in Travel Insurance
Similar to CFAR, “interruption for any reason” (IFAR) travel insurance is an extra feature you can get with some travel insurance plans, depending on the provider. IFAR covers the cost of going back home earlier than expected, no matter the reason, and gives you up to 75% of the trip costs you insured.
It usually increases your travel insurance cost by 3% to 10%, and you normally have to be at least 48 hours into your trip for benefits to kick in. IFAR generally has to be bought 15 to 20 days after you pay your first trip deposit.
How Travel Insurance Can Help with Missed Connections
When you’re traveling, missing a connection can be a pricey inconvenience. Missed connection travel insurance pays you back if you miss a departure for a reason in the policy.
This would cover the cost of a travel delay of, for example, three, six or 12 hours caused by something like a technical problem on a plane or a storm that delays a cruise ship from arriving on time. The coverage usually would pay for the expense of joining a tour or cruise. For instance, the Classic plan by TravelSafe gives $2,500 after a missed connection of three hours.
Luggage Insurance
A travel insurance policy with luggage insurance can pay you back partially if your luggage is lost, stolen or damaged during a trip. You can also get coverage for theft of your baggage and belongings worldwide from homeowners insurance or renters insurance policies.
Luggage insurance covers your personal items as well, so you can make a claim if your backpack is stolen. Keep in mind that baggage insurance pays you for the reduced value of your belongings and not the cost to replace them with new ones. Also, there are limits and exclusions on some items.
Moreover, many travel insurance plans cover luggage delays. This coverage can reimburse you for items you have to buy, such as clothing and toiletries, while you’re waiting for your luggage to arrive. Baggage delay benefits have a certain waiting time before they apply, such as 12 hours.
Some examples of baggage delay coverage from some of the best travel insurance companies in Forbes Advisor’s ratings are:
- Nationwide Cruise Luxury plan: $1,000 per person after a delay of six hours.
- Seven Corners RoundTrip Choice plan: $500 per person after a delay of six hours.
- Travel Insured International Worldwide Trip Protector: $500 per person after a delay of three hours.
How Can You Buy Travel Insurance?
You can buy travel insurance from travel insurance company websites, travel insurance comparison sites or travel insurance agents. Travel agents who offer travel insurance can also assist you in buying a policy. Some tour operators also offer travel insurance, but you’re usually better off buying a policy yourself because you can tailor it to your specific needs.
Getting travel insurance online is very easy—you can normally get travel insurance estimates right away by entering your:
- Age
- Destination
- Trip cost
- Travel date.
What are the Exclusions of Travel Insurance?
Travel insurance is meant to protect your trip expenses if something unpredictable ruins your plans. It usually excludes losses that result from your own actions and choices. For example, trip cancellation benefits are only valid if you cancel for a reason that is
specified in the policy, which are unexpected events that you can’t control. That means you can’t file a regular trip cancellation insurance claim if you just decide not to go on your trip. For that, you would need a “cancel for any reason” option.
Before purchasing the policy, read the details carefully and learn what the policy won’t cover. For instance, travel medical insurance usually doesn’t cover expenses such as:
- Optional treatments
- Mental health services
- Engaging in risky or extreme activities
- Rehabilitation
- Regular check-ups and dental visits
- Normal pregnancy
NOTE: You should also know that travel insurance policies usually don’t cover money you forfeit because of a hurricane unless you buy travel insurance before the storm gets a name.
Under What Circumstances Can You Skip Travel Insurance?
Travel insurance is usually not necessary if you’re not making big non-refundable trip payments, or if your U.S. health plan will pay for your medical expenses at your destination.
Some situations where travel insurance may not be necessary are:
Corporate travel
You probably don’t need your own travel insurance plan if your company is arranging and covering your domestic business trip. If your business trip is international, you should ask your employer if your company has business travel insurance that covers your travel medical expenses. If not, you should think about purchasing travel medical expense insurance.
A low-cost domestic trip
You may not need travel insurance if you can handle the loss of your trip expenses. The value of travel insurance may depend on the price of a policy versus your cash expenditure.
A cheap tour element
See what you spent and what you would forfeit if you had to cancel. It may not be worth the expense to insure them if you have only one or two cheap tours or day trips on your schedule. If you have many low-priced tours and activities planned that add up to a large amount, it may be worth insuring them in that situation.
Trips booked with miles or points
You can get great benefits from redeeming points and miles, but travel insurance can’t cover the worth of trips booked using miles or points, says Jason Schreier, chief executive officer of GoReady Insurance, a travel insurance company. Remember that if you cut your trip short to return home for an emergency, you may forfeit all those points and face last-minute flight charges.
Trips where you have existing coverage
You may already have some travel insurance benefits through a credit card, a homeowners’ policy, or from an airline if you chose flight insurance as an extra. Review the details of any relevant coverage you may have. It may meet your needs, in which case you won’t need an additional travel insurance policy.
Luggage insurance if you have home or renters insurance
If you have homeowners insurance or renters insurance and you’re not packing many valuable items for your trip, you may want to think about skipping baggage insurance. That’s because baggage loss coverage is usually secondary, which means you first have to file a claim with your airline or homeowners or renters insurance before filing your baggage loss claim.
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