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Table of Contents
- What travel insurance covers
- What affects travel insurance cost
- Different types of travel insurance
- Single vs. long-term policies
- How to get travel insurance
- Buy the best travel insurance for you
- Which travel insurance is best? Top companies
- Tips for buying travel insurance
- When to skip travel insurance
- Keep reading
- Travel insurance, recapped
Booking travel always carries some degree of uncertainty. Travel insurance provides a safety net so you can step out with confidence. Insurance is designed to cover the big financial risks you don’t want to bear alone. You may not need travel insurance for inexpensive trips, but it can provide a sense of security when you prepay for pricey reservations, a big international trip or travel during the COVID-era, which can be unpredictable.
According to insurance comparison site SquareMouth, for the 12-months ended April 2021, travelers spent an average of $234 on travel insurance for trips ranging from two to three weeks, representing just over 6% of the average trip cost.
There are many different policies available, and selecting the right plan depends on your particular circumstances. Follow along as we take a look at the most common travel insurance needs, determine what factors affect the cost, present different travel insurance products, show you how to get covered.
What travel insurance covers
Depending on the type of coverage you’re looking for, the chart below will help you determine what to look for when selecting a policy:
If you want:
Include this in your travel insurance policy:
Payment of medical expenses if you get sick or injured on a trip and need emergency care that’s not covered by your regular health insurance plan.
Travel medical plan
To be taken to the nearest hospital or flown home if necessary when you're injured or you get sick on a trip.
Emergency evacuation and repatriation
Reimbursement of nonrefundable reservations if you get sick and have to cancel or end a trip early; reimbursement if you incur extra costs (e.g., lodging) due to a delay by the airline or other carrier.
Trip cancellation, interruption and delay
Reimbursement of nonrefundable reservations no matter why you cancel a trip.
“Cancel for any reason” coverage
Payment for lost, stolen or damaged baggage.
Baggage and personal belongings
Help finding a lawyer abroad.
24-hour assistance services
Payment for rental car damage.
Car rental collision insurance
Depending on the policy, travel insurance reimburses you or offers services when something goes awry. There’s even coverage for the worst-case scenario: if you die in an accident while traveling. Accidental death coverage pays your beneficiary a lump sum in that case.
Before you buy, take a little time to get familiar with different types of travel insurance products, how it’s priced, and what it covers and excludes. If you’re traveling during these uncertain times, you’ll want to make sure that the policy you select covers coronavirus-related emergencies. Usually, the more thorough the coverage, the more it will cost.
What affects travel insurance cost
According to SquareMouth, for the 12-month period ending April 2021, a comprehensive travel insurance plan averaged 5.9% (domestic trip) and 6.6% (international trip) of the cost of a trip. Generally, the price will vary depending on:
Length and cost of the trip: The longer and more expensive the trip, the higher the policy cost.
Cost of local health care: High health-care costs in your destination can drive up the price of trip insurance.
Medical conditions you want covered: Conditions you already have will increase the cost of travel insurance coverage.
Amount and breadth of coverage: The more risks a policy covers, the more it will cost.
Your age: Generally the older you are, the higher the price.
Any optional supplement you add to your policy: Cancel For Any Reason, Interrupt For Any Reason and more.
Keep these factors in mind when considering different travel insurance options.
Different types of travel insurance
You’ll find a wide selection of travel protection plans when you shop for a policy. Typically, travel insurance is sold as a package, known as a comprehensive plan, which includes a variety of coverage.
Some insurers and comparison sites let you customize a policy by choosing types of coverage a la carte. For example, TravelInsurance.com is a comparison site that provides quotes from different providers.
Here are seven of the most common types of travel insurance coverage:
1. Travel medical insurance
These plans provide health insurance while you’re away from home. Although in some ways these policies work like traditional health plans, generally you cannot use travel health insurance for routine medical events. For example, a routine medical checkup is usually not covered. In addition, these policies often include limitations on coverage and exclusions for pre-existing conditions.
Although most travel insurance plans cover many recreational activities, such as skiing and horseback riding, they often exclude adventure sports, such as skydiving or parasailing, or competition in organized sporting events. You may need to buy a special travel policy designed for adventure or competitive sports.
International travel insurance
Most likely, your U.S.-based medical insurance will not work while you’re traveling internationally, and Medicare does not provide any coverage once you leave the United States outside of a few very specific exemptions. If you plan on traveling abroad, purchasing travel medical insurance could make a lot of sense.
2. Trip cancellation, interruption and delay
Trip cancellation coverage reimburses you for prepaid, nonrefundable expenses if the tour operator goes out of business or you have to cancel the trip for one of the covered reasons outlined in the policy, such as:
Your own illness.
The illness or death of a family member who’s not traveling with you.
Trip interruption insurance covers the nonrefundable cost of the unused portion of the trip if it is interrupted due to a reason outlined in the policy.
Trip delay coverage reimburses you for expenses such as lodging and meals if you’re delayed during a trip (e.g., your flight gets canceled due to weather).
Many package policies cover all three. These policies are different from the cancellation waivers that cruise lines and tour operators offer, the Insurance Information Institute says. Waivers are cheap, ranging from $40 to $60, and often include restrictions. For example, according to the institute, waivers might not refund your money if you cancel immediately before departure. Waivers are technically not insurance policies.
Some companies offer additional layers of coverage at extra cost. “Cancel For Any Reason” coverage will reimburse a large part of the trip cost, no matter why you back out. And some companies let you pay extra to cover pre-existing conditions if you cancel for medical reasons.
3. Baggage and personal belongings
How does lost luggage insurance work? This coverage reimburses you for baggage and personal belongings that are lost, stolen or damaged during the trip. Some plans also reimburse you for extra expenses if you experience a baggage delay for more than a certain period, such as 12 hours.
Your renters or homeowners insurance may cover personal belongings while you are traveling. It’s best to review your homeowners insurance policy to determine the level of coverage it provides so you do not end up paying for a benefit you already have.
» Learn more: Baggage insurance explained
4. Emergency medical assistance, evacuation and repatriation
This coverage pays medical expenses if you get sick or injured on a trip. Medical evacuation coverage pays for transporting you to the nearest hospital, and medical repatriation pays for flying you to your home country.
5. 24-hour assistance
This service is included with many package plans. The insurer provides a 24-hour hotline that you can call when you need help, such as booking a flight after a missed connection, finding lost luggage, or locating a doctor or lawyer.
Generally, travel insurance companies do not cover sports or any activity that can be deemed risky. If you’re thinking of incorporating adventurous activities into your vacation, choose a plan that includes adventure sports coverage.
Most travel insurers cover a wide array of services, but the specific options vary. Some plans include concierge services, providing help with restaurant referrals, tee time reservations and more. Many services also offer information before the trip, such as required vaccinations. The only way to know what’s included is to read the policy.
» Learn more: Should you insure your cruise?
6. Accidental death and dismemberment insurance
This coverage pays a lump sum to your beneficiary, such as a family member, if you die in an accident while on the trip. Accidental death and dismemberment insurance policies also pay a portion of the sum to you if you lose a hand, foot, limb, eyesight, speech or hearing. Some plans apply only to accidental death in a plane.
This coverage may be duplicative if you already have sufficient life insurance, which pays out whether you die in an accident or from an illness. You may also already have accidental death and dismemberment insurance through work, so it's best to check your policies to ensure you’re not overpaying.
» Learn more: NerdWallet's guide to life insurance
7. Rental car coverage
Rental car insurance pays for repairing your rental car if it’s damaged in a wreck, by vandals or in a natural disaster. The coverage doesn't include liability insurance, which pays for damage to other vehicles or for the medical treatment of others if you cause an accident and are held responsible.
Ask your car insurance company whether your policy will cover you when renting cars on the trip. U.S. car insurance policies generally don’t cover you when driving in other countries, except Canada.
Car insurance requirements are complex because they vary among countries. You can usually purchase liability insurance from the rental car company. Learn about car insurance requirements by searching for auto insurance by country on the U.S. Embassy website.
» Learn more: Best credit cards for rental car coverage
Single vs. long-term policies
Single trip insurance plans are a great option for those going on a single trip for a specific length of time (e.g., a two-week vacation) and then returning home. The price of the policy is usually determined by the cost of the trip.
Long-term travel policies cover you for multiple trips, but there are limitations to how long you can be away from home, if you can return home during your travels and how many trips you can take. In addition, trip cancellation and interruption coverage is either not offered or capped at a dollar amount that can be significantly below the total cost of all the trips taken during the covered period.
Long-term travel insurance plans — often called 'multi-trip' or 'annual travel insurance' — are a suitable option for those who travel often and are satisfied with the amount of trip cancellation coverage for all the trips they take over the duration of the policy.
Example single trip travel insurance plans:
World Nomads: Explorer Plan. This plan offers superior adventure sports coverage; high limits for trip delay, baggage delay, and personal effects coverage; the ability to purchase additional coverage mid-trip; a money back guarantee; and $35,000 in rental car damage coverage. The Explorer Plan also offers up to $10,000 in trip cancellation and interruption benefits, regardless of the cost of your trip. While you're traveling, World Nomads will allow you to cover your trip up to 180 days in length, which is the highest allowable trip length out of all the plans surveyed.
AXA Assistance USA: Platinum plan. The Platinum plan from AXA Assistance USA excels in emergency medical coverage, medical evacuation ($1,000,000 per person), 150% trip interruption coverage, employment layoff benefits and coverage for pre-existing conditions. The emergency medical coverage is primary — meaning that you can submit claims directly to AXA without needing to first submit to your primary medical insurance — and the limit is high at $250,000 per person.
Travelex: Travel Select plan. The Travel Select plan from Travelex allows you to upgrade specific benefits (e.g., adventure sports and emergency medical), giving you the option of cherry-picking which benefits you’d like more protection for. A plan like this can be a great choice for those looking to upgrade a specific benefit they want instead of purchasing an entire policy with higher limits for all benefits, which would usually be more expensive.
Example long term travel insurance plans:
World Nomads: Standard Plan. Like the Explorer Plan, the Standard Plan from World Nomads allows trips up to 180 days. With the exception of car rental and adventure sports coverage, the Standard Plan offers all of the same benefits as the Explorer Plan highlighted above, albeit at lower limits. The Standard Plan has solid emergency medical and evacuation, trip delay, baggage and personal effects, hurricane and weather benefits along with providing coverage for more than 200 sports and activities.
Allianz: AllTrips Executive Plan. The AllTrips Executive Plan from Allianz is a great choice for those who carry work equipment with them as it offers business equipment and business equipment rental coverage. The plan also offers loyalty program redeposit fee coverage, trip delay, baggage delay on outward journeys and a high accidental death and dismemberment benefit. Trip cancellation and interruption benefits cover up to $5,000 per person, which is significant. Although the AllTrips Executive Plan caps the maximum trip length at 45 days, you can take an unlimited number of trips during that time, allowing you to return home before departing again.
» Learn more: How to find the best travel insurance
How to get travel insurance
When you’re considering travel insurance for an upcoming trip, you’ll be happy to know that some components of your trip may already be covered. For example, when you book a trip with your credit card, depending on the card you use, you may already receive trip cancellation and interruption coverage.
So when deciding on what level of coverage you need, check to see what you already get with your credit card. Then, decide what additional coverage you would like. Commonly, travel medical protection is not included with your credit card, so if you’re looking for more comprehensive coverage, it makes sense to purchase a general trip insurance policy.
» Learn more: 10 credit cards that provide travel insurance
Below, we include four ways to obtain travel insurance, along with the pros and cons of each option.
Some credit cards offer trip cancellation and rental car insurance if you use the card to book the trip or car.
Pros: Coverage is free.
Cons: You can’t customize the insurance to meet your needs. Most credit cards offer secondary car rental insurance, which pays for the costs not covered by your regular car insurance plan.
Travel agents and travel reservation sites
You can buy travel insurance when you book your flight, hotel and car rental.
Pros: Buying is as quick and easy as clicking “yes” when you book reservations. Coverage is inexpensive.
Cons: You can’t customize the coverage.
Travel insurance companies
You can purchase travel insurance directly from an insurance provider.
Pros: You can choose a policy that fits your needs. Many travel insurer websites also offer information to help you understand the coverage.
Cons: You’ll need to go to multiple websites to compare coverage and pricing.
Travel insurance comparison sites
You can compare different policies and review quotes at once based on the trip search criteria you’ve input into the search form.
Pros: You can choose a policy that fits your needs and compare policies and pricing in one place.
Cons: Comparing multiple policies takes time.
Buy the best travel insurance for you
Comparing travel insurance policies from different providers is your best bet for finding a policy customized to your needs and at the price you want. We’ve compiled a list of travel insurance providers and comparison sites to help you shop for the best quote.
Travel insurance comparison sites
If you don’t know which provider to go with, it makes sense to browse a list of plans on a comparison site. These sites will often include plans from the best travel insurance companies along with customer reviews. Below, we’ve included five popular insurance comparison sites:
Compare plans from more than 30 providers.
Over 86,000 customer reviews of insurers.
Under its Zero Complaint Guarantee, SquareMouth (a NerdWallet partner) will remove a provider if any customer complaint isn't resolved to its satisfaction.
Has a filter option to see policies that provide COVID-coverage.
Compare plans from 13 providers.
See good and poor customer ratings and reviews for each insurer when you receive quotes.
“Learning Center” includes travel insurance articles and travel tips, including important how-to information.
Quotes provided from each provider include a link to COVID-19 FAQs, making it easy for customers to review what’s covered or not.
Compare plans from more than two dozen providers.
More than 70,000 customer reviews.
“Anytime Advocates” help customers navigate the claim process and will work on behalf of the customer to help with appealing a denied claim.
Includes a link to plans that offer COVID coverage.
Compare plans from 11 providers.
Search coverage by sporting activity, including ground, air and water sports.
Many types of plans available for students, visiting family members, new immigrants, those seeking COVID quarantine coverage and more.
Compare different insurance plans from 35 providers.
Over 5,600 customer reviews on Trustpilot, with an average 4.9 stars out of five.
Formerly known as AardvarkCompare, AARDY includes a “Travel Insurance 101” learning center to help customers understand various policies and benefits.
Quote search results page includes COVID-coverage highlighted in a different color to make it easier for customers to review related limits.
Which travel insurance is best? Top companies
If you already have an insurer in mind or just want to learn more about some of the best travel insurance companies, take a look at our top 10 list below. Whether you’re looking for an international travel insurance plan, emergency medical care, COVID coverage or a policy that includes extreme sports, these providers have you covered.
Our full analysis and more details about each organization can be found here: The Best Travel Insurance Right Now.
Tips for buying travel insurance
Keep these four important tips in mind when you’re considering a trip insurance policy.
Evaluate the financial risks you face when traveling. Can you bear those costs yourself, or do you want insurance?
Examine what coverage you already have: Does your credit card offer travel insurance? Do you have renters or homeowners insurance to cover belongings? What is the deductible? Will your health plan cover you in all the locations where you travel?
Get quotes for trip insurance online. Choose a package of the benefits you need and compare prices for similar coverage among carriers.
Narrow your choices and then read the policy fine print to understand what’s covered, what’s excluded and the limits on coverage. You may find that the lowest-priced policy is too restrictive and that paying a little more gets you the coverage you need. Or you might find that the cheapest, most basic policy fits the bill.
When to skip travel insurance
There are a few scenarios when spending extra on travel insurance doesn't really make sense, like:
You booked flexible airline tickets.
Your hotel room has a good cancellation policy.
It's already included in your credit card.
You haven't booked any nonrefundable activities.
If you want to dig in deeper to world of travel insurance, these resources will point you in the right direction.
Travel insurance, recapped
Unpredictability is one of the mind-opening joys of travel, but travel insurance should contain no surprises. The time you spend to understand your options will be well worth the peace of mind as you embark on your next adventure.
Whether you’re seeking a single or a long-term policy, each travel insurance option offers different strengths and weaknesses. Choosing the right policy depends on your trip needs, your budget and how important various benefits are to you.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card