Note: The coronavirus pandemic has disrupted existing and future travel plans, and turned greater attention to travel insurance. Go here for specific information concerning travel insurance and COVID-19, or see our guide below.
Depending on the policy, travel insurance reimburses you or offers services when something goes awry. Travel insurance can help when:
- You make nonrefundable reservations and then have to cancel or end a trip early because you get sick or there’s a death in the family.
- Your baggage is lost or stolen.
- You miss a flight or have an emergency and need help finding a hotel, doctor or legal help.
- You get sick while traveling and need medical care.
- You have a medical emergency and need to be transported to the nearest hospital or back home.
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 how travel insurance works, how it’s priced and what it covers and excludes. Follow along, and we’ll take you on a tour through the following:
Who needs travel insurance
Insurance is designed to cover the big financial risks you don’t want to bear alone. You don’t need travel insurance for inexpensive trips, but it can provide a sense of security when you prepay pricey reservations or plan a big trip abroad.
More Americans are buying travel insurance. Some 65.8 million people were covered by some type of travel policy in 2018, a 49% increase from 2016, according to the most recent data from the U.S. Travel Insurance Association.
Types of travel insurance
You’ll find a wide selection of travel insurance plans when you shop for a policy. Generally, 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. Here are the most common offerings:
Trip cancellation, interruption and delay
Trip cancellation insurance reimburses you for prepaid, nonrefundable expenses if the tour operator or cruise line goes out of business or you have to cancel the trip for one of the reasons outlined in the policy, such as your own illness, the illness or death of a family member who’s not traveling with you, bad weather or natural disasters.
Trip interruption insurance covers the nonrefundable cost of the unused portion of the trip if you have to interrupt a vacation because of a reason outlined in the policy. Trip delay coverage reimburses you for expenses such as hotel accommodations and meals if you’re delayed during a trip, such as if your flight gets canceled because of bad weather.
Many package policies cover all three: cancellation, interruption and delay. These policies are different from the cancellation waivers that cruise and tour operators offer, the Insurance Information Institute says. Waivers are cheap, ranging from $40 to $60, and they often include restrictions. For example, waivers might not refund your money if you cancel immediately before departure, the institute says. Waivers are technically not insurance policies.
Details to know:
- Exclusions: Read the fine print to know when cancellation, interruption and delays are covered. These vary by carrier and policy. For instance, some cover cancellation because of a recent terrorist attack at the destination; others don’t. Generally, policies won’t pay out just because you have second thoughts about traveling or if you cancel because of a pre-existing medical condition — meaning one you had when you applied for travel insurance.
- “Cancel for any reason” coverage: 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.
- Limits: Check the limits for the maximum amount of trip cost that can be covered due to cancellation and the per-day and policy limits for trip interruption and delay insurance.
Baggage and personal belongings
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 your baggage is delayed for more than a certain period, such as 12 hours.
Details to know:
- Limits: Policies include limits on how much you can be reimbursed per traveler, per item and per type of item, such as jewelry. A common total limit is $1,000.
- Check other coverage: Your renters or home insurance also covers personal belongings away from home. Your deductible will apply to any claims. The deductible is the amount you pay out before the insurance kicks in.
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 home.
Details to know:
- Exclusions: The policy might not cover 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.
- Limits: The policy will pay expenses up to the given limit, such as $50,000.
- Deductible: This is how much you’ll pay out of pocket for medical expenses before the travel insurance plan pays out. The deductible can range from zero to more than $2,000.
- Check other coverage: Check with your health insurance plan about coverage away from home before you buy emergency medical assistance coverage. Call your plan’s customer service line and ask some “what if” questions. Medicare does not provide coverage outside the United States.
Major medical insurance
These plans are for people traveling abroad for several months or more and provide comprehensive health insurance while away from home. In some ways they work like traditional health plans. However, they’re not subject to the Affordable Care Act, so they include limits on coverage and exclusions for pre-existing conditions.
Details to know:
- Check other coverage: Check with your health insurance plan to see what coverage you would have out of the country. You may still need to be enrolled in a U.S. health plan to be eligible.
- Provider network: You’ll pay more out of pocket to see health care providers outside the plan’s network.
- Out-of-pocket expenses: Check the deductibles, coinsurance and copayment amounts — the portion of costs you pay.
- Limits: Some major medical plans cap the total amount they’ll pay out and limit coverage for some benefits, such as prescription drugs.
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. Many services also offer information before the trip, such as required vaccinations.
Details to know:
- Services covered: 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. The only way to know what’s included is to read the policy.
Rental car coverage
This pays for repairing your rental car if it’s damaged in a wreck, by vandals or in a natural disaster.
Details to know:
Limits: The coverage is for damage to the vehicle up to a certain dollar amount.
Not included: The coverage doesn’t include liability insurance, which pays for damage to other vehicles or for others’ medical treatment if you cause an accident and are held responsible.
Check other coverage: 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.
Accidental death and dismemberment insurance
The 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.
Details to know:
- Check other coverage: This is unnecessary coverage 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.
- Exclusions: An AD&D policy doesn’t pay out if a stroke, heart attack, aneurysm or other medical issue leads to an accident. The death or loss of a limb must occur within a certain time frame, such as one year, after the accident during the trip. Accidents from some activities, such as risky sports, may be excluded.
Common travel insurance needs
|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 adequate hospital or flown home if necessary if you’re injured or 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||Trip cancellation and trip interruption|
|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|
|Payment for rental car damage||Car rental collision insurance|
Travel insurance cost
A comprehensive travel insurance plan typically will cost about 4% to 8% of the cost of a trip, according to the U.S. Travel Insurance Association. The price will vary depending on:
- Length and cost of the trip: The longer and more expensive the trip, the higher the policy cost.
- Destination: High health-care costs in your destination can drive up the price of travel insurance.
- Medical conditions you want covered: Coverage for conditions you already have will increase the cost of travel insurance.
- 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.
How to get travel insurance
|Credit card: Some credit cards offer trip cancellation and rental car insurance if you use the card to book the trip or the car. (Most credit cards offer secondary car rental insurance, which means it pays for car damage not covered by your regular car insurance plan.)||
|Travel agent and travel reservation sites: You can buy travel insurance when you book your flight, hotel and car rental.||
|Travel insurance company: You can buy directly from many companies on their websites.||
|Travel insurance comparison sites||
4 tips for buying travel insurance
- Consider 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 home insurance to cover belongings? What is the deductible? Will your health plan cover you in all the locations where you travel?
- Get quotes for travel 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 details 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.
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 security you have as you embark on your next adventure.