What Is Travel Insurance And What Does It Cover? (2024)

If you can’t afford to lose the hard-earned money you’ve invested in your trip, travel insurance can be a financial safety net. Travel insurance provides compensation for pre- and post-departure problems that can derail your trip. The best travel insurance companies provide generous benefits for trip cancellation, delays, baggage, interruptions and for medical emergencies.

What Is Travel Insurance?

Travel insurance is a type of insurance designed to cover expenses for unforeseen events associated with traveling. These can include trip cancellations, medical emergencies, lost luggage, flight delays and other problems that can arise. Your travel insurance policy compensates you according to the specifics detailed in your coverage when you file a claim.

What Does Travel Insurance Cover?

Travel insurance covers unexpected incidents you may experience before you leave on a trip or during your trip.

Trip Cancellation Insurance

Before you’re even able to finish packing your sunscreen and swimsuits, an unforeseen circ*mstance could force the cancellation of your trip—for example, if a tour operator goes out of business, you become ill or a family member dies. Travel insurance that includes trip cancellation travel insurance will reimburse the prepaid, non-refundable costs of your trip in these kinds of situations.

“Cancel For Any Reason” Travel Insurance

You can make a claim using trip cancellation coverage only if your reason for canceling is listed in the policy as an acceptable reason. To broaden cancellation coverage, there’s an add-on known as “cancel for any reason” (CFAR) travel insurance.

CFAR coverage lets you cancel a trip for any reason and receive partial reimbursem*nt, as long as you cancel at least 48 hours before your scheduled departure. For instance, maybe you’ve opted to stay home so you can attend your high school reunion. CFAR travel insurance typically adds 50% to travel insurance policy cost. Reimbursem*nt is generally 75% of the trip money you lose.

Travel Medical Insurance for Emergencies

Whether you’re canoeing in Argentina or taking a safari trip in Zambia, a medical emergency can put a big dent in your travel mojo. It also can put a big dent in your budget.

U.S. health plans may have limited or no coverage outside the country. That means you’d have to pay for your medical care if you get injured or become ill during your trip.

Travel medical insurance covers costs for doctor and hospital bills, ambulance service, medicine, X-rays and lab work, up to the medical limits listed in the policy.

Medical Evacuation Insurance

Imagine needing to be airlifted off a mountainside during a trip to Switzerland after a hiking mishap, spending a few weeks in a Colombian hospital recovering from a heart attack or requiring a flight back home during a trip to Jamaica to treat a broken hip.

It can cost an estimated $20,000 to $200,000 to be transported by helicopter or ambulance to a nearby health care facility for treatment of an injury or illness somewhere in the world, according to Allianz. That does not include the cost of the treatment itself.

Medical evacuation travel insurance covers the expense of being taken to the closest health care facility that’s equipped to treat you, and it also may pay for someone to be flown back to the U.S. for advanced medical attention. Along with medical evacuation, a policy can cover the repatriation, or transfer, of a traveler’s remains to the U.S.

For example, the TripProtector Preferred plan from HTH Worldwide is one of the most generous in the industry, providing $500,000 for emergency medical expenses and $1 million for emergency medical evacuation.

Travel Delay Insurance

Travel delays are a headache for many travelers.

A policy that includes travel delay insurance can reimburse restaurant, hotel and other expenses when a flight is delayed due to a reason listed in your policy, such as bad weather or a mechanical problem. The daily limit of coverage usually ranges from $150 to $200 per person.

For example, the Safe Travels Voyager plan from Trawick International provides travel delay coverage of $250 a day per person, up to $3,000 total, after six hours of delay.

Travel delay insurance can also cover costs for you to catch up to a destination or go back home.

Trip Interruption Insurance

Trip interruption travel insurance compensates you for unused, non-refundable trip expenses if you have to cut a trip short for a reason listed on the policy. These costs can include airfare, accommodations and tours. Trip interruption insurance can also pay for a last-minute flight home if you need to return earlier than expected due to an unforeseen event, such as an emergency back home.

Not all reasons to interrupt a trip are acceptable for a trip interruption insurance claim. For example, if the weather turns cloudy and rainy half way through your beach vacation, standard trip interruption benefits won’t apply if you want to go home early.

“Interruption for Any Reason” Travel Insurance

Like CFAR, “interruption for any reason” (IFAR) travel insurance is an upgrade you can add to some travel insurance policies, depending on the company. IFAR pays for you to return home sooner than planned, regardless of the cause, and be compensated up to 75% of the trip costs you insured.

It typically adds 3% to 10% to your travel insurance cost, and you usually must be at least 48 hours into your trip for benefits to apply. IFAR must generally be purchased 15 to 20 days after you make your first trip deposit.

Travel Insurance for Missed Connections

Missing a connection while you’re traveling can be a costly hassle. Missed connection travel insurance reimburses you if you miss a departure for a reason listed in the policy.

This would compensate for a travel delay of, say, three, six or 12 hours caused by something like a mechanical failure on a plane or a storm that prevents a cruise ship from docking on time. The compensation typically would cover the cost of catching up to a tour or cruise.

For example, the Classic Plus plan by TravelSafe provides $2,500 after three hours of a missed connection.

Baggage Insurance

If your luggage is lost, stolen or damaged during a trip, a travel insurance policy with baggage insurance can partially reimburse you. Homeowners insurance or renters insurance policies can also cover theft of your baggage and belongings, worldwide.

Baggage insurance also extends to your personal possessions, so if your backpack gets stolen, you can file a claim. Be aware that baggage insurance compensates you for the depreciated value of your belongings and not the amount to replace your stuff with new items. Also, there are exclusions and caps on certain items.

In addition, many travel insurance plans cover baggage delays. This coverage can pay for items you need to buy, such as clothing and toiletries, to tide you over while you’re waiting for your luggage to catch up with you. Baggage delay benefits come with a specified waiting time before benefits apply, such as 12 hours.

Examples of baggage delay coverage from some of the best travel insurance companies in Forbes Advisor’s ratings include:

• Nationwide Cruise Luxury plan: $1,000 per person after a six-hour delay.
• Seven Corners Trip Protection Choice plan: $500 per person after a six-hour delay.
• Travel Insured International Worldwide Trip Protector: $500 per person after three-hour delay.

Other Travel Insurance Coverage

Some travel insurance companies offer additional benefits beyond the core types of coverage, or may even include these supplemental types of coverage in a standard policy. Here are some common examples.

Adventure Sports

Adventure sports are typically excluded from coverage, but If you need coverage for adventure sports and activities, don’t fret. Many travel insurance companies offer sports and adventure add-ons for an extra charge. Or you can find a travel insurance company that specializes in covering adventure sports trips, such as World Nomads.

Concierge Services

Some travel insurance policies provide concierge service that can buy you tickets for events and arrange dinner, golf and tour reservations, as well as ground transportation.

Pet Coverage

Expenses for injuries to your pet traveling with you and kennel fees if you return home late from a trip are examples of pet coverage you can add to a policy, or can find included in some travel plans.

Rental Car Coverage

Many travel policies provide compensation if your rental car is damaged by a problem covered by your policy while others offer it as add-on coverage.

Travel Inconvenience Coverage

Some policies pay a modest amount to reimburse you for minor travel hiccups, for example if you have a tarmac delay or a ticketed event in your itinerary is canceled.

How Does Travel Insurance Work?

Travel insurance reimburses you when you file a claim for trip-related expenses that are covered by your policy.

Waiting Periods and Coverage Limits

Your policy’s coverage limits and criteria dictate how much you’re paid when you file a claim.

For example, if you cancel a trip for reasons covered in your policy, you’ll be compensated for the amount of your insured trip cost. If you file a medical expense claim, you’ll be paid up to the limits of your coverage, such as $500,000. Travel and baggage delay benefits kick in after a specified amount of time, so you’ll be reimbursed up to your policy limits after the required waiting period.

Travel Insurance and Primary vs Secondary Coverage

Primary and secondary coverage on insurance policies refers to whether your policy pays out first or not. For travel insurance plans, it’s typically applicable to travel medical expense coverage and baggage and belongings coverage.

For example, if your travel medical coverage is primary, that means you first file a claim with your travel insurance company and your travel insurance plan pays out first for eligible medical expenses.

If your coverage is secondary, that means your policy pays out after you’ve filed claims with other applicable insurance policies. Typically, that means you would first file a claim with your health insurance company. Your secondary travel medical insurance would then pay the remaining balance not covered by your health insurance.

For baggage and possessions, secondary coverage means you first file a claim with the tour operator, airline or your home insurance before seeking reimbursem*nt from your travel insurance company.

What Does Travel Insurance Not Cover?

Don’t assume travel insurance will cover any injury, illness, inconvenience or loss you experience on your trip—not all problems you might encounter will be covered.

Whether you just bought a travel insurance policy or are planning to, it’s important to know the major exclusions and common scenarios where travel insurance won’t apply.

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	Fear of Flying, Change of Mind or Other Foreseeable Reasons If you want to cancel a trip because you decide you’d rather stay home and go at a later time, you can’t turn to a standard travel insurance plan for help. The same goes if you have started to feel uncomfortable about flying—standard trip cancellation travel insurance doesn’t cover changing your mind.
	Natural Disasters That Begin Before You Buy Travel Insurance Once a storm is named, it’s too late to buy travel insurance to cover it. The same is true for other natural disasters. If a volcano starts erupting, you’ve missed the window to buy travel insurance that will cover volcano-related trip cancellation.
	Some Last-Minute Changes Say your cruise itinerary changes at the last minute and you decide you’d rather not sail. Your travel insurance won’t be of any assistance in this scenario. Even “cancel for any reason” travel insurance requires you to cancel at least 48 hours before your trip, which doesn’t help if your decision to stay home is truly last minute.
	Bad Weather and Trip Cancellation, Trip Interruption Insurance Learning it's going to rain the entire week of your beach vacation is not a covered reason for canceling your trip with a standard travel insurance policy. Only “cancel for any reason” coverage would help here, if you make the call to cancel no less than 48 hours before your scheduled departure time.
	Pre-Existing Medical Conditions When you file a claim to be reimbursed for hospital bills, the travel insurance company may look at your medical records. If it discovers a history of your medical issue within the “look-back period” (which could be 60, 90 or 180 days before you bought the policy), your claim may be denied. If you have a pre-existing medical condition exclusion waiver, you can be reimbursed for X-rays, lab work, medicine, hospital and doctor bills—up to the limits in your policy—if your condition flares up while you’re on your trip.
	Normal Pregnancy Normal pregnancy usually isn't covered by travel insurance. If you decide to travel while pregnant, medical costs for normal pregnancy care probably won’t be covered, even if you have a pre-existing medical condition exclusion waiver. You may be able to cancel a trip for pregnancy-related reasons if you got pregnant after you bought a travel insurance policy. But you will need to provide medical records proving that the pregnancy started after the purchase date.
	Activities That Involve Drinking or Drug Use Most travel insurance plans won’t cover accidents or injuries that happen as a result of intoxication or drug use. Also not covered? Anything illegal, for example, operating a motorcycle or scooter without a valid license. If you’re involved in an accident when you shouldn’t have been driving in the first place, you won’t be able to file a travel insurance claim.
	Medical Tourism, Medical Exclusions Are you going on vacation for a facelift or a tummy tuck? Don't look to travel insurance for help with the hospital bills or aftercare. Medical tourism is a common exclusion. Elective procedures, mental health care, routine physicals and exams and physical exams are also usually not covered by travel medical insurance.
	Extreme Sports and Activities You might be surprised to learn that many travel insurance companies define some forms of skiing, jet-skiing, mountain climbing and deep-sea scuba diving as high-risk activities that are excluded from coverage. Hangliding is usually always excluded. Read the fine print of your policy before you purchase it so you’re aware of what is and isn’t covered.

How Much Does Travel Insurance Cost?

The average cost of travel insurance is 4% to 6% of your trip costs, according to our analysis.

The trip cost you’re insuring has a significant impact on how much you pay for travel insurance. For example, the average cost of travel insurance is only $61 for a $1,000 trip but a tad over $1,200 for a $20,000 trip.

But trip cost isn’t the only factor that influences how much you pay for travel insurance. Other variables taken into account include the following:

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	Age Your age is also taken into account in travel insurance pricing. That’s because older travelers tend to have a higher likelihood of filing medical claims.
	Amount of Coverage The more protection you buy, the more you’ll pay. For instance, if you opt for a “cancel for any reason” upgrade and generous travel medical insurance expense coverage, you’ll pay more.
	Trip Length A longer trip can cost more to insure because it increases the likelihood that you may file a claim.
	Number of Travelers More people on your trip means more insurance to cover everyone, increasing travel insurance costs.

How to Get Travel Insurance

You can buy travel insurance from a travel agent, website or a travel supplier like an airline or cruise company. We’ve bought travel insurance online and it’s relatively easy. In our experience you can purchase a policy online within a few minutes.

• Start by estimating your non-refundable trip cost. If you’re unsure of your trip cost, estimate the amount and then update it later with the travel insurance company, as long as it’s before your departure date.
• Get quotes online or through a travel insurance agent. To get a quote, you typically need the travelers’ ages (or date of birth), destination and travel dates, and the trip cost being insured.
• Assess policy options and prices. You’ll usually be presented with a selection of policies at different price points, with the more expensive ones usually providing higher coverage levels. Compare the coverage amounts for each line item. Once you select a policy, you can buy it online.
• Review the policy. You usually have two weeks or so to review the policy. If you change your mind, you can get a refund, as long as it’s during the specified review period.

Do I Need Travel Insurance?

Having travel insurance is prudent if you can’t afford to lose the money you paid for non-refundable trip costs if you have to cancel or cut a trip short.

Another factor to consider if you’re wondering if travel insurance is worth it: If you’re traveling abroad, medical expense travel insurance can pay for medical costs, up to the policy limit.

• You usually need travel insurance if:
• Your trip involves lots of pricey non-refundable tours and activities.
• You are traveling internationally where your U.S. health plan may have no or limited coverage.
• You want to be partially reimbursed if you decide to cancel your trip or return home early for any reason.
• Your non-refundable trip costs are much more than you can afford to lose.
• You are traveling to a remote area with limited health care facilities.
• You are traveling to a hurricane-prone area.
• Your trip involves connecting flights or multiple destinations.

What Does Travel Insurance Cover Frequently Asked Questions (FAQs)