Travel insurance can bail you out when your vacation plans get derailed, but like with any other kind of insurance, the details vary by insurer and policy
Most travel insurance policies have some standard protections, such as reimbursing you due to trip cancellation/interruption, providing medical and emergency evacuation coverage, and reimbursing you for baggage issues like lost or delayed luggage.
But there are different reimbursement amounts, add-on options, and more, so it’s important to understand the basics — so you know what to buy for your trip.
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Core Travel Insurance Coverage
Travel insurance most commonly reimburses you for unexpected travel expenses, such as:
- Trip cancellation/interruption: If you have to cancel at the last minute due to a family emergency, for example, or you get injured during your trip and need to come home, trip cancellation insurance can kick in for nonrefundable expenses like prepaid flights and hotels. Depending on the policy, this might cover up to 200% of your prepaid costs, to account for extra charges like booking a new ticket home.
- Medical and emergency evacuation: The amounts vary significantly by plan, but travel medical coverage can help you pay for hospital visits, prescriptions, and transportation back home to be treated in your local medical facility.
- Baggage loss, damage, and delay: Luggage insurance can cover some of the costs associated with losing your bag (like needing to buy some new clothes and toiletries), or reimburse you for damage that requires you to buy a new bag. Limits and coverage details vary by plan.
Additional Coverage Options
In addition to the core coverage areas found in most standard policies, some offer more comprehensive plans or the ability to add on extras for a fee.
- Cancel for any reason (CFAR) insurance: With standard trip cancellation coverage, you need a covered reason to get reimbursed, such as a medical emergency. CFAR coverage lets you cancel no matter what, even if you simply change your mind. However, CFAR might not provide a full refund — perhaps 80% or so.
- Adventure and high-risk activity coverage: Many travel insurance policies exclude high-risk activities like skiing, scuba diving, or bungee jumping. But with some plans, these can still be covered, so if you get hurt doing them, you can still be financially protected.
- Rental car protection: Another added area can be rental car coverage, but keep in mind that your credit card often has good rental car insurance. Compare your options to see what makes the most sense for you.
- Equipment protection: If you're traveling with expensive gear, like photography equipment, you might need an add-on that covers theft or damage to high-value items.
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Coverage Limits and Deductibles
Although travel insurance can financially protect you from what could otherwise be steep losses, it has its limits.
It's important to understand coverage limits and deductibles so you're prepared for still possibly having to pay some money.
Maximum payout amounts
Maximum payout amounts differ by coverage area.
For example, a policy might have a $20,000 maximum payout for trip interruption, to cover costs like prepaid travel you're forfeiting and a new plane ticket home. Meanwhile, the same policy might cover up to $50,000 in medical expenses.
Check the different maximums within the different coverage areas so you can choose a plan that aligns with your risk tolerance. You can usually find these maximums on a provider's website, but if you're unsure, ask before buying.
Deductibles in claims
Like with many other forms of insurance, travel insurance policies can have deductibles, meaning an amount you must pay before coverage kicks in.
That said, travel insurance deductibles tend to be relatively low, such as a few hundred dollars, if at all.
Still, make sure you know the deductible before buying a policy, so you can weigh whether it's worth the cost. And if you do buy a policy with, say, a $250 deductible for medical claims, that can help you determine if it's even worth it to file a claim (such as if the total bill was only $200).
Common Exclusions in Travel Insurance
While travel insurance can cover you in many circumstances, sometimes there are exclusions, such as:
- Pre-existing medical conditions: Some travel insurers exclude pre-existing medical conditions, while others require you to buy add-on coverage.
- Adventure sports: This varies by insurer — some allow coverage for extreme sports like skydiving and mountain climbing, while others don’t.
- Reckless activities: Reckless activities include situations that might ordinarily be covered but your own behavior turned them dangerous, like excessive drinking or going off-trail during a hike. You’re unlikely to be covered in these cases.
Customizing Your Coverage
Not everyone needs travel insurance. Maybe you're taking a low-cost trip and feel you have adequate protection through your credit cards.
But the good thing with travel insurance is you can often customize coverage for your specific needs.
Coverage for luxury or high-cost trips
If you're taking a high-end vacation, or traveling with high-value items, then you might take out a policy with high coverage limits and/or coverage for specific areas like professional equipment.
You might not need all areas of coverage — like comprehensive rental car coverage — but you might choose a higher-tier plan based on higher limits for trip cancellation/interruption, for example.
Coverage for group or family travel
If you’re traveling with friends or family, you might select travel insurance designed for multiple parties. These policies are often more expensive than if you just insured yourself, but on a per-person basis, they're often cheaper.
If you don't see this option available, contact your prospective insurer to see how they handle group/family plans.
Coverage for extended or multi-destination trips
Lastly, if you're taking a very long trip or one with a lot of stops, especially across countries, you might need a more customized plan.
That could involve taking out different policies for different aspects of your trip, or you might choose something like an annual plan or a comprehensive policy that works in all the locations you're visiting.
FAQs About Travel Insurance Coverage
Does trip interruption insurance cover expenses like unused tours or accommodations?
Trip interruption insurance can reimburse you some or all of the amount of unused tours or accommodations. Your trip must be cut short due to a covered reason, such as a medical emergency.
Are alternative accommodations covered if my lodging is unsafe or unavailable?
Trip interruption insurance may pay for alternative accommodations if your lodging ends up being unsafe or unavailable for your stay.
What happens if my travel insurance policy doesn’t cover an activity I planned?
If your travel insurance policy doesn't cover an activity you planned, and it hasn't taken place yet, you can still buy a new policy that gives you some protection, or ask for a rider or add-on coverage to your existing plan.
If the activity has already passed and you got injured, you’re probably out of luck for insurance coverage.
How do I know if I need supplemental medical insurance in addition to my travel insurance?
Look at the policy details, such as what medical events are covered under travel insurance and what your regular health insurance provides (if anything).
If you don’t have health insurance coverage in the area you're traveling to or your travel insurance has low medical coverage, you might want to buy supplemental medical insurance.
TL;DR: Understanding Travel Insurance Coverage
Travel insurance can help protect your trip from a wide range of unexpected losses, like canceled activities or medical bills.
Check what existing protections you might already have, like credit card coverage. Then, look closely at the details of different travel insurance plans (e.g., maximum payouts, add-ons, and exclusions) to decide which plan is right for you.
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