You’ve just booked your long-awaited and much-needed holiday. Great! But there's one more task to organize before you get excited: purchasing travel insurance.
A travel insurance policy can help you avoid a holiday-turned-nightmare, and save you hundreds of thousands of dollars from unforeseen circumstances like a snowstorm delaying your flight, your luggage getting lost in transit, or injuring yourself in a foreign country.
But it might feel overwhelming when you start to shop around, and not all travel insurance is created equal.
Erika Recommends
- World Nomads
Adventure-focused insurance with customizable coverage. - Allianz Travel Insurance
Offers flexible single-trip and annual plans. - VisitorsCoverage
Compare policies across multiple providers.
Common Types of Travel Insurance
The most common travel risks are trip cancellation, medical emergencies, and baggage loss.
These are considered the most essential types of coverage, often included in even the most basic travel insurance plans.
Trip cancellation and interruption insurance
While they sound the same, trip cancellation and trip interruption insurance are slightly different:
- Trip cancellation coverage is for canceling your trip before you leave.
- Trip interruption insurance is for after your trip starts if you need to end it suddenly.
In both cases, you’ll be covered for the costs of the parts of the trip you haven't yet taken.
This means you’ll be reimbursed for prepaid, nonrefundable costs of unused flights, cruises, tours, and hotel packages.
You can also be covered for costs you incur due to the cancellation/interruption, such as meals or transport while waiting for your new flight or the cost of alternative transport to get to your destination.
Covered reasons are typically those out of your control, like bad weather, illness, injury, or death of a family member or travel companion.
Some policies include natural disasters, but check the rules. For example, if a mandatory evacuation is ordered due to a natural disaster in your destination that you couldn’t have known about, you’d be covered. But you wouldn’t be if you purchased your trip after a named hurricane is about to hit.
Also, if you decide to cancel the trip due to bad weather (maybe there’s no sun on the radar for your beach vacay), then you won’t be covered. Similarly, if you simply change your mind and decide to cancel your trip, this typically won't be covered.
You’re also unlikely to be covered if you travel to countries with political unrest or if the government has issued a no-travel advisory.
READ MORE: Which Situations Are Covered by Trip Cancellation Insurance?
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Medical and emergency evacuation insurance
Your home medical insurance probably won’t cover you for medical treatment overseas — which is why you need to buy travel medical insurance.
Most base travel insurance policies include medical and emergency evacuation, which covers doctor visits, hospital stays, and even medical evacuation transport if you’re seriously injured in a remote area — which can normally cost hundreds of thousands of dollars.
Medical travel coverage often won’t include pre-existing conditions unless you buy an add-on waiver, so check the policy’s terms before you buy.
Epidemics are generally excluded, but some insurers have special add-ons for them. For example, Allianz Travel Insurance offers coverage for “certain losses related to COVID-19 and any future epidemic” in some annual travel plans.
Baggage and personal belongings insurance
Baggage coverage reimburses for loss, theft, or damage to your baggage and personal effects.
Make sure you know the limitations and how much compensation you're eligible for if something happens.
For example, maybe your insurance only covers $500 worth of stolen luggage, but your luggage is worth $1,500. Find a policy that at least covers the amount your luggage is worth.
Specialized Travel Insurance Options
There’s also specialized travel insurance that covers specific needs such as adventure travel, business travel, and rental car coverage. You can usually add these to a base policy.
Adventure travel insurance
If you plan to participate in high-risk activities like rock climbing, scuba diving, or skiing, you may not be covered. Most standard plans won't cover injuries from these activities.
However, there are some providers that specialize in adventure travel, such as World Nomads. Their plans cover more than 250 activities, with different tiers for different risk levels — for example, different mountain heights for hiking or climbing.
Other providers, such as Travel Guard, offer adventure travel coverage as an add-on.
Keep in mind that if you don't use a professional, licensed guide or operator where required, your coverage may be denied. Damage to any sports or activity equipment may also not be covered.
Business travel insurance
This is similar to personal travel insurance but covers the costs of business trips. Some plans may allow you to cancel or end your trip early to handle business-related issues.
It is ideal for frequent business travelers, who may not have such insurance through their employer or are self-employed.
These plans also may protect business equipment. For example, Allianz Travel Insurance has an executive annual plan that covers the replacement or repair of business equipment, or for renting replacement equipment if yours has been lost, stolen, damaged, or delayed.
An annual policy may suit better in this case so that it can cover all your trips within the year, no matter how many.
Rental car coverage
Car rental insurance is typically offered to you by the rental company when you pick up your car. It protects against collision damage or theft of a rental vehicle, regardless of whether you were at fault.
This may be helpful, for instance, if the rental company claims you were the cause of damage, even though it was pre-existing.
However, it won't cover costs if you were driving under the influence or from gross negligence.
Many travel insurance policies include rental car collision coverage or offer it as an optional add-on. You also might already have it through your credit card.
Cancel for any reason (CFAR) coverage
Remember when I said you can’t just change your mind and cancel your trip? Well, you actually can if you’ve bought CFAR insurance.
It doesn’t automatically come with your policy and can be expensive. Also, not all insurers offer it. But if you think there’s a good risk you might want to cancel your trip, it might be worth looking into.
For example, maybe you’ve booked a trip to Paris with your friends, but you’re also job-hunting and not sure if you’ll be able to get the time off at your new gig. That might be a reason to get CFAR.
Single-Trip vs. Annual Multi-Trip Insurance
Your insurance can also be tailored to how often you plan to travel during the year, or if you plan to visit more than one destination.
- Single-trip insurance is just as it sounds: It covers one trip. While it can cover longer trips of up to 365 days, you’ll pay more the longer your trip is.
- Annual multi-trip insurance may be more cost-effective if you plan to go on more than one trip in a year. You’re protected for each trip you make for the whole year, saving you from having to re-buy insurance multiple times.
How to decide between the two
If you are certain you will be traveling frequently during the year or are more of a spontaneous or business traveler, the annual option may suit you better.
But annual plans only cover trips up to a certain period, so if your trip is longer, you may need a single-trip plan.
You can also compare prices on the insurer's website — check the price difference of an annual plan versus the hypothetical number of trips you will make.
If you want to compare different providers, there are online marketplaces like VisitorsCoverage and SquareMouth that let you compare polices and prices.
Combining Different Types of Insurance
Finally, travel insurance can be combined and customized to meet your needs.
You want to choose the right coverage for your trip while not paying for what you don't need.
Bundle travel insurance with credit card benefits
Your credit card may come with built-in travel insurance. However, credit card coverage is usually very limited or specific to certain benefits. For example, your card might cover trip cancellation and delay, but not medical expenses.
Check your credit card’s insurance benefits for holes, and then only buy insurance to cover those needs.
“For example, if your credit card includes rental car coverage, you may be able to skip the rental agency insurance offered at the counter,” says travel insurance expert Melanie Musson from Clearsurance.com.
Add specialty coverage to standard policies
Many insurance providers offer specialty coverage as an add-on. These include for adventure travel, car rental, and pre-existing conditions.
However, not all have this feature to add on coverage or may not have the specialty coverage you need. Shop around for the provider that suits exactly your type of trip.
FAQs About Types of Travel Insurance
Is medical evacuation included in standard travel insurance policies?
Most policies that include medical coverage will also include medical evacuation, but the coverage amounts vary. If you’re traveling to a very remote destination, look for a policy with a high limit for emergency evacuations.
Can I purchase adventure coverage as a standalone policy?
Adventure coverage only covers losses due to participating in adventure sports. So, while it’ll cover you if you get injured while heli-skiing, you’re not covered if your flight is canceled by a blizzard. That’s why most providers only offer this coverage as an add-on to their base policies.
Some insurance providers specializing in adventure travel, such as World Nomads, have adventure travel built into all their policies.
Are pre-existing conditions covered under medical travel insurance?
While most travel medical policies do not cover pre-existing conditions, some might offer limited coverage. Or, you may be able to add on a pre-existing condition waiver.
There are usually specific steps to be covered for pre-existing conditions, such as buying the waiver within two weeks of paying your first trip deposit or having your doctor certify that you're medically able to travel.
TL;DR: How To Find the Right Coverage
To choose the right travel insurance, evaluate how you will travel, the destination, activities, and risks. Then, pick several policies that provide the best protection, and compare prices and coverage limits.
Carefully read the terms and conditions so you’re clear on what is covered and any exclusions. The last thing you want is to realize you’re not covered when an emergency strikes.
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