What Is Travel Insurance and Do You Need It?

A fabulous travel experience can leave its mark on your palate, worldview, and even romantic prospects. But a bad travel experience can leave its share of scars, too — physical and financial.  

Travel insurance eases some of that stress by putting money back in your pocket when adventures go awry. And, if you travel enough, they eventually do. 

What Is Travel Insurance?

Travel insurance protects you from losing money to unexpected events that interfere with your travel plans, like:

• Illness or injury
• Severe weather and natural disasters
• Traffic accidents
• Aviation strikes
• A family member, travel buddy, or business partner’s death
• Getting laid off or hired

Insurance benefits are listed in a contract, or “policy,” between you and an insurance company for a specific coverage period. The policy details who your insurance covers, the circumstances when the company will make a payment, and the amount payable. 

Comprehensive travel insurance insures emergency medical care you may need while traveling, stuff you pack, and money invested in your trip’s flights, hotels, and activities. More limited plans complement coverage already provided by your regular insurance policies or credit cards.

Comprehensive policies with high limits, low deductibles, and few exclusions are pricier than basic policies.

How does travel insurance work?

The process of getting and using travel insurance varies by insurer and coverage type. But it generally works like this:

1. You buy flights, lodging, or tours, preferably with a travel credit card.
2. You review your credit card benefits and regular health, homeowners, renters, and life insurance policies to see if they include travel coverage. 
3. You compare travel insurers (possibly through an insurance marketplace) by submitting your trip details and reviewing their suggested policies. You then select an affordable policy from a reputable insurer that complements your existing coverage.
4. If a covered event occurs during your coverage period, you’ll probably pay for it upfront, then get reimbursed. But your insurer may directly pay major expenses, like hospitalization or emergency evacuation.
5. After collecting receipts and other documents proving the validity of covered events you paid for, you file a claim with your insurer.
6. Your insurer assesses your claim. If it’s approved, you’re reimbursed. If it’s denied, you can file an appeal.

When to buy travel insurance

The best time to buy travel insurance is right after making your first nonrefundable trip purchase, like a flight, hotel, or tour. 

I recommend buying early because:

1. It maximizes your coverage period in case you need to cancel.
2. Many insurers won’t issue policies the day of or after your trip departure. Buying early makes you less likely to miss that deadline. 
3. Some benefits, like pre-existing condition coverage, may apply only if you buy your policy within one to three weeks of your first trip payment. 

If you make more nonrefundable trip payments after buying your travel insurance policy, you can contact your insurer and increase your benefits as needed. 

How to file a travel insurance claim

If an expensive event like an air evacuation or hospitalization disrupts your travels, it may be directly paid for by your insurer. But you’ll likely need to temporarily cover minor expenses yourself, and then request reimbursement.

The first thing you should do before filing a claim is check your insurance certificate to ensure the expense is covered and you’re within the allowed claim period — typically 90 days after the expense.

Examples of covered events will usually be listed under different coverage types, e.g., trip cancellation or emergency medical. Exclusions (events that aren’t covered) should be listed under a “general exclusions” or “limitations” section.

After confirming the expense’s claimability, gather its itemized payment receipts and other related documents. These may include: 

• Tests administered, diagnoses, and prescribed medications printed on medical clinic letterhead
• Travel providers’ cancellation policies or written correspondence indicating they won’t refund your purchases
• Police report confirming property theft 
• Property loss, damage, or delay report from a common carrier or other third party
• Photo of an airport’s flight information system showing your flight’s delay length and a proof-of-delay statement from the airline
• Cruise ship or ferry’s canceled port of call statement

You can usually submit all claim documentation on the insurer’s website or mobile app unless you’re claiming for damaged property, in which case you may need to mail the item to the insurer. 

An insurer can take a few days to months to review your claim and reimburse you, and the process may drag out if your policy’s coverage is secondary rather than primary. 

Given that unpredictable timeline, it’s best to have an emergency fund before traveling to cover expenses until your claim is approved.

What Does Travel Insurance Cover?

Comprehensive travel insurance covers a range of misfortunes that may arise when you’re away from home. Coverage types to look for when choosing a policy include:

Emergency medical/dental

Travel medical insurance is usually a must for international travel, as U.S. health insurance often isn’t accepted overseas, and uninsured medical treatment is expensive, even in developing countries.  

Emergency medical benefits will reimburse the cost of treating unexpected illnesses and injuries that would cause serious harm without professional medical treatment. 

Covered expenses may include:

• Physician consultations, testing, and X-rays
• Anesthesia and surgery
• Hospital stays and nursing
• Prescription drugs and medical supplies
• Treatment for severe toothache, broken teeth, lost fillings, or dental infections 

Emergency medical coverage limits can range from $10,000 to $8 million per policy, with lower treatment-specific sub-limits for stuff like dental care. 

Having at least $50,000 of emergency medical coverage when traveling abroad is a good idea.

RELATED: Domestic vs. International Travel Insurance

Emergency transportation

Emergency transportation coverage pays to transport you to the nearest equipped medical facility if you become seriously ill or injured in an area with limited medical care. 

If you need at least a day or two of hospitalization, these benefits may also cover: 

• Returning dependents to your country of residence 
• Bringing a friend or family member to stay with you through recovery
• Transport to your home country (“repatriation”) after your stabilization, with a medical escort if necessary

Emergency transportation costs vary significantly depending on where your emergency occurs. Aim for at least $50,000 of emergency transportation coverage for urban travel in a developed country and $250,000 for cruises or adventure travel in remote areas.

Trip cancellation

If your airline cancels your flight and you prefer not to be rebooked, you’re legally entitled to a fare refund.

But trip cancellation insurance covers you if other events force you to cancel your travel plans pre-departure. Events covered by cancellation benefits may include: 

• A mental health crisis
• Terrorism in or near your travel destination
• Level 3 or 4 travel advisories issued by the State Department or Centers for Disease Control and Prevention for your travel destination
• Divorce filing
• Being a victim of felony assault, e.g., robbery 

In addition to flights, other prepaid, nonrefundable expenses, like hotels and tours, are also 100% reimbursable with trip cancellation insurance, provided you cancel for a covered reason.

Should you choose to cancel your trip for a reason not listed in your policy certificate — for instance, your pet hedgehog, Quilliam, gets sick and needs you by his side — it’s unlikely you’ll be reimbursed for trip expenses unless you added ”cancel for any reason” (CFAR) coverage to your policy.

CFAR can reimburse 50% to 80% of your prepaid, nonrefundable expenses, no matter why you cancel your trip. But it can also increase your premium price by as much as 60%.

Trip interruption

If a covered event disrupts your travels, trip interruption benefits can reimburse prepaid, nonrefundable costs like: 

• Travel services you miss due to the interruption
• Extra accommodation if you need to stay somewhere longer than planned,
• Transportation to resume your trip or return home 

Covered reasons for trip interruption and cancellation benefits often overlap. But because trip interruption benefits can cover both forfeited and unanticipated expenses, interruption reimbursement limits may range from 100% to 200% of your trip’s original cost, depending on the policy. 

Trip delays

Common carrier delays are very, well, common. More than one in five U.S. flights arrive late to their destinations, according to the Department of Transportation (DOT). 

But U.S. airlines usually won’t give you food or lodging if their flights are delayed for reasons beyond their control, like weather. 

And while overseas jurisdictions like the EU often have more passenger-friendly laws than the U.S., some foreign airlines use shady tactics to avoid their legal delay obligations. 

If you end up stranded during a long delay, trip delay insurance can reimburse various interim expenses, like lodging, food, local transit, a SIM card, pet kenneling, and even movie rentals. 

Some policies cover delays as short as three hours; others kick in for 12-hour+ delays. 

Maximum delay benefits range from $100 to $300 daily and $300 to $3,000 per person, per trip. 

Policies with short delay periods and high expense limits usually cost more.

Delayed baggage

Technically, airlines are legally obligated to reimburse you for “reasonable” items you buy while awaiting delayed baggage. 

But the DOT’s baggage regulations are inexact, allowing airlines to arbitrarily choose what’s considered a compensable delay length and which expenses are reasonable. 

Delayed baggage insurance can make up for the DOT’s regulatory shortcomings by:

• Supplementing an airline’s maximum reimbursement amount with additional compensation
• Identifying delay expenses considered reasonable/reimbursable and unreasonable/unreimbursable
• Covering expenses that an airline may not reimburse, like laundering your carry-on clothing
• Defining qualifying delay periods

Benefits apply to outbound baggage delays lasting a minimum of three to 24 hours, depending on the policy. 

Maximum baggage delay-related reimbursements range from $100 to $2,500 per person, though lower daily limits may apply. 

You’ll need to provide receipts to be reimbursed for specific purchases, but some policies offer a flat inconvenience payment of $100 or so, without requiring proof of purchase. 

Lost or damaged baggage

The DOT recently increased airlines’ maximum mishandled baggage liability during domestic flights to $4,700. 

But international flights’ low liability limits may not cover the cost of replacing everything you packed, and transit laws won’t help if your stuff gets damaged or disappears while outside an airline’s custody.

That’s where travel insurance comes in.

A policy may have both per-item (usually ranging from $100 to $2,500) and per-person ($500 to $3,000) coverage limits for lost/damaged baggage. 

But claims may be subject to fine-print caveats related to:

• Coverage type: Secondary coverage may require filing initial claims through your other applicable insurance policies, like homeowners and renters insurance.
• Exclusions: Fragile items, antiques, art, cash, etc., usually aren’t covered.
• Negligence: Your claim may be denied if you didn’t take reasonable precautions — e.g., you left stolen items in an unlocked vehicle or hotel room.
• Depreciation: An insurer may reduce a covered item’s assessed cash value based on age. 
• Proof of purchase or damage: Your insurer may reduce an item’s assessed value if you don’t have a receipt, and it may deny a damage claim without a photo of the item’s pre-travel condition. 

RELATED: How To Keep Your Valuables Safe While Traveling

Accidental death and dismemberment

This coverage type pays sums ranging from $10,000 to $1 million if an accident during a trip results in major trauma, like loss of hearing, limbs, or your life. 

A coverage subtype applies only to accidents while traveling on a common carrier. 

What Does Travel Insurance Not Cover?

Travel insurance policies often exclude financial losses resulting from:

• Non-emergency medical treatments, like routine care or cosmetic surgery
• Drug or alcohol use
• War, political instability, or travel against a government advisory
• Competitive sports or adventure activities, like rock climbing, caving, hot air ballooning, and high-elevation hiking
• Pre-existing medical conditions
• Epidemics

But those last three common exclusions may be covered by more extensive policies. Or an insurer may allow you to cover them with “riders” — add-ons that let you customize your base policy for a higher premium.

Types of Travel Insurance

Different types of travel insurance suit different travel frequencies and destinations.

Single-trip travel insurance

Single-trip insurance covers one trip to one or more destinations at least 100 miles from your primary residence. Some insurers restrict single-trip policies to 30 days of coverage or less; others cover up to a year of travel per trip. 

This is the most affordable travel insurance policy type for most travelers.

Annual travel insurance

Also called “multi-trip” travel insurance, an annual policy typically covers unlimited trips during one year. 

An annual policy may be more cost-effective than buying separate single-trip policies if you travel at least four times annually. But these plans also have disadvantages to be mindful of:

• Coverage is capped at a maximum number of days, usually 30 to 90, per individual trip taken. So, annual plans may not be as suitable for long trips as single-trip policies.
• Trip cancellation and interruption benefit limits are cumulative across all your trips for the year and are usually low relative to single-trip plan limits.

Credit card travel insurance

You may benefit from automatic travel insurance in certain coverage categories by making trip purchases with a travel credit card. 

Unlike buying a travel insurance policy from an insurer, which offers multiple plans with different coverage levels, credit card travel insurance comes as-is — you can’t increase your card’s policy limits or add riders. 

And no U.S. credit card provides enough emergency medical coverage to meet our recommended international travel minimum. 

But some credit cards provide enough coverage for domestic travel, and supplementing a card’s trip insurance benefits with a separate travel medical policy can cover the rest of your bases abroad.

A credit card’s insurance benefits generally scale with its annual fee. No-annual-fee cards usually provide minimal or no travel insurance, though exceptions like the Chase Freedom Unlimited® include trip cancellation/interruption and auto rental coverage. 

Luxury travel cards like the Chase Sapphire Reserve® offer more coverage types and better terms.

COMPARE: Best Credit Cards With Travel Insurance

How Much Is Travel Insurance?

A travel medical policy with sufficient coverage costs less than a daily cup of coffee for the average traveler. 

But comprehensive insurance — including medical, baggage, and trip coverage — is far more expensive, averaging about 5% of your total nonrefundable trip costs.

Travel medical insurance cost

The average premium for a 10-day travel medical policy meeting the minimum recommended coverage levels — $50,000 and $250,000 for emergency medical treatments and evacuation, respectively — costs about $17 for a 30-year-old traveler from California. 

Here are some examples of affordable travel medical policies from reputable insurers that meet these coverage standards. Policies cover either pre-existing conditions or their acute onset and have no deductible.

Insurer	Policy Name	Sample Premium
WorldTrips	Atlas Travel	$12.90
IMG	Patriot Lite	$13.25
Trawick International	Safe Travels Outbound	$20
GeoBlue	Voyager Choice	$20.80
Tin Leg	Luxury	$22

Comprehensive travel insurance cost

The same traveler will pay an average of around $132 for a comprehensive policy with those emergency medical and evacuation coverage minimums and these minimum trip insurance coverages for $2,500 of nonrefundable expenses:

• Trip cancellation and interruption: 100% of nonrefundable expenses
• Trip delay: $200 per day/$800 per trip for six-hour+ delays
• Delayed baggage: $200 per person for 12-hour+ delays
• Lost or damaged baggage: $150 per item; $750 per person

These are examples of comprehensive travel insurance policies from trusted insurers for the trip and minimum coverage levels described above:

Insurer	Policy Name	Policy Highlight	Sample Premium
Travelex	Ultimate	5-hour qualifying trip delay	$92
World Nomads	Standard	Extensive sports and adventure activities coverage	$103
Allianz Travel Insurance	OneTrip Prime	$100 no-receipt payouts for trip and baggage delays	$136
Faye	International	6-hour qualifying baggage delay	$149
Travel Guard	Preferred	$30K accidental death and dismemberment benefit	$182

Your age, trip cost, trip length, preferred coverages, and state of residence may skew the premium cost.

READ MORE: How To Calculate Your Ideal Travel Insurance Coverage

How To Get Travel Insurance

Finding cost-effective insurance that meets all your coverage needs takes some effort. But careful research can keep your premium low and ensure a smooth claim process if anything goes wrong. 

Review current coverage 

Travel insurance can come from many sources, and you might already have some coverage from your:

• U.S. health insurance, which may cover urgent or emergency medical care abroad
• Homeowners or renters insurance, which may cover theft of or damage to your belongings globally 
• Life insurance, which usually provides a universal death benefit
• Credit card, which may include trip and baggage insurance

Knowing what coverage you already have can help you avoid buying redundant benefits at an excessive premium.

Compare quotes

Use an online insurance marketplace like VisitorsCoverage or SquareMouth to compare policies that close your coverage gaps.

If you need comprehensive coverage, search for trip insurance. If you’re happy with your existing trip insurance, you can search for medical coverage only. 

Most of the info you’ll need to submit for quotes is straightforward stuff like your travel destinations and age. But for trip insurance quotes, there’s some insurance jargon to be mindful of:

• Your nonrefundable trip cost is your combined trip payments (flights, hotels, etc.) that merchants won’t refund and any fees they’ll charge for expenses they will refund.
• The initial trip deposit date is when you made your first payment toward any part of your trip.

After you submit that info, an insurance marketplace will show policy quotes from partner insurers, which you can sort by price. Some marketplaces have quick-compare tools that highlight policies’ coverage differences. 

You can drill down into a policy further by opening its certificate and reviewing its exclusions and pre-existing conditions coverage.

Expand your search

Remember: Although insurance marketplaces are a great way to quickly compare policies, they don’t have partnerships with every insurer on the market. 

To be thorough, check out some quotes from trusted insurers that may not appear in an insurance marketplace’s search results, like Allianz Travel Insurance or GeoBlue. 

More established insurers’ premiums are often pricier than newer competitors. But paying more upfront can be worthwhile for responsive customer service and fair claim assessments.

COMPARE: Best Travel Insurance Providers

Consider riders

Before buying a policy, you might be offered riders to enhance your coverage. Give some thought to your travel destination and potential trip activities before dismissing an insurer’s suggestions.

If you’re planning an urban foodcation in Thailand sans jungle hikes or sea cave kayaking, this $1.90 Adventure Activities rider from Seven Corners Travel Insurance seems like an upsell better spent on moo ping (grilled pork skewers). 

But your definition of “adventure” may differ from your insurer’s. Fine-print scrutiny shows that Seven Corners’ regular, rider-free policy excludes some less overtly adventurous activities from coverage, like hopping on a motorcycle taxi or rental scooter en route to the next street food vendor.

After reviewing suggested riders, you can submit your payment info and buy the policy. 

Many insurers let you modify aspects of your policy as your travel plans evolve, though some charge a small fee to extend coverage dates post-departure. 

You can get a refund by canceling your policy within its “free look” period, which ends 10 to 30 days after your premium purchase (depending on your state of residence), when you depart for your trip, or file a claim — whichever comes first. 

READ MORE: How To Choose the Best Travel Insurance for Your Trip

FAQs About Travel Insurance

TL;DR: Is Travel Insurance Worth It?

Buying a travel insurance policy is worth it if you’re:

• Underinsured for travel. If you don't have super-comprehensive health insurance or a luxury credit card, travel insurance helps protect you from financial risks away from home.
• Traveling abroad. Domestic health insurance usually won’t cover overseas medical care.
• Traveling in a group. Factoring in other people increases the chance you’ll need to cancel or interrupt your travel plans. 
• Caring for dependents or elderly parents. Trip insurance makes sense if your family responsibilities significantly influence your schedule.
• Paying a lot for the trip. It’s a good idea to buy insurance if your trip’s nonrefundable expenses exceed your monthly salary (although your personal risk tolerance may be lower or higher). 

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Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.