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 minimizes some of that stress by putting money back in your pocket if your adventures go awry. And, if you travel enough, they eventually do.
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- Travel insurance reimburses you for surprise expenses like medical care, flight delays, or if you have to end a trip prematurely.
- Medical insurance is sometimes required, but getting other coverage is smart if your trip includes pricey flights and hotels.
- Before buying travel insurance, check what coverage you already have through your credit cards and regular insurance (health, homeowners, life, etc.).
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What Is Travel Insurance?
Travel insurance covers unanticipated expenses that pop up when you travel domestically or abroad.
These costs might be relatively minor, like replacing your favorite dress that disappeared with your checked suitcase. Or they could be major, like emergency surgery after being charged by a berserk llama in the Andes.
How Does Travel Insurance Work?
The way travel insurance works varies depending on the type of coverage you get, but the process generally goes something like this:
- You pay for your travel expenses (flights, lodging, etc.), preferably with a travel credit card.
- A covered event messes up your travel vibe — e.g., the aforementioned llama drama.
- You pay out of pocket to rectify the situation and collect documentation (like a doctor’s note, receipts, etc.) to prove that the incident occurred.
- You fill out your insurer’s claim form and submit the documentation you collected.
- If your claim is approved, your insurer reimburses you. If it’s denied, you can file an appeal within a given timeframe.
Types of Travel Insurance
There are different types of travel insurance and riders (add-ons) available — so you can ensure you only pay for what you need.
While these are some of the more common coverage types to consider, keep in mind there are many other coverage types out there.
Travel medical insurance
Also known as “visitor’s insurance,” travel medical insurance can reimburse you for the medical expenses if you get sick or sustain an injury outside your country of residence.
U.S. health insurance policies typically aren’t accepted abroad — so even if your benefits plan covers you at home, don’t expect it to on your next vacation.
Trip cancellation
If your airline cancels your flight and you prefer not to be rebooked, you’re legally entitled to a fare refund.
But a trip cancellation policy covers you if other incidents, like jury duty or the death of a family member, force you to cancel your travel plans.
Aside from flights, other prepaid nonrefundable expenses, such as accommodations and guided tours, are also reimbursable with trip cancellation insurance.
Trip interruption
This coverage reimburses you for your nonrefundable, unused expenses if you’re forced to cut your travels short and return home.
Some policies will even compensate you for up to 175% of your trip’s original cost to cover the added expense of buying last-minute transit.
Trip delay
Airlines must refund passengers in the U.S. for domestic flights delayed by more than three hours and international flights delayed by more than six hours.
But they’re not required to provide additional compensation for the inconvenience, and their internal policies for delay compensation tend to be stingy.
A trip delay policy can get you more generous compensation when your flight is significantly delayed — allowing you to enjoy a gourmet meal in the comfort of an airport lounge and avoid the indignity of begging flight attendants for leftover pretzel bags.
Delayed baggage
Airlines are required to reimburse you for “reasonable” expenses you incur due to delayed baggage.
But the Department of Transportation uses inexact phrasing in its baggage regulations, allowing airlines to pick and choose the time period that constitutes a compensable delay and what they consider a reasonable expense.
A delayed baggage insurance policy will likely offer a higher compensation maximum than what the airline will pony up for your delayed duds.
Plus, these benefits could kick in after a period that’s half of what the airline considers a delay.
Accidental death and dismemberment
This type of coverage pays sums generally ranging from $10,000 to $1,000,000 if an accident during a trip results in major trauma, like loss of hearing, limbs, or your life.
Some subtypes apply only to accidents that occur during particularly brief periods of travel or while traveling on a common carrier (trains, planes, cruises, etc.).
How To Get Travel Insurance
Travel insurance can come from many sources, and you might have existing coverage without realizing it.
Take advantage of credit card travel insurance
If you have a travel rewards credit card, check its benefits guide to see what coverage it provides.
Some no-annual-fee credit cards have limited travel insurance, while premium cards like the Chase Sapphire Reserve® provide comprehensive coverage with far more generous terms.
Check your existing insurance policies
International coverage is a relatively rare feature of domestic U.S. health insurance policies, but some policies include limited coverage for emergency medical care abroad.
Home and renters insurance policies may feature off-premises coverage that insures your personal effects anywhere in the world against theft or damage.
For instance, a basic renters insurance policy from Lemonade covers most personal effects up to $10,000, which may make additional lost baggage insurance unnecessary.
Your life insurance policy might apply globally, precluding the need for a separate accidental death and dismemberment policy.
READ MORE: Lemonade Renters Insurance Review: Fast Online Claims Processing
Buy a complementary insurance policy
Once you’ve figured out what travel insurance you already have, use an online insurance marketplace like VisitorsCoverage to compare prices of different travel insurance providers and try to find a policy that closes your coverage gaps.
READ MORE: VisitorsCoverage Review: Policies for Almost Every Type of Traveler
How Much Is Travel Insurance?
The cost of travel insurance varies depending on how long you’re traveling for, what you want included, and your age and medical history.
For example, a 35-year-old American woman going on a two-week trip abroad will pay about $25 for a medical policy with a $100,000 coverage limit and no deductible.
But a more comprehensive, general travel insurance policy that includes medical coverage and other trip protections — like trip cancellation/interruption, trip delay, and delayed baggage coverage — will cost around $185 for a trip with $3,000 in prepaid expenses.
The cost of your own personal travel insurance policy will depend on many variables, including:
- Trip cost: The pricier your transit fares, lodging, and pre-booked activities are, the pricier a trip cancellation or interruption policy will be.
- Planned activities: You’re considered less risk if you’re visiting the Alps to attend the Swiss Yodelling Festival than if you want to try out aerial skiing.
- Trip length: The longer your trip, the greater the risk something will happen to you, and your insurer will need to make a payout.
- Coverage limit: Your coverage limit is the maximum amount that an insurer will reimburse you for your covered travel expenses. The higher the limit, the more expensive your policy.
- Deductible: The lower your deductible, the more your insurer pays on an approved claim.
- People covered: Coverage for your whole family will be more expensive than coverage just for you, and older travelers are more likely to get sick or injured.
FAQ
Is travel insurance mandatory?
Travel insurance is mandatory when entering certain countries. For instance, if you’re visiting the “Land of the Thunder Dragon” (aka Bhutan), you must obtain travel insurance.
Even if you’re visiting a country that doesn’t require you to have travel medical insurance, it’s still an essential item for your travel budget. The State Department advises overseas travelers to buy insurance no matter where they’re headed.
How much travel insurance do I need?
The amount of travel insurance you need depends on where you’re traveling, the activities you have planned, and the overall cost of your trip.
If you found a cheap flight to a highly developed country where you’ll sleep on a friend’s couch, you can probably forgo trip cancellation insurance, and you should be fine with a $50,000 medical insurance policy.
But if you’ve shelled out for a first-class flight and five-star hotels, your trip cancellation policy should at least cover the nonrefundable portion of those prepaid expenses.
And if you’re traveling to a remote or less-developed corner of the globe, consider increasing your medical coverage limit to accommodate repatriation for serious medical treatment.
Does travel insurance cover theft?
Yes, some travel insurance plans cover the theft of your luggage and its contents. But these benefits are typically subject to a maximum coverage amount of a few hundred dollars per item and a few thousand dollars total.
And baggage coverage will likely have exclusions. These may include theft of cash or theft resulting from negligence, like leaving your things in an unlocked vehicle or hotel room.
What does travel insurance not cover?
Travel insurance doesn’t cover events that occurred before your policy was activated. Most standard policies won’t cover the following circumstances either:
- Preexisting conditions
- Injuries sustained during extreme sports
- Claims related to foreseeable events, like a storm that was forecasted before you booked a vacation
- Incidents that occurred while you were intoxicated or under the influence of unprescribed drugs
- Canceling your travel plans because you simply changed your mind
Note that you can add special riders to your policy to cover some of the above circumstances, though it will increase the cost of your premium.
Is Travel Insurance Worth It?
As travel guru and Erika Taught Me podcast guest Sal Lavallo taught us, it’s in our nature to let a single bad travel experience overpower positive experiences. And unexpected bills can easily sour the taste of an otherwise delectable trip.
So, yes, travel insurance is usually worth it, if only to keep our travel memories net positive. But you can limit insurance expenses by buying only the specific coverage you need for your travel style.
A search-and-rescue rider is a good call if you’re planning to hike through Papua New Guinea; it’s less critical if you’re planning to hike through Paris.
If you travel frequently for business, but your trips are short and you rarely check bags, paying for baggage delay insurance might be a waste of money.
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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.
