What Is Travel Insurance? Why Do You Need It?

What Is Travel Insurance?

Travel insurance covers common problems when traveling. From trip interruptions to full cancellations, it can help protect the money you put down for your travel experience.

Common coverage includes more than just an unexpected trip stoppage. It can also cover lost or damaged luggage and changes to your itinerary for covered reasons, among other benefits.

Medical coverage is an important factor to consider because your current health insurance may not work away from home. The best travel insurance includes coverage for medical treatment, dental emergencies, and medical transportation. If you have any pre-existing medical conditions or are at risk, it’s important to make sure your policy covers these, too.

Is Travel Insurance Necessary?

If you travel to select countries, travel insurance is required. A few countries that require travel insurance include Cuba and Antarctica. Other countries like Turkey, Chile, or Egypt highly recommend you get travel insurance before visiting.25

If you’re traveling locally, such as within your state or within your country, you likely do not need travel insurance. You may be covered with some sort of trip insurance through the credit card you paid for your trip with, and you may have adequate health insurance that can cover you if you need medical attention away from home.

Some credit cards, especially those premium travel rewards cards, may provide the following coverages: 

• Trip cancellation insurance
• Trip delay reimbursement
• Emergency evacuation and transportation
• Accidental death and dismemberment
• Lost or delayed luggage reimbursement
• Auto damage waivers
• Roadside emergency assistance

And if you book a refundable trip, travel insurance may not be necessary.

However, if your trip is expensive or it’s in another country, travel insurance will come in handy if something unexpected were to happen. Travel insurance can give you peace of mind that you’ll get some of your money back or that you’re insured in case you need medical attention or another type of help while away from home.

Tips for Picking the Best Travel Insurance for You

When picking the best travel insurance policy, there are a few things you should consider. Here are some tips and factors to think about:

• Look for low pricing and good coverage: Pricing is one of the most significant factors when comparing travel insurance policies. Look for a provider that offers low rates and doesn’t skimp on coverage.
• Don’t settle for the first policy type: Depending on where you’re traveling and how long you’re staying there, different types of travel insurance policies may work best for your situation. For instance, you may need a different policy for a weeklong trip than you would if you plan to travel abroad for several months.
• Match your coverage limits to your travel costs: Travel insurance plans have coverage limits for trip cancellation, interruption, and medical expenses. Look for a plan whose coverage limit matches the amount you’ve spent on your travel plans.
• Don’t forget to look at the exclusions: Some travel insurance plans come with exclusions. If you’re worried about a particular event or accident, make sure it’s covered before you pay for a plan.
• Look for high customer satisfaction ratings: Customer satisfaction is also an important factor when purchasing a travel insurance plan. Look for a provider with high customer satisfaction ratings and a history of good customer service.

What Does Travel Insurance Cover?

Travel insurance may include many different benefits. Here’s a look at some common situations covered by many travel insurance plans:

• Trip cancellation: Usually covers things that may not be refundable, like your hotel or flight, when things like illness or weather-related issues happen.
• Trip interruption: Similar to trip cancellation, you’ll be covered for things that are not refundable if you need to cut your trip short due to an emergency.
• Trip delay: Flight canceled and rebooked for another day? Travel insurance can help cover any money lost with hotel stays or excursions.
• Missed connection: Missed your connecting flight because of other issues? Travel insurance can help reimburse you for your new flight.
• Baggage and possession loss, damage, and theft: You can get reimbursed for lost luggage, plus toiletries, clothing, and other valuables that were in your suitcase.
• Delayed luggage: Need to buy clothes or toiletries because your bag won’t arrive till tomorrow? Travel insurance can reimburse you.
• Emergency medical treatment: Abroad and need to go to a hospital? You’ll be happy you have travel insurance with this coverage.
• Emergency medical evacuation: Need to leave a country quickly and return home for medical attention? Your travel insurance company can reimburse you for the costs.
• Accidental death and dismemberment (AD&D): If the insured person is seriously injured or dies while traveling, a travel insurance policy can pay out a benefit, similar to how life insurance works.

What Does Travel Insurance Not Cover?

Just as homeowners insurance often excludes damage from things like earthquakes and floods, travel insurance has common exclusions you need to know about. Here are some types of coverage you may not get with travel insurance:

• Weather-related cancellations and delays
• Trip cancellations or changes due to acts of terrorism
• Trip cancellations or changes due to a pandemic
• Injuries from extreme sports and high-adventure activities

Though most policies have limits and exclusions around these circumstances, not all do. Some insurers on this list have special coverage for these exact causes or include them in standard plan terms. Again, this is why it’s so important to read your policy documents before paying for and locking in your policy.

How Much Does Travel Insurance Cost?

Travel insurance costs vary widely by coverage and insurer. You can expect to pay anywhere from a few dollars a day to more than $10 a day for short-term and single-trip coverage. The cost of your trip is another major factor in the insurance rate.

A few things impact the cost of travel insurance:

• Trip cost
• Destination
• Length of trip
• Age of travelers

That means insurance for a single trip could cost anywhere from around $20 to hundreds of dollars. Annual policies cost around $500 per year for high levels of coverage.

There are many inexpensive travel insurance plans available, but most travelers are best protected with comprehensive coverage. It costs a bit more, but you’ll be glad you have it if you need to file a claim.

How to Get Travel Insurance in 6 Easy Steps

1. Select a travel insurance company.
2. Apply for the travel insurance plan of choice on the company’s website or over the phone.
3. Provide basic info about who is traveling and their travel plans, like name, age, location of trip, travel expenses, and costs like hotels or airfare.
4. Wait to be approved.
5. Create an online account for easy access while you travel. Some companies may also have an app.
6. Enjoy your trip, and file a claim online or over the phone if needed.