Do your eyes glaze over at the mere mention of travel insurance? You’re not alone. Ours did, too, so we did some investigating. There’s no quick and easy answer to when or whether you should buy coverage. Sometimes it makes sense, sometimes it doesn’t. Below, answers to a few frequently asked questions.
IN SIMPLE TERMS, WHAT IS TRAVEL INSURANCE?
Travel insurance is a guarantee that you will be compensated in the event that you lose or damage your things or yourself, plain and simple. When it comes to your trip plans, it means you pay a premium up front so that, in the case of flight delay, lost luggage, a cancelation, etc, you get some (or all!) of your money back.
Exactly what is insured and what is not depends on the type of coverage you purchase — trip cancellation, trip interruption, baggage protection, medical event, emergency evacuation, and accidental death and dismemberment are the categories you’ll see most often.
Insurance is usually sold in comprehensive vacation plans (a mix of all forms of coverage), medical plans (health-related expenses abroad), or specialty plans (i.e. for extreme-sports-related incidents).
WHAT AM I COVERED FOR IN EACH CATEGORY?
Trip cancellation: You’re reimbursed for pre-paid, non-refundable expenses (like airfare, cruise tickets, hotel rooms, theme park passes, tours, excursions, and charters) if you need to cancel your trip before it starts. What counts as a valid reason for canceling a trip? There are many: You, your travel buddy, or a non-traveling family member gets sick, injured, or passes away. You need to stay home for work. A hurricane cancels your flight or renders your hotel uninhabitable. A terrorist attack occurs in the city you’re planning to visit. You get called for jury duty. The list goes on, though not everything is covered. To get a refund for canceling a trip due to concerns of civil unrest, for example, you’ll have to tack on optional “cancel for any reason” coverage.
Trip interruption: If you need to cut your vacation short for roughly the same reasons covered under trip cancellation, you will be refunded for any lost pre-paid, non-refundable portion of your trip (plus return airfare).
Baggage protection: Let’s say your luggage is lost, damaged, or stolen during any portion of your trip. You can get reimbursed for your personal belongings and any essentials you buy while waiting for luggage to return (clothes, toiletries). The amount you will receive will depend on the plan you select and your ability to produce receipts for the stolen overpriced handbags and cashmere.
Medical: Should you need emergency medical care for anything from G.I. issues to sprained ankles to strange bug bites (or worse), you’ll be covered for some or all of your hospital expenses. Some plans will assist you in finding an adequate hospital where you can receive proper care in your native language, sparing you potential healthcare horror story.
Emergency evacuation: Make sure any plan you select includes coverage for transportation during a medical emergency. Otherwise, be prepared to pay: Ambulance and medically-equipped plane transfers, even on minor trips, can costs tens of thousands of dollars. Evacuation due to a natural disaster is usually covered under trip cancellation or interruption if it is mandatory and has not been forecasted at the time you purchased insurance. Evacuation due to political unrest abroad is its own category and is sometimes covered under medical evacuation or larger vacation plans.
Accidental death and dismemberment: If you lose a limb or pass away as a result of an accident while traveling, the insurance company will pay benefits to you or your beneficiary. If you have a good life insurance policy, you don't need to purchase this type of coverage.
WHEN SHOULD I GET TRAVEL INSURANCE?
The choice is up to you. It's recommended when booking big-ticket items far in advance (like safaris and cruises), when the trip plans are complicated (so it doesn’t all come crashing down if one part goes wrong), when the destination is deemed high-risk (it's expensive to get a medi-vac from Antarctica), or if you are an extremely nervous traveler (for peace of mind).
WHEN CAN I SKIP TRAVEL INSURANCE?
When the trip you are taking is short, spontaneous, and/or inexpensive. Or when you are traveling domestically, and medical care is already covered under your pre-existing health insurance. If you’re using miles, not checking bags, staying at an Airbnb, and otherwise keeping costs low, travel insurance may not do much for you. Just don’t skip travel insurance because you think you’re already covered. Most credit cards and health insurance providers, including Medicare, don’t cover medical care or evacuation abroad. Assuming airlines, cruise lines, and tour operators will reimburse you if you cancel because your situation is dire is a recipe for disaster.
HOW DO I SELECT THE RIGHT TRAVEL INSURANCE PLAN?
After looking through your itinerary to forecast where things might go wrong, find out what coverage you already have through your credit card and health insurance policies, then fill in the blanks. Are you booking a cruise a year in advance that requires a connecting flight to board? You want trip cancellation coverage. Taking a hike in Chile? You want medical and emergency evacuation coverage and hazardous sports coverage if you’re being more adventurous. Make sure you understand what your plan doesn’t cover. For example, many policies that cover sports-related accidents won’t cover dangerous pursuits like bungee jumping. Likewise, you’ll be out of luck if you cancel a trip for a sick relative and they’re not covered as an immediate family member under your policy.
HOW DO I KNOW I'M GETTING A GOOD DEAL?
Once you’ve found a plan that works for you, how do you know that what you’re buying isn’t a rip off? Prices fluctuate based on factors like your age, where you live, and the nature of your trip, but travel insurance will usually cost between four and eight percent of your trip’s pre-paid, non-refundable cost. (It will be slightly higher if you opt for “cancel for any reason” coverage or take a risky trip.) Once the cost checks out, read the fine print to make sure you’re getting what you pay for, especially if the price seems too good to be true.
WHERE SHOULD I BUY MY POLICY?
You can tack on travel insurance when booking flights, cruises, and tours online, but it’s better to buy directly from an insurance provider, a travel agent, or a third-party online aggregator like Squaremouth. Don't go crazy comparison shopping, but keep in mind Travel Guard if you want to build out a comprehensive plans, HTH Worldwide if you want straightforward travel medical insurance, and World Nomads if you want the most bang for your buck for trips under $10,000. Plans from travel operators (like airlines, cruises, or OTAs like Kayak) are usually skimpier and may encourage you to rebook with the same airline, cruise, or tour company — and you'd rather want money back than a store credit.
DOES IT MATTER WHEN I BUY TRAVEL INSURANCE?
You can purchase insurance up until the day before your trip, but it’s best to buy it right after booking flights, tours, hotels, etc., just in case something happens the day, week, or month after you’ve squared away your travel plans. Another perk of signing up right away: Many plans will throw in coverage for pre-existing medical conditions free of charge.
IF THINGS GO WRONG, HOW DO I FILE A CLAIM?
To submit a claim, most plans require that you provide hard proof of what went wrong. Check with your provider long before traveling so you know which receipts to safeguard. Common forms of proof include a doctor’s note if you cancel your trip due to medical concerns, a medical bill if you visit a hospital while abroad, or receipts for your suitcase and everything in it if you want money back for lost luggage and belongings. Alternatively, if purchase a plan with fixed benefits, like one from Berkshire Hathaway Travel Protection, you can submit certain claims digitally (sometimes with a picture) to get a set amount of money wired to your bank or Paypal account immediately. Otherwise, be prepared to play the month-long waiting game after filing a claim.