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Whether it's a trip across the world or a trip across the state, having travel insurance provides major relief if things go awry. Flight delays, lost baggage, illness, injuries, and other unforeseen events can disrupt even the best-laid plans. With a major disruption comes the potential for unanticipated expenses.
Travel insurance and the coverage it offers can help keep you protected and save you money in the long run.
Travel insurance policies protect travelers from financial losses should something go wrong during their trip. You can customize which coverages you want to include, and there are several to choose from.
"Common types of coverage include trip cancellation, trip interruption, baggage protection, coverage for medical care if you get sick or hurt during your trip, and emergency medical evacuation," says Angela Borden, a travel insurance expert and product strategist for travel insurance company Seven Corners.
Travel insurance plans offer nonrefundable payments and other trip-related expenses. While monetary compensation is a primary benefit, there is another valuable perk of travel insurance. It can provide peace of mind.
Your specific travel insurance plan (and its terms and conditions) will determine the minutia and specifics of what is covered. As with most other forms of insurance, a general rule of thumb is the more you spend, the better your coverage.
"Travel insurance can be confusing, so it's best to research a reputable company that specializes in travel insurance and has a long history of successfully helping travelers all over the world," says Borden.
A travel insurance policy can reimburse you for a prepaid, nonrefundable trip if it is canceled for a covered event, such as a natural disaster or a global pandemic.
Trip interruption insurance covers you if you're already on your trip and you get sick, there's a natural disaster, or something else happens. Make sure to check with your travel insurance providers to discuss any inclusions, coverage, and more.
Travel delay insurance coverage provides reimbursement for any expenses you incur when you experience a delay in transit over a minimum time. Reimbursements can include hotels, airfare, food, and other related expenses.
Typically, US healthcare plans are not accepted in other countries. So travel insurance with medical coverage can be particularly beneficial when you are abroad. Medical coverage can also help with locating doctors and healthcare facilities.
Medical transportation coverage will also pay for emergency evacuation expenses such as airlifts and medically-equipped flights back to the US. Out of pocket, these expenses can easily amount to tens of thousands of dollars. Certain plans may even transport you to a hospital of choice for care.
Travel insurance generally does not include coverage for pre-existing conditions. That said, you can obtain a pre-existing condition waiver, which we will talk about later.
Most airlines will reimburse travelers for lost or destroyed baggage, but be prepared for limitations. Travel insurance plans will typically cover stolen items, such as those stolen out of a hotel room. This may not include expensive jewelry, antiques, or heirloom items. Typically, airlines have a few days to recover your bag.
In the meantime, you can make a claim to pay for items like certain toiletries and other items you need to pick up. If your bag is truly lost or you don't get it for an extended period, you can file a true lost baggage claim.
A major perk on several travel credit cards is embedded credit card travel insurance. Typically, you will need to use the specific card for the transaction (at least with partial payment) for travel coverage to kick in.
Each card has specific rules on what exactly is covered. But one of the industry leaders is the $550-per-year Chase Sapphire Reserve credit card. Here's a snapshot of what is covered with this specific card:
More protections are included with cards with an annual fee, but there are exceptions. The no-annual-fee Chase Freedom Flex, for instance, includes up to $1,500 per person (and up to $6,000 per trip) in trip cancellation and trip interruption coverage.
However, there are some differences between credit card travel coverage and obtaining coverage from a third party.
"Credit card coverage does not typically provide travel medical benefits," Borden says. "For protection if you get sick or hurt while traveling, you'll want a travel insurance plan with medical coverage."
Whether you get your travel insurance in a standalone policy or through a credit card, it's important to review your plan details carefully. In either case, there may be exclusions and other requirements such as deadlines when filing a claim, Borden notes.
Knowing what travel insurance doesn't cover is as important as knowing what it does cover.
"Travelers should understand that travel insurance benefits come into play only if a covered reason occurs," Borden says. Most standard travel insurance plans won't reimburse you for the following:
Cancel-for-any-reason travel insurance covers a trip cancellation for any reason, not just a covered event. your standard benefits won't kick in unless it's a covered event. For instance, you'll be reimbursed simply for changing your mind about taking a trip.
That said, CFAR travel insurance is not without its downsides. For one, it's more expensive than traditional insurance, and most CFAR policies will only reimburse you for a percentage of your travel expenses. Additionally, CFAR policies aren't available for annual travel insurance.
You can find our guide to the best CFAR travel insurance here.
Sudden storms or unforeseen weather events are typically covered by standard travel insurance plans. There are exceptions to be aware of. For example, an anticipated and named hurricane will not be covered.
If you're going to travel internationally for a medical procedure or doctor's visit, your travel insurance plan will not cover the procedure itself. Most medical travel plans also won't cover you if something goes wrong with your procedure.
Those with specific pre-existing conditions, such as someone with diabetes and needing more insulin, will not be covered by most plans. In addition, pregnancy-related expenses will likely not be covered under most plans.
That said, you can obtain a pre-existing condition waiver for stable conditions. In order to obtain a wavier, you will need to purchase travel insurance within a certain time frame from when you booked your trip, usually two to three weeks, depending on your policy.
Accidents occurring while participating in extreme sports like skydiving and paragliding will typically not be covered under most plans. However, many plans offer the ability to upgrade to a higher-priced version with extended coverage.
When a trip goes awry, the first thing you should do is document everything and be as specific as possible with documentation. This will make the claims process easier, as you can substantiate and quantify your financial losses due to the delay.
For example, your flight home has been delayed long enough to be covered under your policy, you'll want to keep any receipts from purchases made while waiting. For instances where your luggage is lost, you will need to file a report with local authorities and document all the items you packed.
Cancellation protection also requires meticulous attention to detail. If you're too sick to fly, you may need to see a doctor to prove your eligibility. If an airline cancels a flight, you'll also need to document any refunds you received as travel insurance isn't going to reimburse you for money you've already gotten back.
Part of the benefit of CFAR insurance is the reduced paperwork necessary to file a claim. You'll still need to document your nonrefundable losses, but you won't have to substantiate why you're canceling a trip.
Each plan should be personalized to meet the insured party's needs. Some travelers prefer to stick to the bare minimum (flight cancellation benefits through the airline). Others want a comprehensive plan with every coverage possible. Before you buy anything, set your destination. Are there any travel restrictions or changes pending? Does your destination country require emergency or other medical coverage?
If the destination airport is known for lost or delayed luggage, travelers should keep important items in carry-ons. Lost or delayed luggage coverage protects insured parties in the event of a significant delay or total loss.
Second, check current credit card travel benefits to avoid redundancies. Savvy travelers don't need to pay for the same coverage twice.
Finally, consider your individual needs. Do you have a chronic medical condition, or do you feel safe with emergency-only medical coverage? Keep in mind, this does not include coverage for cosmetic surgery or other medical tourism. Do you have a budget limit for travel insurance? Asking and answering these important questions will help every traveler find the right product.
Most travel insurance plans are simple, and Business Insider's guide to the best travel insurance companies outlines our top picks. Remember, read your policy and its specifics closely to ensure it includes the items you need coverage for.
No one likes to dwell on how a trip might not go as planned before even leaving. However, at its core, travel insurance provides peace of mind as you go about your trip. While the upfront cost may seem significant, when you compare it to the potential expenses of a canceled flight, emergency evacuation, or a hefty medical bill, it's a small price to pay in the grand scheme of things.
Considering travel insurance?
Business Insider has reviewed the best affordable travel insurance companies to help you find a policy for your budget.
Does travel insurance cover trip cancellations due to a pandemic like COVID-19? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Coverage for pandemics vary from policy to policy. Some travel insurance companies have specific provisions for pandemic-related cancellations, while others may exclude them entirely.
Are sports injuries covered under travel insurance? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Sports injuries are often covered under travel insurance, but high-risk or adventure sports might require additional coverage or a special policy.
Can travel insurance provide coverage for travel advisories or warnings? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Travel advisories have different effects on your travel insurance depending on your policy. Traveling to a country already under travel advisory may invalidate your coverage, but if you're already traveling when a travel advisory is announced, you may be covered.
How does travel insurance handle emergency medical evacuations? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Travel insurance usually covers the cost of emergency medical evacuations to the nearest suitable medical facility, and sometimes back to your home country, if necessary.
Are lost or stolen passports covered by travel insurance? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
Many travel insurance policies provide coverage for the cost of replacing lost or stolen passports during a trip.
