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The ins and outs of travel insurance

Before COVID, travel insurance was often dismissed as an unnecessary expense. But now, we’ve seen how quickly plans can go south (and we’re not talking about southern sunny destinations). Those unexpected changes can cost unprepared travelers. With summer on the horizon, many of us are starting to think about making travel plans—and deciding whether it’s worth purchasing travel insurance when we book.

The basics

Depending on the company and the policy you choose, travel insurance may cover you for:

  • Trip delays or interruptions (e.g., weather disasters or other unexpected issues at your destination)

  • Trip or booking cancellations (e.g., hotel, air, ship or rental car; accident; illness; a death in the family)

  • Medical emergencies (e.g., sudden illness, injuries)

  • Delayed, damaged, stolen or lost luggage, jewelry, documents, cameras or electronics

  • Rental car damage, theft or accident

You can buy insurance directly from a travel insurance company or through your travel agent. Online booking sites, airlines and cruise lines usually offer an option to purchase insurance, as well.

If you buy directly from a travel insurance company, you may be able to choose from a variety of options, such as: single- or multi-trip or year-long policies, coverage for yourself, or coverage for your whole family. Cost, of course, depends on the policy and level of coverage selected. 

Before you start your search

If your trip is refundable and you’re traveling within the U.S., travel insurance may not be needed. Even if your trip isn’t 100% refundable, it may not be worth the cost to cover an inexpensive flight and hotel stay.

Check to see if you have travel coverage through the credit card you’ll use to pay for your trip. Some credit cards provide coverage in case your flight is delayed or canceled, your rental car is damaged, or your luggage is lost or delayed.

However, there are some circumstances in which insurance is generally recommended, such as: 

  • You have to prepay for your trip and can’t cancel without a penalty

  • You’re traveling to an area known for weather disruptions such as hurricanes (check to see whether emergency evacuation is included)

  • You’re traveling outside the U.S.

Important point about international travel: You might want to consider a standalone medical insurance policy, even if you already have travel protection from a credit card. First, check with your U.S.-based health insurer to see what’s covered, since hospital costs in some countries can run $10,000 or more per day, while costs for emergency medical transport home can exceed $100,000.

However…even if your health insurance covers you outside the country, individual doctors may not accept it. Without travel insurance, you’d have to pay the bills out of pocket and get reimbursement from your healthcare insurer.

What’s not covered?

Exact exclusions vary depending on company and policy, but some issues that might not be covered include:

  • Pre-existing medical conditions

  • Performing dangerous activities during your trip (i.e., mountain climbing)

  • War

  • Acts of terrorism

  • Injury as a result of alcohol or drug use, which can be considered self-inflicted damage or even illegal

What about COVID, which is still a factor in our lives? While some travelers who already had a policy in effect before the pandemic were grandfathered into coverage, it’s possible that it won’t be covered if you haven’t purchased insurance yet. Check with the insurer for details.

One last caution: Buy when you book your travel, to be sure it covers any pre-vacation issues that could jeopardize your trip.

Most of the time, your travel will go off smoothly, but it never hurts to be prepared. Just remember:

  • Know what benefits you already have with your health insurance and credit card

  • Carefully consider what could go wrong

  • Compare policies and price shop

  • Know exactly what’s covered under each travel insurance policy

Finally, make your plans and enjoy your vacation, secure in the knowledge that you’ll be protected no matter what happens.