Travel Insurance

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Travel Insurance: What It Covers and How to Choose It

Travel insurance protects you from unexpected financial losses and expenses that can occur before or during a trip, such as trip cancellation, medical emergencies, baggage loss, and travel delays. Policies vary widely in cost and coverage; typical premiums run about 4%–10% of the total trip cost (for example, $400–$1,000 on a $10,000 trip).

Key benefits

  • Reimbursement for nonrefundable trip costs if you must cancel or cut a trip short for covered reasons.
  • Emergency medical and dental coverage abroad, including medical evacuation in serious cases.
  • Baggage and personal effects protection for lost, stolen, or damaged items.
  • 24-hour assistance services to help locate medical care, rebook travel, or coordinate evacuations.
  • Optional or add-on coverages (see “Extras” below).

Basic concepts to know

  • Primary vs. secondary coverage
  • Primary travel insurance pays claims first, without you needing to file with other insurers.
  • Secondary travel insurance pays only after other available coverage (e.g., health insurance, airline reimbursement) is exhausted.
  • Policy limits and deductibles
  • Limits are the maximum the insurer will pay (for example, a cap per bag or overall claim limit).
  • You may need to pay a deductible before the insurer pays the remainder.
  • Timing
  • Buy soon after booking—some benefits (including coverage for preexisting conditions) require purchase within a short window after your first trip deposit.
  • Review period
  • Many policies offer a 10–15 day review (free-look) period during which you can cancel for a full refund.

Typical coverage types

Trip cancellation, interruption, and delay

  • Trip cancellation: reimburses prepaid, nonrefundable trip costs if you can’t travel for a covered reason (illness, death in the family, jury duty, severe weather, etc.).
  • Trip interruption: reimburses unused portion of the trip and additional transportation home if your trip ends early for a covered reason.
  • Travel delay: reimburses reasonable expenses (meals, lodging) when travel is delayed.
  • Cancel for Any Reason (CFAR): optional, more expensive, reimburses a portion of trip costs even if your reason isn’t covered (must usually be purchased within a set time after booking).

Medical and evacuation coverage

  • Foreign travel medical insurance covers illness and injury abroad that your regular health plan might not.
  • Medical evacuation/repatriation covers transport to an appropriate medical facility or back home if necessary.
  • Note: Medicare and many domestic health plans provide limited or no coverage outside the U.S.; check your plan before travel.

Baggage and personal effects

  • Covers loss, theft, or damage to luggage and personal items while traveling.
  • Often pays only after airline or other responsible parties’ reimbursements are exhausted and may cap amounts per item.
  • Valuables (jewelry, electronics) may have lower sublimits or require receipts to claim full value.

Rental car and vacation rental coverage

  • Rental car coverage can stand in for the rental company’s collision damage waiver or be secondary to your personal auto policy; usually does not cover liability to others.
  • Vacation rental insurance can cover accidental damage to a rental property and certain cause-based cancellations.

Accidental death and dismemberment (AD&D)

  • Pays a lump sum for accidental death or specified serious injuries sustained during travel.
  • Often not necessary if you have adequate life insurance, but can be additive.

Common exclusions and limitations

  • Preexisting medical conditions (unless a waiver applies).
  • Pandemics, civil or political unrest, and acts of war may be excluded.
  • Routine medical care and elective treatments.
  • Pregnancy-related conditions after certain gestational ages.
  • High-risk activities (some extreme sports) unless you purchase an adventure-sports rider.
  • Items seized by customs or not properly reported.

Optional add-ons and niche coverages

  • Identity-theft resolution services
  • School trip or student activity coverage
  • Destination wedding coverage
  • Adventure-sports coverage (skiing, scuba, climbing)
  • Pet-related trip cancellation reasons
  • Missed-connection protection

How to buy travel insurance (step-by-step)

  1. Inventory your needs: trip cost, destination, length, activities, and travelers’ ages and health conditions.
  2. Check existing coverage: homeowners/renters, auto, health insurance, and credit card benefits may already cover some risks.
  3. Compare policies online, through travel agents, airlines/cruise lines, or independent insurers and brokers.
  4. Look for:
  5. Medical limits and medical-evacuation coverage
  6. Trip cancellation/interruption covered reasons and limits
  7. Baggage limits and per-item sublimits
  8. Whether coverage is primary or secondary
  9. Preexisting condition waiver requirements (purchase timing)
  10. Exclusions for destinations or activities
  11. Complete the application with trip details (dates, destination, cost, payment date). If accepted, review the policy during the free-look period and return it for a refund if unsatisfied.
  12. Keep copies of receipts, medical records, police reports, and airline/property reports to support any claim.

When you should consider buying travel insurance

  • You’ve prepaid significant, nonrefundable trip costs.
  • Traveling internationally without adequate health coverage at destination.
  • Planning activities with a higher risk of injury (skiing, scuba diving) unless you can accept the out-of-pocket risk.
  • Traveling to areas prone to weather disruption, political instability, or where evacuation costs could be high.

Ways to save or avoid buying travel insurance

  • Use credit cards that include travel protections (baggage delay, trip cancellation/interruption) when you book.
  • Rely on homeowners or renters insurance for belongings, where applicable.
  • Choose flexible or refundable travel bookings and options that let you cancel or reschedule without heavy penalties.

Filing a claim: practical tips

  • Report incidents promptly (airline baggage claims, police reports for theft).
  • Keep documentation: receipts, photos, medical records, and correspondence.
  • Follow insurer claim procedures and deadlines closely.

Bottom line

Travel insurance is a useful safety net for many travelers—especially those with expensive, nonrefundable plans or limited international medical coverage. Evaluate your existing protections, the cost of potential losses, and policy details (limits, exclusions, primary vs. secondary status) before buying. Pay particular attention to medical-evacuation limits and coverage for preexisting conditions and planned activities.

Sources: National Association of Insurance Commissioners (NAIC); U.S. Department of State; Medicare.gov; state insurance departments.