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Travel insurance: What it covers and why you might need it

What we'll cover

  • What travel insurance covers

  • How much travel insurance do you need

  • When should you get travel insurance

You’re checking out flights, narrowing down your list of must-see attractions and mulling over a vacation rental vs. a traditional hotel . Before you book your trip, you may want to consider one more item to add to your to-do list: travel insurance.

If you’re wary about the idea of travel insurance or if it seems like an additional, unnecessary expense, you’re not alone. There’s a lot of skepticism around this type of coverage. Deciding if it’s right for you depends on a number of factors. Carefully consider your situation and your options before purchasing a policy.

What does travel insurance cover?

When you spend a lot of money on a trip, you naturally want it to go as smoothly as possible. But despite the best of intentions, sometimes events out of your control can threaten to put on a damper on a perfectly planned trip. Lost luggage, illness, flight cancellations and more are unfortunate potential realities when you head out on a vacation or business trip.

Travel insurance can help protect against a number of these worst-case scenarios, but that depends on what kind of coverage you get and who you get it from. You can purchase a policy through a third-party insurer, or you may be able to buy coverage for specific aspects of travel through that vendor. For instance, you can purchase flight insurance through your airline. Not sure what kind of policy you need (or if you need it at all)? Take a closer look at some common types of coverage before you make the call.

Comprehensive travel insurance

To cover trip cancellations and interruptions, bad weather, lost baggage, medical care and more, comprehensive travel insurance generally offers the broadest coverage. The most all-encompassing coverage for your trip, comprehensive travel insurance policies will cover many of your trip-related expenses from lost luggage to airfare to hotel costs and illness. If you’re looking for general peace of mind or worry about potential cancellations, this might be a good fit.

Travel insurance can help protect against a number of these worst-case scenarios, but that depends on what kind of coverage you get and who you get it from.

Rental car insurance

Are you planning on renting a vehicle to get around during your trip? There’s a good chance your rental agent will offer coverage for it. Here are some things to consider: If you own a car at home, your auto insurance likely covers rentals, so be sure to carefully read your policy before you book. In addition, your credit card could provide coverage for rental cars too.

Some scenarios might call for additional coverage. For instance, you likely already have liability insurance, which covers other drivers’ property as well as injuries from an accident you cause. Say you have $10,000 in liability coverage at home, which may be plenty. But if you’re traveling to an area in which luxury vehicles are common, you might want to up that amount in the form of additional coverage from the rental car company. Thoroughly check out these options before you determine if you need an additional policy.

Flight insurance

Purchasing plane tickets comes with a lot of choices. Business class or coach? Aisle or middle seat? But do you ask: Do I need flight insurance? This type of coverage is offered by both airlines and third-party insurance carriers and covers the cost of your flight. Some scenarios typically covered by these policies include inclement weather that causes flight cancellations, equipment failure that leads to delays and mid-flight diversions. Depending on your provider, this coverage might also reimburse you for lost or delayed baggage and may provide rebooking assistance if your flight is changed.

Financial default coverage

You’ve put a lot of time, money and energy into booking your travel plans. Even with proper preparation, life happens. A tour operator, airline, cruise line or another travel vendor could unexpectedly go out of business before or even during your trip. A financial default policy exists for exactly this situation and can help keep you on track, even if your trip is derailed by an unlucky event.

Medical coverage

No one wants to think about being sick or injured while on vacation, but it can happen. You may assume your health insurance at home will cover any medical care you need while you’re away, but that’s not always the case. It’s important to know your policy and how it works when you’re not at home.

For instance, both Medicare and Medigap typically don’t offer health insurance coverage outside of the United States. While some private insurance policies do offer coverage for international travel, you may still need to pay bills abroad that your insurer pays later. Consider your plans too. If you are engaging in riskier or high-adventure activities like extreme sports, you may want to buy additional medical insurance expressly for your trip.

What is excluded from travel insurance?

Although getting coverage can protect you financially from a number of things that go wrong during travel, it’s important to remember travel insurance doesn’t protect against everything.

Just as you would with life and auto insurance, carefully read the fine print. While specifics will vary from policy to policy, some common exclusions are:

  • Pre-existing health conditions

  • Civil and political unrest at your destination

  • Pregnancy and childbirth

  • Coverage for risky activities like bungee jumping, ziplining, snowboarding, etc.

When is travel insurance unnecessary?

You have a lot to consider when you head out on a trip, and travel insurance can feel like just another item on your to-do list. Deciding whether you need coverage depends on your budget as well as the nature of your trip. Say you’re visiting a friend for the weekend in another state. There’s probably a lot less risk involved in that trip compared to an overseas vacation with multiple stops and flights. Consider how much money is at stake and how much you would have to spend to protect it with travel insurance. This cost-benefit analysis can help you decide if coverage is a worthwhile investment.

When is travel insurance worth it?

Before making a decision on a policy, take inventory of the kinds of coverage you already have through your credit cards and your life, health, and auto insurance. You’ll also want to take stock of your situation — your age, health and the odds that you’ll have to cancel your trip at the last minute or return home midway through a vacation. Then, ask yourself: How much money can you afford to lose?

While shorter, less complicated trips may not necessitate insurance, longer, more complex trips are often more worthy of investing in a policy. Imagine you’ve been planning a Caribbean cruise for months when a hurricane threatens to ruin your good time. Or perhaps you’re going on a once-in-a-lifetime European adventure when your child gets sick right before you depart. When these unexpected events happen out of your control, travel insurance can offer valuable protection.

If you’re traveling internationally, trip insurance can be particularly helpful. Not only can it help protect you financially, but coverage can also safeguard your health if you become unwell or have an accident. While your health insurance will likely cover you if you’re traveling within the United States, some policies will not offer protection if you get sick or injured while out of the country. Ultimately, it’s up to you, your travel plans, and your financial situation.

Weigh the value of travel insurance

Before you land at your final destination, you have a lot to think about. From finding the best accommodations to getting a great deal on airfare, going on a trip involves many decisions. Before you book your next getaway, consider whether you should add travel insurance to your vacation to-do list. Will the coverage provide the protection you need to enjoy your vacation? Or will the extra cost distract you from your relaxing getaway? Remember, there’s no right or wrong answer, just the right fit for you.

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