If you have to cancel a costly, nonrefundable trip for an approved cause, travel insurance can provide financial protection. You can get medical coverage through travel insurance if you have a medical emergency. You can sometimes get away without purchasing travel insurance.
The decision to buy travel coverage is based on the individual circumstances of each person, such as their destination, planned activities and health conditions, according to Rajeev Shrivastava. He is also the founder and CEO at insurance marketplace VisitorsCoverage.
Takeaways from the Key Notes
- Travel insurance covers many situations such as trip cancellations and delays, lost luggage, emergency evacuation, medical treatment, and medical care.
- Travel insurance policies cost between 4% and 10% of the total trip price.
- Consider buying travel insurance, especially if you are taking a trip that is non-refundable or traveling abroad.
- You may not need to purchase a separate policy if you already have coverage through your homeowners’, health, or credit card insurance. However, it is still advisable to research the top travel insurance companies prior to your trip.
What is covered by travel insurance?
Travel Insurance Policies typically cover five financial and medical risks.
Trip cancellations, interruptions, and delays
In some cases, prepaid travel expenses, like plane tickets, can be reimbursed if the traveler is ill, dies, loses their job, or suffers a natural disaster. Only the reasons specified in the policy will be covered. Be sure to review all exclusions.
Renting a car and damaging your luggage is a costly mistake
Travel insurance policies may cover personal items or auto rentals, as well as lost, damaged, or stolen luggage. Some policies cover the cost of clothing or other items you bought because your luggage was lost. The auto rental damage waiver will cover any damage to the vehicle or theft. 1
Travel Health Insurance
When your U.S. medical insurance does not cover you, travel insurance will kick in. Even if the country you’re visiting has a free or low-cost nationalized healthcare system, you will still have to pay for it if you don’t live there. 2
Medical Evacuation
If you need to be transported from a remote location to a hospital, medical evacuation coverage will reimburse you. Travel insurance can pay to airlift you to a large-city hospital if, for example, you fall seriously ill on a trek in the Swiss Alps. A medical evacuation to a remote area can cost up to $250,000. It can be included in a travel insurance policy or purchased separately. 3
Accidental Death and Disability
If you are injured or die on your trip, this type of insurance pays out benefits to the survivors. Injury is usually limited to loss of an eye, foot, hand or limb. 1
Most travel insurance policies offer 24/7 assistance in finding medical care, making travel arrangements and contacting loved ones.
What does travel insurance not cover?
Some cancellations are not covered by a standard travel insurance policy. A standard travel insurance policy will not cover you if you cancel a trip to save money. would require you to purchase the “cancel for ANY reason” coverage. Even CFAR comes with its own set of rules. For example, you must cancel within a certain timeframe. 1
Travel insurance does not always cover all losses.
- Costs related to preexisting conditions, pregnancy complications or mental health issues
- Costs of injuries after participation in high-risk activities like rock climbing or skydiving
- Travel interruptions, cancellations, and other losses caused by health outbreaks, natural disasters, or disease outbreaks
- Cancellations due terrorism, civil unrest or warnings from the U.S. State Department 4
You can ask the insurer which exclusions are applicable or check documentation. For example, you may be able find travel insurance that doesn’t exclude injuries from mountain climbing.
What countries require travel insurance?
Since the COVID-19 outbreak is over, many countries no longer require health or travel insurance. Future disease outbreaks may change the requirements. You can find the latest information about health requirements on the websites of the U.S. State Department and the destination government.
Thailand, for example, still requires travelers to have $10,000 in travel insurance if their country has COVID pre-departure tests. The United States does not require pre-departure testing for COVID, so insurance is unnecessary.
Some countries have blanket coverage requirements. Cuba requires U.S. carriers leaving the U.S. pay for every passenger’s medical insurance. Saudi Arabia provides travel insurance to all international travelers entering the country.
Visitors to Qatar are required to purchase health insurance that covers emergency services and accidents from an insurer registered in Qatar. 9
Visas are required in some countries to enter, even for just a few hours. Visitors from the United States who wish to visit Nepal for six months must show proof of an international health insurance plan covering six months.
When is travel insurance not necessary?
If you have health insurance and are taking a quick trip within your country, then travel insurance may not be necessary. According to Jason Eckhoff founder and CEO of BusinessClass.com, who spoke to Investopedia by email, in this case you may not need travel coverage.
Travel insurance is not necessary if your trip includes refundable costs, such as the airfare, and you can cancel without financial penalty.
Travel insurance may not be necessary if you have a credit card that offers substantial benefits. Travel and other credit card can provide coverages such as:
- Trip Cancellation Insurance
- Trip delay reimbursement
- Transport and emergency evacuation
- Accidental death, dismemberment and injury
- Lost or delayed luggage reimbursement
- Insurance for auto damage
- Roadside emergency assistance
Jiten Puri is the founder and CEO at PolicyAdvisor.com. He noted that coverage may be limited. For example, it could only cover basic medical care, or trip cancellations or interruptions.
What is the cost of travel insurance?
travel coverage costs between 4% and 10% of your total non-refundable, prepaid expenses. You might pay between $240 and $600 for travel insurance.
Travel insurance costs vary by insurer. A recent Investopedia review of six insurers’ travel insurance plans offering trip cancellation/interruption, emergency medical/evacuation, and baggage loss/damage found the following ranges:
| Age | Trip Cost | Low Premium | High-Premium |
| 35 | $1,500 | $51 | $69 |
| 65 | $3,000 | $135 | $186 |
Travel insurance costs are affected by:
- Age is the biggest factor in travel insurance rates. Travel insurance may be more expensive for older travelers or travelers with medical conditions.
- Dollar amount and coverage type A policy that offers fewer types of coverage and lower trip costs will cost less than a policy with higher dollar amounts and extra benefits such as insurance for CFAR.
- Trip duration: the longer you travel, you are more likely to encounter risks.
- Numbers of Travelers A trip with 6 people may be more risky (and costlier) than one with only 2.
You should be aware that your application may be rejected or you could face a higher premium if the insurer decides to review it based on its risk standards.
How to find the most affordable health insurance plan
Travel Insurance: When is it Worth the Money?
David Leiter of The World Travel Guy, a blog that focuses on travel, says it’s usually a good idea for travelers to purchase insurance.
- Take a trip that is expensive and has nonrefundable costs
- Travelling internationally
- Visit a remote area without easy access to medical treatment
Eckhoff suggests that you consider buying travel insurance:
- You can have a pre-existing condition as long as your policy covers you.
- You are visiting a place where there is political instability, natural catastrophes or health risks
- Increase your risk of injury or illness by participating in high-risk activities
If you are traveling for longer than six months, the U.S. Centers for Disease Control and Prevention recommends purchasing supplemental travel insurance.2
The U.S. State Department recommends buying travel insurance and checking the country information page for your destination before traveling.
Note:
The CDC recommends that you look for a travel insurance policy which pays directly to providers or hospitals, offers 24-hour physician assistance, emergency medical transport from the U.S. to equivalent countries, and covers high risk activities. 3
When shopping for travel insurance make sure that you choose a plan that suits you, your travel style, and your destination. Choose a policy that covers the most likely scenarios in your situation.
Do I need travel insurance if I have health insurance?
You may be covered by your existing insurance plan for emergency medical care when traveling abroad. Only some health insurance policies kick in while traveling abroad. Check with your health insurer about the coverage you receive while on the road. Ask if preauthorization is required and what exclusions are applicable.
Does my credit card have built-in travel protection?
You may only need to use the built-in travel insurance that comes with your credit card for your trip. If you are primarily interested in trip cancellation insurance, your credit card may be sufficient. You may need to purchase travel insurance if you do not have enough medical coverage on your credit card.
Can I cancel my travel insurance?
Travel insurance and cancellation insurance are two different things. Travel insurance often includes cancellation insurance. Your travel insurance policy might offer reimbursement for cancellations due to certain circumstances, like a death. Travel insurance can cover medical costs, lost luggage, and damage to auto rentals.
Can I protect my possessions with travel insurance?
Your possessions can be covered by your home and renters’ insurance when you travel. This coverage may not be sufficient to cover valuable items like jewelry, or the full cost of replacement. A claim for renters or homeowners insurance could increase your premium.
What are the ways to save money on travel insurance?
Do not buy the first travel insurance you find. Shop around for the best deal and the most comprehensive coverage. Ask for a package that includes travel insurance if you are booking through a tour operator or travel agency.
The Bottom Line
If you are traveling within the country, going on a trip that is refundable or have adequate coverage with your credit card, you may not need to purchase travel insurance. We always recommend travel insurance. Puri warned that travel insurance may be very expensive if you’re in poor health or are elderly.
Puri says that travel insurance can provide “invaluable peace-of-mind.” Travel insurance is a good investment, for example, if you are traveling internationally, and have purchased a non-refundable, expensive trip.
