Travel insurance can pay you for certain financial losses while traveling, especially as a result of unforeseen circumstances, such as flight delays or emergency medical treatment. However, not everything is covered, so it’s important to know your travel insurance policy before you go on your trip.
learn more: Travel Insurance: What It Covers, Costs, and How to Choose the Right Policy
In its most basic sense, travel insurance will pay you if something goes wrong with your travel plans. This does not mean that you will get paid for any minor accident, as it depends on your policy and whether the incident is covered, but you may be covered in situations that would otherwise cost you thousands of dollars.
For example, if you are on vacation in another country and need to go to the local emergency room after spraining and breaking your arm, your policy may cover hospital expenses.
If this is a reason covered under your policy, you will submit a claim with your insurance provider, including the necessary documents, such as hospital bills.
learn more: The best travel credit cards
Specific travel insurance coverage varies by policy, depending on the provider and plan you choose. Terms and conditions can also vary by policy, but here are some common types of travel insurance coverage (note that names may vary by provider):
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Car rental coverage: Provides reimbursement for rental car theft and collision damage.
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Baggage Insurance: Provides reimbursement for lost, delayed, damaged, or stolen baggage. You may also be entitled to reimbursement from the airline or other responsible party, depending on the situation.
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Emergency evacuation and transportation coverage: Covers emergency medical evacuation and transportation required during travel.
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Emergency medical and dental coverage: Coverage for eligible expenses if you become ill or accidentally injured while traveling.
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Travel Accident Insurance: Pays a certain amount for covered travel accidents, especially for covered damage, such as loss of sight or hearing, or loss of appendages.
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Travel Delay Coverage: Reimbursement for reasonable expenses resulting from covered travel delays, such as flight delays.
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Trip cancellation insurance: Reimburses you for non-refundable and prepaid expenses in the event that you must cancel your trip for a covered reason. This coverage is usually applied before you leave for your trip.
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Travel Interruption Insurance: Reimburses you for non-refundable and prepaid expenses in the event that you must interrupt your trip for a covered reason. This coverage usually applies while you are traveling.
You are ill before your trip and cannot travel
If you have an illness that prevents you from traveling, you should clearly receive reimbursement from your travel insurance policy for refundable and prepaid bookings that you have already made.
Applicable coverage:
Things to consider:
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You may want to consult a doctor and submit their recommendation not to travel as part of the claim process.
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Trip cancellation cover generally only applies if you have not yet departed on your trip.
If you decide to cancel your trip because you feel that a particular destination is not safe, you may not be covered by your travel insurance, although this depends on your policy.
Applicable coverage:
Things to consider:
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Most travel insurance policies will not pay you for non-refundable expenses if you decide not to travel due to your personal feelings or general safety concerns.
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You may be entitled to payment if there is a covered safety reason, such as a government-mandated evacuation of your travel destination or an imminent terrorist incident.
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CFAR Insurance can reimburse you for a percentage of your non-refundable expenses for any reason you decide to cancel your trip.
If your phone or other personal and electronic device is stolen while traveling, you may be covered by travel insurance or your credit card benefits. You generally must provide documentation, such as a police report, to your provider during the claims process to receive reimbursement for stolen items.
Applicable coverage:
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Luggage, personal items, or equipment insurance
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Credit card purchase protection
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Credit card cell phone protection
Things to consider:
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This depends on your policy, but most travel insurance providers offer baggage and personal effects coverage, or something with the same name.
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If you have cell phone protection through a travel credit card, you must pay your cell phone bill with that card to receive the protection benefits.
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Credit card purchase protection only covers new purchases, so it won’t apply if you’ve had your phone for a while.
learn more: How does credit card travel insurance work?
You are injured while traveling and need to go to the hospital
You are generally covered if you need emergency medical or dental treatment for a covered injury or illness while traveling.
Applicable coverage:
Things to consider:
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Emergency medical and dental insurance usually covers sudden and unexpected illnesses, as well as injuries or medical conditions that require immediate treatment.
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You may not be covered if the illness or medical condition is the result of a pre-existing condition.
Flight delays and cancellations are one of the most common travel risks, and likely one of the reasons most people buy travel insurance. Depending on the situation, you may have coverage under your policy.
Applicable coverage:
Things to consider:
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This coverage generally only applies for coverage reasons, such as your flight or a natural disaster that causes a delay. You may also be covered if your travel documents are lost or stolen.
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Often a minimum delay is required before your coverage begins. For example, six hours or more is usually a safe bet, but it depends on your policy.
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Depending on your policy, you may have a daily limit on the amount you can get paid.
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Pre-existing medical conditions: In most cases, expenses arising from pre-existing medical conditions are excluded.
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Known or significant events: A foreseeable event could include a hurricane heading toward your vacation destination. If you still choose to travel, and your trip is affected in any way by the storm, you likely won’t be covered because it was a foreseeable outcome.
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Change your mind: Unless you have CFAR insurance or a covered event occurs, you cannot use trip cancellation or interruption insurance to cancel or end your trip.
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Fear of travel: As with changing your mind, you can’t cancel or end a trip and expect to be reimbursed if you have safety concerns unless those concerns match the reason for the coverage.
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High risk activities and adventure sports: Most policies exclude high-risk sports and activities from their general coverage, but it is possible to add this coverage as a rider or add-on policy.
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Epidemics and Diseases: Unless your policy specifically states that it covers pandemics and epidemics, these known events are likely excluded.
It depends on your policy, but travel insurance generally doesn’t cover pre-existing medical conditions, high-risk activities and adventure sports, or simply changing your mind. However, you can include an add-on for these special conditions or buy a policy that allows you to cancel for any reason.
Travel insurance pays for covered incidents with properly submitted claims. This may include canceling your trip for a medical reason, getting compensation for lost or damaged luggage, and paying for emergency medical care in another country.
What is the difference between basic and comprehensive travel insurance?
Comprehensive travel insurance usually offers more types of coverage and higher coverage limits. For example, a basic policy might include $200,000 in emergency evacuation and return coverage, while a more comprehensive plan might include up to $1 million in the same coverage.
The biggest downside is that this is an additional cost on top of your standard travel expenses, such as flights and hotel stays. Depending on the policy, travel insurance may cost around 4% to 10% of your total trip price. For a trip that costs $10,000, that means paying about $400 to $1,000 for travel insurance.
In addition, most insurance policies have a lot of fine print that you should be aware of. If you do not understand the terms and conditions or the claims process, you may be unsuccessful in your attempt to receive payment, even if it is for a covered reason.
Tim Manny edited this article.
