What does travel insurance cover?
The exact coverage boundaries of trip insurance depend on your policy. But any travel policy should protect you against three categories of losses: non-refundable travel costs, such as airfare and hotel bills; costs related to a medical emergency; and losses related to the personal property you bring on your trip.
While some coverages are standard, others are optional — you pay extra to add them to your policy.
Not all travel protection is travel insurance. Insurance policies are often bundled with non-insurance products, like cancellation fee waivers and travel assistance services, according to the National Association of Insurance Commissioners (NAIC). State insurance departments have no oversight over non-insurance product providers, which can limit your recourse if you fail to receive the coverage you pay for.
Trip cancellation, interruption, or delay
Trip cancellation insurance reimburses you for any non-refundable expenses you’ve already paid if your trip starts late, ends early, or needs to be canceled because of a covered emergency. Covered emergencies vary by insurance company and policy, but they typically include:
Illness, injury, or the hospitalization or death of a family member, even if they’re not traveling
Transportation delays and cancellations
Illness or death of host
Mandatory evacuation due to severe weather or a natural disaster
Cancellation coverage usually covers 100% of your prepaid non-reimbursable costs. Interruption coverage may provide more than 100% coverage of prepaid costs if it pays for your transportation home. Delay coverage typically pays a flat daily rate for lodging, transportation, and other costs you incur due to a covered delay.
Baggage and personal effects loss or delay
This coverage reimburses you for baggage and other personal items that get damaged, lost, or stolen. However, it’s secondary to your homeowners or renters insurance — if you have either of those policies, you must submit your claim to that insurer first. Travel insurance will pay for what homeowners or renters insurance doesn’t cover.
Reimbursement for baggage delays covers the costs of any essentials you need if you’ll be without your baggage for a certain period of time, such as 24 hours.
Travel medical insurance
Travel medical insurance covers the cost of treatment for medical and dental emergencies that happen while you’re traveling. These emergencies might include physician and nursing care, hospital bills, ambulance fees, and prescription medications. Dental coverage usually has a much lower limit than medical care — $500 versus $10,000, for example.
If you have your own health insurance policy, your travel medical insurance coverage will serve as secondary insurance.
Emergency medical evacuation
Quality medical care isn’t always available in remote areas, and most health plans, including Medicare, won’t pay for transportation to a properly equipped healthcare facility. These plans also won’t pay for transportation to the U.S. in the case of death or medical necessity. Instead, emergency medical evacuation coverage pays these costs.
Good to Know
Travel insurance companies also usually cover the cost of a travel companion to stay with you while you’re hospitalized. If you’re traveling alone with your children when your emergency happens, this coverage might also reimburse airfare to send them home.
Missed trip connection
A missed connection can force you to start a cruise or travel tour late, and you’ll likely incur additional transportation and lodging expenses to meet the ship or group after it’s already underway. Trip delay and interruption policies cover common carrier issues and weather-related delays, but if you don’t have that coverage for some reason, missed-connection insurance will pay for the added expenses.
Cancel for any reason (CFAR)
Cancel-for-any-reason coverage is usually an add-on to your travel insurance policy. It overrides standard coverage restrictions for covered reasons to cancel your trip.
However, CFAR coverage doesn’t usually reimburse 100% of your prepaid non-refundable expenses like cancelation coverage does. Instead, you’ll be out 25% to 50% of those costs, according to the NAIC.
Unlike stand-alone travel medical insurance, which only covers medical expenses your primary health insurance doesn’t cover while you travel, comprehensive travel insurance includes more coverage.
In addition to covering medical expenses, comprehensive travel insurance also provides trip delay/interruption/cancelation coverage and coverage for lost, damaged, or stolen baggage and personal belongings and other non-medical events.