A Guide to Travel Insurance

Most adults are familiar with insurance.  We have car insurance, home insurance, health insurance, etc.  However, when it comes to travel insurance, many of us are not sure how it works or why we need it.  In this guide, we will explain the pros and cons of travel insurance and whether it is right for you.

What is Travel Insurance?

Travel insurance helps protect travelers from certain kinds of unexpected events that can occur before or during a trip.  Types of coverage vary, but the primary categories include trip cancellation/interruption, baggage and personal goods, and medical expenses.

What Does Travel Insurance Cover?

Travel insurance covers prepaid, nonrefundable costs when they happen during the effective dates of your plan.  Most plans begin on your departure date and end on the day you return.  Coverage for trip cancellation is usually effective starting the day after your plan payment is received (also known as the deposit date).

More and more, travelers are purchasing travel insurance for peace of mind, protection from the unexpected, and for protecting their travel investment.

How Does Travel Insurance Work?

The process for filing a claim is similar to car insurance.  If you have a fender-bender, you file a claim with your insurance company.  If you need to use your travel insurance, you will need to file a claim as well.  Most claims can be filed online or by phoning the insurance company.

All Policies are Not Created Equal

While the following plans are generalized, please be aware that all policies can differ in specifics and it is important to review the terms and conditions for any policy you are considering.  Read the fine print, especially if you are considering insurance offered directly by a cruise line, airline company, or vacation rental company.  In some cases, the insurance may not pay cash to cover a canceled or interrupted travel fare but only offer credit towards future travel with the company.  It is usually beneficial to purchase your travel insurance directly from a travel insurance company.

Canceled/Interrupted Trips

Plane tickets, hotel rooms, cruise fares, etc. are expensive items.  These expenses most often need to be pre-paid and are non-refundable.  If you need to cancel, you could be out the entire cost unless you have Trip Cancellation Coverage.  This insurance will reimburse you for pre-paid, non-refundable expenses covered by this type of plan.

The insurance company must provide you with a list of covered reasons for trip cancellation.  The typical reasons include:

Illness, injury, or death of you, a family member, or a traveling companion

Laid off from work or a change in your work schedule

Natural disaster at your destination or flights canceled due to the disaster

Jury duty selection

Your destination suffers a terrorist incident

Trip Interruption coverage is similar and covers you while you are traveling if any of these scenarios happen to arise.  If you are required to return home, this type of coverage will reimburse you for the lost portion of your trip plus any added charges for flight changes, etc.

Helpful Hint:  While you can purchase your policy anytime before the date of your departure, it is wise to purchase this type of coverage immediately after booking so that you are fully covered in case any type of situation should arise.

Medical Situations

This type of insurance is helpful if you suffer a medical emergency while traveling.  For most travelers, short-term medical coverage is sufficient.  If you are going to be gone for more than a year, you will need major medical coverage.  Again, individual policies can vary, but the following are the most common types of coverage:

Emergency Medical Coverage

This covers the cost of treatment for a medical emergency while traveling.  In addition to medical assistance, some policies will also provide coverage for extended hospital stays and possibly even foreign language services while you are being treated.  Many policies will also provide assistance in locating doctors and medical facilities.

Medical Evacuation & Repatriation Coverage

This type of insurance arranges for medical transport to receive healthcare or pays for your return home – which can be very costly without coverage, depending on where you are.

Accidental Death & Dismemberment (AD&D)

This type of insurance provides monetary payment for loss of life or limb while traveling.  Even if there is a life insurance policy in place, the travel insurance coverage may provide benefits on top of those paid by the life insurance company.

Flight Accident Coverage

This type of coverage provides benefits for accidents and deaths that occur on a licensed commercial airline.

No matter what type of insurance you purchase, make sure you print out your documents and take them with you.  That way, in case of a storm or internet outage, you still have your policy number and contact information readily available.

Is Travel Insurance Right for You?

Generally, we believe that travel insurance is a good idea, but it may not be needed for every type of trip.  You may want to consider insurance if:

You are traveling with children on elderly passengers

You are traveling to a far-off, remote destination

You are concerned about your health

You cannot afford to lose the amount of money you have invested in your trip

Your health insurance doesn’t cover travel abroad

You are taking risks with adventurous travel

You are worried about possible natural disasters or political unrest


Travel insurance can provide peace of mind for that long-awaited trip.  If you have already spent a lot on your travel, it may be wise to insure your investment in case the unforeseeable happens.  Travel insurance is probably not as expensive as you think either.  Shop around and compare quotes before making a decision.  Most travel insurance companies will provide you with multiple options so that you can pick the one that is right for you.

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