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What Is Travel Insurance and What Does It Cover?

Travel Insurance

Travel insurance covers unforeseen losses incurred while traveling, whether internationally or domestically. The main types of coverage include trip cancellation/interruption, medical, and emergency evacuation.

The best coverages can reimburse you for unused, nonrefundable trip costs for reasons such as severe weather that cancels flights; loss of employment or a job promotion; family illness; a major natural disaster; and jury duty.

Coverage Options

There are many types of travel insurance, and each has a different menu of coverage options. Some cover trip cancellation, while others include medical and evacuation protection. Still others include baggage loss, rental car damage protection and pre-existing condition coverage. In most cases, these policies are sold in packages that bundle these coverages together.

Some comprehensive travel insurance policies allow you to cancel for any reason within a certain time frame without paying a penalty. These are typically more expensive, but they provide more convenience than standard policies.

A few policies include lost luggage coverage, which reimburses you for essentials like toiletries that were in your bags when they were mishandled by an airline or by a cruise line. Most travel insurance policies also offer personal liability coverage in case you are sued for damaging property or causing injury. The type of coverage available varies, and you can find a list of policies and plans by visiting a comparison site such as Squaremouth.

Coverage Requirements

A good travel insurance plan covers trip cancellation and interruption, lost luggage, medical and dental issues while traveling, and emergency evacuation. It typically also includes a 24/7 hotline that can help you find a doctor or book transportation if needed.

Many travelers want to make sure that their policy includes coverage for the COVID-19 pandemic and other epidemic-related events, so look for a “Epidemic Coverage Endorsement” on your plan’s Declarations Page or Letter of Confirmation. These benefits vary by plan.

Some plans allow you to choose a different trip date or cancel for any reason at all (though the cost of the insurance will likely increase). Other policies have more specific reasons you can cancel, such as the death of a family member, military orders, a sudden job lay-off, jury duty and weather events. Some plans also include trip-interruption coverage, which helps reimburse prepaid expenses if you need to cut your vacation short. They often also include a “cancel for any reason” upgrade.

Costs

The cost of travel insurance varies, but it can be a wise investment for big-ticket trips like luxury cruises and safaris or multicity international vacations. The right policy can help cover trip cancellation and lost luggage costs, medical expenses and emergency travel assistance services.

The right travel insurance can minimize the considerable financial risks associated with traveling, including unforeseen trip delays or cancellations due to weather, illness or death of a family member, military orders or CDC stay-at-home warnings. It can also cover the cost of emergency medical transport or getting your body back home if you pass away while overseas.

The best travel insurance policies typically pay secondary, meaning your primary health or homeowners insurance pays first to cover deductibles, copays and maximums. Then, a comprehensive travel protection plan pays up to the benefit limit. Most of these policies exclude chronic illnesses or pregnancies and injuries sustained while taking part in dangerous adventure travel activities.

Policy Options

The types of coverage available under different travel insurance plans vary widely, depending on the insurer and plan type. For example, many plans offer accidental death and dismemberment (AD&D) coverage that pays out a lump sum to your beneficiary should you die on your trip. This can be purchased on its own or as an add-on to comprehensive travel insurance plans. Other common coverages include trip cancellation, loss of luggage and 24-hour traveler assistance. Some plans even cover rental car collision damage, although this is often offered as an upgrade on comprehensive policies or separately by specialty travel insurers.

As a general rule, it’s best to buy travel insurance early in the planning process, before purchasing flights or other major trip elements. This ensures that you’ll be eligible for coverage should an unforeseen event arise. However, it’s possible to purchase travel insurance after booking a trip, but this may exclude certain coverages such as trip cancellation—unless you buy a specialized Cancel for Any Reason policy.

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