If you haven’t thought about travel insurance for your next trip, you might want to consider it. Even with COVID vaccines on the horizon, your dream vacation is still at risk of being canceled for other reasons. You could lose thousands of dollars if you don’t have travel insurance or the right travel insurance. Here’s what you need to know to decide when and how much travel insurance to buy, or if it is necessary for your trip at all.
Like other insurance policies, travel insurance is a safety net for your wallet. Depending on the policy, it will reimburse you for various losses and/or offer services when something goes amiss, like your destination being locked down or, worse, getting sick on vacation. The two major considerations for purchasing travel insurance are financial risk—if your pre-paid and non-refundable expenses are more than you’re willing to lose should your plans change, or pandemic restrictions pop up—and medical concerns—if your health insurance wouldn’t cover a health emergency abroad.
Most travel insurance is sold as a comprehensive plan with a variety of coverage, although some companies will allow you to customize a policy. Just like other insurance policies, most if not all parts will have a coverage limit—a maximum amount of money the company will pay out—and possibly a deductible you must first pay before coverage kicks in.
Below are common coverages within a comprehensive plan.
Trip cancellation, interruption, and delay
Loss of baggage and personal belongings
Emergency medical assistance, evacuation, and repatriation
According to the U.S. Travel Insurance Association, a comprehensive travel insurance plan will cost you 4% to 8% of the total cost of a trip. Factors affecting this price include trip length, overall trip cost, destination, pre-existing medical conditions, amount of coverage, and your age.
Where to get travel insurance
In addition to coverage from your existing car, health, and renters/homeowners insurance, you may also already have some travel insurance from the credit card you used to make your bookings and reservations. If the card doesn’t offer primary insurance for trip cancellation or car rental insurance, it probably offers secondary insurance—it’ll kick in and pay for damage or loss not covered by the primary insurance plan, i.e. car, health, renters/homeowners. And this coverage is free!
You can purchase travel insurance from your travel agent or through a travel booking site that you’ve used for tours—however, this source of insurance tends to be expensive, have thin coverage, and not allow you to customize the plan.
Or, you can go straight to a travel insurance company. You can buy directly from them or go through a travel insurance comparison website. This route gives you the most options for customization and policy prices, but it will require a little more time and effort to do the research.