Insurance Other Insurance Topics What Is Travel Insurance? Trip Insurance Explained By Lorraine Roberte Lorraine Roberte Lorraine Roberte is an insurance writer for The Balance. As a personal finance writer, her expertise includes money management and insurance-related topics. She has written hundreds of reviews of insurance products. learn about our editorial policies Updated on April 27, 2022 Reviewed by Eric Estevez Fact checked by Meredith Mangan Fact checked by Meredith Mangan Meredith Mangan is a senior editor for The Balance, focusing on insurance product reviews. She brings to the job 15 years of experience in finance, media, and financial markets. Prior to her editing career, Meredith was a licensed financial advisor and a licensed insurance agent in accident and health, variable, and life contracts. Meredith also spent five years as the managing editor for Money Crashers. learn about our editorial policies Sponsored by What's this? & In This Article View All In This Article Definition and Examples of Travel Insurance How Travel Insurance Works What Does Travel Insurance Cover? The Best Time To Buy Travel Insurance How Much Does Travel Insurance Cost? Alternatives to Travel Insurance Do I Need Travel Insurance? Photo: Marko Gerber / Getty Images Definition Travel insurance guards against certain travel-related financial losses resulting from circumstances such as trip cancellations or delays, lost luggage, and even medical expenses while traveling. Definition and Examples of Travel Insurance Travel insurance is a popular type of policy that reimburses you for travel-associated expenses due to unforeseen events such as canceled flights, tours, cruises, and theme-park bookings. It can also cover medical emergencies and delayed suitcases. Travel insurance policies typically have named-perils coverage, meaning they cover only specific instances and losses under certain conditions named in the policy. Alternate name: Trip insurance How Travel Insurance Works Typically, your plan provider reimburses you for a covered financial loss after a claim approval. That means you usually pay for expenses out of pocket first, then receive your money back later. Say you purchase travel insurance for your family vacation to the Bahamas in August. Three days after you arrive, a hurricane hits the island. Everyone is okay, but everything shuts down on the island while you’re there because of widespread flooding and power outages. Travel insurance covering trip interruption can reimburse you for nonrefundable prepaid expenses you weren’t able to use, and change fees to move up your flight. You can purchase a plan through insurers, travel agents, travel insurance providers, travel suppliers, and internet aggregators. Note In prior years, there weren’t industry standards for travel insurance policies. But in 2016, concerns were raised about the lack of regulation. As a result, a travel insurance working group was appointed to address this. Two years later, the National Association of Insurance Commissioners (NAIC) adopted a model law, which covers market regulation, rate regulation, and enforcement. What Does Travel Insurance Cover? Travel insurance typically bundles three types of coverage: trip cancellation, interruption, and delays; medical insurance and evacuation coverage; and 24-hour assistance in case of emergency. Trip Cancellation, Interruptions, and Delays Illness, injury, or deathUninhabitability of your destination from flooding, fire, and other natural disastersWork-related reasons, such as involuntary job lossActs of terrorismOther reasons like jury duty, extended school year due to weather, and more Baggage Loss, Delays, and Personal Effects Lost, stolen, or damaged bags up to your plan limits, such as 75% of actual cash value Cost of personal items due to delayed baggage Travel Medical Insurance Injury and illness medical expenses while travelingMay act as primary or secondary insurance, depending on the policy Note Primary insurance means that you don’t need to use your own medical insurance for covered losses. Secondary means it will only cover medical expenses that your health insurance plan doesn’t cover. Medical Evacuation Insurance Medical evacuation to the nearest hospital Cancel for Any Reason (CFAR) Coverage for trip cancellations for any reason, up to a specified time frameMay give partial refund of 50% to 75% of total price Assistance Services Help arranging medical treatment in an emergencyMonitoring your careHelp replacing lost passportsInterpretation servicesHelp arranging accommodations in an emergency Travel insurance may not offer coverage for: PandemicsPreexisting health conditionsCivil and political unrest at the destinationExtreme sports such as snowboarding and bungee jumpingPregnancy and childbirthFear of traveling to countriesMedical travel Each type of travel protection provided under a travel insurance policy has its coverage limitations and exclusions. Read your policy’s terms carefully to ensure you have the kind of coverage and amounts you think you do. Also, search for any conditions of coverage, such as needing to obtain approval before receiving medical care. When Is the Best Time to Buy Travel Insurance? Many plans allow you to purchase coverage up until the day before you leave. But like other insurance, travel insurance is designed to protect against unforeseeable circumstances. So the best time to buy it is before you need it. You don’t have to purchase travel insurance as soon as you book your cruise, but if you wait to buy it until a named hurricane starts heading toward your destination, any related losses wouldn’t be covered. Some travel insurance providers may also provide bonus coverage if you buy within a certain window, such as within 15 days of making your first trip deposit. How Much Does Travel Insurance Cost? Travel insurance may cost between 4% and 10% of your total trip cost. Factors influencing your price include: Your ageTotal trip spendingCoverage amountsCoverage add-onsNumber of people coveredYour destination locationNumber of days traveling Note Discounts aren’t allowed with travel insurance. Providers must file rates with each state, and they cannot offer discounts off the filed pricing. Alternatives to Travel Insurance Before purchasing travel insurance, check to see if you already have it through other means. Some credit cards include a travel protection benefit when you make travel purchases on the card. Your card may cover trip cancellation, medical coverage, and baggage and personal-effects loss. It can also offer things like rental car damage coverage and death benefits. Another place to look is your home or renters insurance, which can provide coverage if your personal belongings are lost or stolen while traveling. Depending on your policy, you may receive the item’s actual cash value or replacement cost value, up to your policy’s limits. Some common items, such as sunglasses, may be excluded. Note Even if you have coverage for your personal effects under your home or renters insurance, it’s not always worth filing a claim because your deductible may be close to or above the value of what was lost. Your home insurance could even be canceled if you make more than two claims within five years. Do I Need Travel Insurance? Trip insurance can be a good investment if you can’t afford the costs of the following: Losing your prepaid vacation expenses due to unforeseen eventsA return flight home if you need to shorten your trip because of an emergencyMedical expenses while away from home if your health insurance plan doesn’t cover foreign emergency careLost or delayed baggage and canceled or delayed flights, such as an extra night at a hotel or replacing clothes and personal hygiene items Consider that you may already have many of the major protections offered by travel insurance through a credit card. Decide whether that’s enough coverage for you or whether supplementing with travel insurance gives you greater peace of mind. The U.S. Department of State urges consumers to consider their medical insurance options before traveling abroad, such as travel health insurance and medical evacuation insurance. U.S. citizens overseas aren’t provided medical insurance by the U.S. government. Your current health insurance provider may not extend coverage overseas either. Key Takeaways Travel insurance is usually a comprehensive policy that bundles three types of coverage: trip cancellation, interruption, and delays; medical insurance and evacuation coverage; and 24-hour assistance in case of emergency.You may already have a credit card providing many of the same protections covered by travel insurance. Your homeowners' or renters' insurance may also protect your personal belongings.Travel insurance is best for people who don’t already have travel protections through other means. It’s also a good option for those who can’t afford the travel-related financial losses arising from unforeseen events. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. U.S. Travel Insurance Association. "Frequently Asked Questions." National Association of Insurance Commissioners. "Travel Insurance." See "Status." U.S. Travel Insurance Association. "Frequently Asked Questions." See "What Will It Cost?" Berkshire Hathaway Travel Protection. "What Is Travel Insurance All About?" Pages 15-18. Ohio Department of Insurance. "Guide to Homeowners Insurance." Page 12. U.S. Department of State. "Insurance Providers for Overseas Coverage."