Most travel insurance policies offer several types of coverage for travel-related events, such as flight cancellations, medical emergencies and lost luggage. If your budget is tight, even cheap insurance policies can provide a wide range of protection options. In the sections below, we provide an overview of what travel insurance typically covers.
Trip cancellations and interruptions
Trip Interruption and Trip Cancellation Insurance reimburses you for non-refundable expenses when a trip is canceled or curtailed for a covered reason. Covered reasons are usually emergencies or events beyond your control, which may include:
- Acts of terrorism
- Severe weather or natural disaster
- Illness or hospitalization
- Death of a family member
- Legal Department
If you’re worried about booking a trip and then catching coronavirus, some insurers may consider a diagnosis of COVID-19 a covered event. However, cancellation due to fears of the virus may not be covered. As an alternative, many vendors allow you to purchase cancel for any reason (CFAR) coverage, a top-up policy that reimburses costs if you cancel a trip for personal reasons.
Maybe you decide to cancel a trip because you have doubts about traveling during a pandemic or you have other business to take care of. With CFAR coverage, you can get money back with fewer questions asked. However, the amount you receive is generally limited to between 50% and 75% of your prepaid expenses.
Travel delay coverage helps pay for expenses incurred if you don’t get to your destination on time. This includes meals and accommodation while waiting for a delayed flight. Your insurer could also reimburse you for the part of your trip affected by the delay.
For example, if a late flight causes you to miss one night of a prepaid stay, your supplier may reimburse you for this sunk cost. However, insurance companies may have conditions on the length of a delay for your expenses to be covered. Your travel insurance provider should clearly outline these coverage rules in the fine print of your policy.
Lost, delayed or stolen baggage
THE Department of Transportation (DOT) requires airlines to compensate travelers for delayed, lost or damaged baggage up to $3,800 for domestic flights and $1,700 for international travel. However, it could take days for the airline to locate your bag or deem it officially untraceable. Until then, a baggage delay could cause you to incur unexpected costs for clothing or toiletries, and insurance benefits can help cover incidental costs that the airline won’t pay.
Travel insurance also protects your belongings at other times during your trip and can ease things like replacing important travel documents. However, coverage is generally limited per bag or lost item. Alternatively, goods that travel insurance will not pay for could be covered by the owners Or Tenant insurance.
If you are traveling abroad, your national health insurance may not travel with you. Medicare and Medicaid, for example, generally do not track and protect you out of the country. To minimize personal expenses, travel insurance can cover medical expenses such as hospital visits if you become ill or injured while away.
Medical evacuation costs
Travel insurance can cover transportation costs if you or someone covered by the policy becomes seriously ill or seriously injured and needs to be evacuated. Besides emergency evacuation, most travel insurance also covers repatriation if a traveler dies during a trip and their remains need to be taken home.
Accidental death or dismemberment
If you or another covered travel companion dies while traveling or loses a limb or sight, travel insurance may pay a benefit to you or your beneficiary.