Here’s what you need to know to get started when shopping for travel insurance.
Booking travel always carries some degree of uncertainty. Travel insurance provides a safety net so you can step out with confidence. Insurance is designed to cover the big financial risks you don’t want to bear alone. You may not need travel insurance for inexpensive trips, but it can provide a sense of security when you prepay for pricey reservations, a big international trip or travel during the COVID-era, which can be unpredictable.
According to insurance comparison site SquareMouth, for the 12-months ended April 2021, travelers spent an average of $234 on travel insurance for trips ranging from two to three weeks, representing just over 6% of the average trip cost.
There are many different policies available, and selecting the right plan depends on your particular circumstances. Follow along as we take a look at the most common travel insurance needs, determine what factors affect the cost, present different travel insurance products, show you how to get covered.
What travel insurance covers
Depending on the type of coverage you’re looking for, the chart below will help you determine what to look for when selecting a policy:
| If you want: | Include this in your travel insurance policy: |
|---|---|
| Payment of medical expenses if you get sick or injured on a trip and need emergency care that’s not covered by your regular health insurance plan. | Travel medical plan |
| To be taken to the nearest hospital or flown home if necessary when you’re injured or you get sick on a trip. | Emergency evacuation and repatriation |
| Reimbursement of nonrefundable reservations if you get sick and have to cancel or end a trip early; reimbursement if you incur extra costs (e.g., lodging) due to a delay by the airline or other carrier. | Trip cancellation, interruption and delay |
| Reimbursement of nonrefundable reservations no matter why you cancel a trip. | “Cancel for any reason” coverage |
| Payment for lost, stolen or damaged baggage. | Baggage and personal belongings |
| Help finding a lawyer abroad. | 24-hour assistance services |
| Payment for rental car damage. | Car rental collision insurance |
Depending on the policy, travel insurance reimburses you or offers services when something goes awry. There’s even coverage for the worst-case scenario: if you die in an accident while traveling. Accidental death coverage pays your beneficiary a lump sum in that case.
Before you buy, take a little time to get familiar with different types of travel insurance products, how it’s priced, and what it covers and excludes. If you’re traveling during these uncertain times, you’ll want to make sure that the policy you select covers coronavirus-related emergencies. Usually, the more thorough the coverage, the more it will cost.
What affects travel insurance cost
According to SquareMouth, for the 12-month period ending April 2021, a comprehensive travel insurance plan averaged 5.9% (domestic trip) and 6.6% (international trip) of the cost of a trip. Generally, the price will vary depending on:
- Length and cost of the trip: The longer and more expensive the trip, the higher the policy cost.
- Cost of local health care: High health-care costs in your destination can drive up the price of trip insurance.
- Medical conditions you want covered: Conditions you already have will increase the cost of travel insurance coverage.
- Amount and breadth of coverage: The more risks a policy covers, the more it will cost.
- Your age: Generally the older you are, the higher the price.
Different types of travel insurance
You’ll find a wide selection of travel protection plans when you shop for a policy. Typically, travel insurance is sold as a package, known as a comprehensive plan, which includes a variety of coverage.
Some insurers and comparison sites let you customize a policy by choosing types of coverage a la carte. For example, TravelInsurance is a comparison site that provides quotes from different providers.
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