Know Before You Go: What Travel Insurance Covers


Find out what kind of coverage you’ll receive if you purchase travel insurance, and where to go for more information.

You’ve spent a lot of money already for your upcoming trip—you’ve at least purchased your airline tickets if not other services for when you arrive, such as your hotel, tours and tickets. Travel insurance is a way to protect what you’ve paid should you be unable to travel. But it’s not a negligible cost—travel insurance averages between 4 percent and 8 percent of your total trip cost.

Here’s a quick primer of what you can expect when you purchase travel insurance, but beware and read the fine print of your policy as not all travel insurance is created equal.

Trip Cancellation & Interruption Coverage

This is generally worthwhile coverage if you’re worried you’ll have to cancel your trip due to health (yours, your travel partner’s or a loved one’s health back home) or if you’ve already paid for any travel-related services at your destination.

If you cannot make your trip—perhaps due to a health reason or a car accident on the way to the airport or your airline cancels your flight—trip cancellation coverage will reimburse your prepaid expenses. If for some reason your trip is interrupted and you must return home (perhaps there’s been a death in the family), then you’ll be reimbursed for the portion of your travels that you didn’t complete.

Of course, coverage is limited to certain acceptable reasons for cancelling or interrupting a trip, so be sure to read your policy carefully.

Medical Coverage

Travel insurance with medical coverage generally covers all medical costs up to a certain amount while traveling. You may have to pay upfront for some costs, so save your receipts to be reimbursed once you get back home. Expenses for medical issues that require hospitalization are typically paid direct from your travel insurance company to the medical facility. (But save those receipts, too, just in case.)

You may also consider purchasing emergency evacuation coverage, which pays for the expense of a medical evacuation to a major hospital. Paying for such an expense on your own could be quite pricey, but be aware of the limitations of this coverage—many policies will not pay for evacuation to treat conditions that were caused by “reckless” behavior (say, rock climbing).

Baggage Coverage

While your airline should cover the cost of any damaged or lost baggage in their care, your travel insurance likely will also cover any expense you may incur as a result, such as buying new luggage or clothes. It will also cover any loss or damage after your baggage is out of transit.

Before you buy

While many airlines and cruises offer travel insurance, it’s best to buy from a third party to get the best coverage and deals.  Learn more about travel insurance through the U.S. Travel Insurance Association, and compare travel insurance options and companies at

And do a bit of research to determine whether you need travel insurance. There are times when it will make sense and times when you likely don’t need it.

If you do purchase travel insurance, be sure to keep all receipts during your travels in case you need to provide them to your travel insurance company for reimbursement later on.

This article contains general information. Individual situations are unique.

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Source: CBS Money watch, The New York Times, USA Today, Rick Steves’ Europe Through the Backdoor
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