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While more and more people are traveling, the Covid-19 pandemic continues to rage and breaking news can alter travel plans unexpectedly. You might be ready to book your next vacation, but it's smart to consider buying a comprehensive travel insurance policy that will protect you from financial losses you may incur due to unexpected issues both before you travel and during your trip.
"Travel insurance is often an overlooked investment until the unforeseen happens," says Beth Godlin, spokesperson with Aon Affinity Travel Practice. "It's designed to give travelers peace of mind and financial protection against the risks of travel."
While some travelers decline purchasing travel insurance because they think it will be costly, Godlin says it doesn't have to be expensive and notes "purchasing it adds an extra layer of protection and security."
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Travel insurance is obviously valuable for big-ticket trips, such as a luxury cruise, safari or multi-city international vacation, but it can even be helpful when you're staying closer to home. "When deciding if travel insurance is right for you, I suggest asking yourself what you could stand to lose if you had to cancel last-minute," says Godlin.
Select spoke to experts in the travel insurance space to get their best advice on everything consumers need to know about travel insurance.
Purchasing travel insurance is relatively easy, and there are lots of different options in the marketplace. If you have never purchased a travel insurance plan, a good place to start are sites like InsureMyTrip.com, CoverTrip or Squaremouth, which lets you compare different carriers based on both price and coverage. You simply fill out a brief questionnaire about the trip and the traveler.
The benefit of using aggregator sites is shoppers have the ability to view the entire travel insurance marketplace and compare policies all in one place. Squaremouth also provides verified customer reviews to help travelers feel confident about the policy they are purchasing.
There is no charge to use Squaremouth, as they receive commission on every sale directly from the provider, and do not charge any type of fee to consumers.
Beyond comparison sites, you can always visit a specific travel insurance carrier's website for a quote or call the company's toll-free customer service number for information.
If you're using a site like Expedia, for example, to book your reservations, you usually have the option to purchase travel insurance, too, through a third-party provider. You should make sure to carefully review the full details of the policy, because the plans are based around the trip elements (hotel, flight, rental car) and could differ every time you book, and you want to make sure you're understand what you're getting.
Travel insurance can vary, but policies generally provide coverage for three things: protection for your financial expenses, protection for your well-being and protection for your personal belongings.
When shopping for a policy, look for these benefits:
Trip cancellation coverage
Your travel insurance policy can reimburse you for prepaid, non-refundable trip deposits if a trip is canceled for a covered reason. These outlays can include airline tickets, hotel rooms, rental cars, tours and cruises, says Daniel Durazo, spokesperson with Allianz Travel Insurance.
Examples of acceptable reasons to cancel a trip include illness, injury or death of the traveler, a close family member or a traveling companion; military deployment or civil unrest; a serious family emergency, even unplanned jury duty.
Other reasons include: your travel supplier stops offering services for 24 hours due to a natural disaster, severe weather or a strike, your home or destination becomes uninhabitable or you or a traveling companion lose your job after you purchase your policy.
You typically can't cancel your trip for any reason and expect to be reimbursed just because you have travel insurance. For example, if you have a fight with your friend and don't want to travel with her, or you change your mind about taking a long-haul flight to Hawaii, these are not covered reasons.
If you want the highest level of flexibility to make changes to your trip, consider adding "cancel for any coverage" to your policy. Cancel For Any Reason (CFAR) plans will bump up the cost of your travel insurance by about 40%, but it gives you latitude to cancel your trip if you need to as long as you meet certain requirements like canceling no later than 48 hours before your scheduled departure.
You won't be reimbursed for 100% of your trip costs. Typically, CFAR coverage will reimburse between 50 to 75% of trip expenses.
Trip delay coverage
Should you experience a hiccup in your travel itinerary, your travel insurance policy can provide some financial relief.
"Travel delay coverage provides reimbursement if a traveler is delayed for one of the policy's covered reasons," says Megan Moncrief, spokesperson with Squaremouth. "This benefit will typically reimburse for expenses such as food, lodging and local transportation that are incurred during the delay."
Covered reasons will generally include severe weather, airline maintenance or civil unrest.
There's often a waiting period before your benefits kick in.
"In order for a traveler to become eligible for this benefit, they must be delayed for the amount of time listed on their policy," says Moncrief. "Some policies are very lenient and provide benefits available for any length delay, while other policies will specifically list a length requirement. This typically ranges from three to 12 hours. All travel delay policies will come with a daily limit, as well as a policy limit ranging from a couple hundred to a couple thousand dollars."
Daily limits typically range from $150 to $250 per traveler, while the policy limit can range from $500 to $2,000, Moncrief says. It's very important to save all your receipts as you will be required to submit them with your reimbursement claim.
Trip interruption coverage
Should you need to cut your trip short due to illness or injury you experience during your trip, or if there's a family emergency back home, your policy may reimburse non-refundable expenses you forfeit if you return home early.
Your policy may also cover the cost of a one-way economy airline ticket home. Not all reasons are covered, however. For example, if your beach vacation is a wash out or you miss your new puppy, your trip interruption benefits won't apply.
Medical expenses and emergency-evacuation benefits
If you're traveling within the U.S., your personal health insurance should cover any illness or injury you sustain while you are on a trip. But if you're traveling to a foreign country, your U.S. based health plan will provide zero or very little coverage, and Medicare isn't accepted abroad, so it's good to sign up for additional coverage.
"Domestic health-care plans are usually not accepted outside the U.S., so it's especially important to get travel insurance with medical coverage and emergency medical transportation when traveling internationally," says Durazo. "If you do become ill or injured while traveling, these benefits can cover your medical costs including doctors' fees and hospital costs."
In addition, your travel carrier's customer support hotline can help. "Allianz's 24/7 assistance team can coordinate your care with the doctors treating you in your destination, as well as ensure you're at an appropriate medical facility up to U.S. standards," he says.
Even more expensive than medical treatment is an emergency medical evacuation, something the right travel insurance policy can arrange and cover. "Medical evacuation and transport costs range from $15,000 to $200,000+, depending on the traveler's health condition and their location in the world," says Durazo.
"If you're heading overseas, you'll need the additional protection of emergency medical benefits and emergency medical transportation benefits," he adds. "And if you're visiting more remote areas, there's always a chance you may need emergency medical transportation to get you to an appropriate health care facility."
Should your checked baggage take a detour and not arrive at your destination, your travel insurance policy could be a saving grace.
"If your travel insurance plan includes baggage benefits, your insurer can reimburse you, up to the maximum shown on the Confirmation of Coverage, for covered loss, theft or damage to your baggage and personal items," says Durazo. "Every plan has specific coverage limits for each benefit, which are outlined in the plan documents."
For example, Allianz Partners' OneTrip Prime plan, covers baggage loss up to $1,000 and baggage delay up to $300 while the OneTrip Premier includes up to $2,000 in baggage loss/damage and up to $600 for baggage delay.
Your personal possessions are also covered if lost or stolen while you're traveling. "Travel insurance can reimburse you for the actual cash value, repair or replacement — whichever is less, based on the limits in your insurance policy's letter of confirmation," says Durazo.
You must report losses to your airline, airport, police or other relevant authority like a tour operator or hotel manager. You will need this documentation when you file a claim.
Not all items are covered by your travel insurance policy. For example, cash is not reimbursable, and many policies won't cover very expensive jewelry, art, antiques or heirloom items. To reduce the risk of losing irreplaceable items, don't bring these items on vacation. And make sure to read your policy carefully to see what is covered.
When it comes to Covid coverage, travel insurance plans can vary from one another, so you should read your policy carefully and ask your insurance provider if you have questions, says Godlin.
Also, regulations around travel have evolved during the pandemic, with some countries requiring specific travel insurance coverage for entry. "As a result, we're seeing new policies emerge to directly meet those needs," she says.
Travel insurance can vary a lot depending on how much coverage you're getting and how expensive your trip is. CoverTrip advises its customers that travel insurance plans cost between 4 to 10% of the total trip cost. So if you're spending $5,000 on a European tour, your insurance could be anywhere from $200 to $500.
Of course, there are budget plans out there that could cost (and cover) less. And you could also shell out for premium coverage so you can take advantage of a "cancel for any reason" policy. Whichever plan you choose, make sure you read the fine print so you understand what you're paying for.
You may have a credit card in your wallet that offers travel insurance. "Travel insurance is a common benefit for credit cards that often comes at no additional cost to the cardholder," says Francis Hondal, president of loyalty and engagement with MasterCard. "It can also be extremely easy to take advantage of it—the key is knowing what coverage you have so you don't waste money on additional coverage you don't need."
Coverage is automatic when you make a relevant purchase, she says. "So, for instance, if you have trip cancellation insurance on a card, you're covered when you book a flight using that card. Same goes for checking your bag and activating your lost luggage protection," Hondal says.
It's important to know if and how you're covered when making travel-related purchasing decisions. Mastercard offers a digital insurance platform, mycardbenefits.com. You can usually find more information on your credit card's website.
To ensure you reap the travel insurance benefits your card offers, you must charge the trip expenses on your card.
"Where credit card travel insurance can shine is if you run into weather problems or mechanical delays, or if you get sick while traveling or even if your luggage gets lost or delayed," says Ted Rossman, senior industry analyst, Bankrate.com.
The Chase Sapphire Reserve® is an industry leader in these areas, he says. It offers up to $10,000 per person and $20,000 per trip in the form of trip cancellation/trip interruption coverage. If you run into a flight delay lasting at least six hours, you can get up to $500 per ticket to book a different flight, stay in a hotel, buy food, etc.
If your luggage is late, you can get up to $100 per day for up to five days to buy necessities.
"If something really bad happens while you're abroad, [Chase Sapphire Reserve travel insurance] will pay for up to $100,000 of emergency evacuation and transportation coverage," says Rossman. "And the Sapphire Reserve also gives primary rental car insurance benefits, meaning that you can decline the rental car company's expensive coverage, and you won't need to go through your personal car insurance if you get into an accident while renting a car."
Rossman says another good pick is the Chase Sapphire Preferred® Card which also has very good coverage although slightly less coverage than the Sapphire Reserve card, in line with a lower annual fee. Even the no-annual-fee Chase Freedom Flex℠ gives up to $1,500 per person and up to $6,000 per trip in trip cancellation/trip interruption coverage, Says Rossman.
For more information on cards that offer travel insurance, check out Select's round-up of the best travel credit cards.