Travel Insurance Explained: What It Covers and When You Need It
Travel insurance can save you thousands if a trip is canceled or you need medical care abroad, but it doesn't cover everything. Here's what the main types of coverage do, what's usually excluded, what it costs, when to buy it and when you can skip it.
By Pond.com editors Updated 5 min read
Quick answer
- Travel insurance mainly covers trip cancellation and interruption, medical emergencies abroad, emergency evacuation, delays and lost or delayed bags.
- It's most worth it for expensive, nonrefundable trips and for international travel, where your U.S. health plan may cover little or nothing.
- Comprehensive plans often cost roughly 4 to 10% of the insured trip cost, depending on your age, trip cost and coverage.
- Cancellation only pays for covered reasons listed in the policy, such as illness, injury or a death in the family. Changing your mind isn't covered unless you buy "cancel for any reason" coverage.
- Buy soon after your first trip payment to get the most benefits, such as cover for pre-existing conditions.
Most trips go smoothly. But a sudden illness, a hurricane, a missed connection or a broken ankle on a hiking trail can turn into a big bill, especially abroad. Travel insurance is designed to cover those risks. It isn't right for every trip, and it doesn't cover everything, so it pays to understand what you're buying.
This guide explains the main types of coverage in plain terms. It's general information, not advice on a specific policy.
What travel insurance covers
Most comprehensive plans bundle several types of coverage. Limits and rules vary widely, so always read the policy's details.
| Coverage | What it does | Good to know |
|---|---|---|
| Trip cancellation | Reimburses prepaid, nonrefundable costs if you cancel for a covered reason | Only reasons listed in the policy, such as illness, injury or a death in the family |
| Trip interruption | Pays for unused trip costs and extra travel home if you have to cut the trip short | Also limited to covered reasons |
| Emergency medical | Pays for doctor and hospital care if you get sick or hurt while traveling | Most important for international trips |
| Medical evacuation | Pays to transport you to a suitable hospital or home | Can cost tens of thousands of dollars without coverage |
| Travel delay | Pays for meals and lodging if you're delayed for a set number of hours | Usually has a daily limit |
| Baggage loss and delay | Covers lost, stolen or damaged bags, and essentials if bags are delayed | Often has per-item limits; airlines pay first in many cases |
What it usually doesn't cover
- Changing your mind, or deciding you don't want to go, unless you bought "cancel for any reason" coverage.
- Known events. A hurricane, strike or outbreak that was already named or announced before you bought the policy.
- Pre-existing medical conditions, unless the policy includes a waiver, which usually requires buying soon after your first trip payment.
- High-risk activities such as skydiving, mountaineering or some extreme sports, unless you add coverage.
- Incidents involving alcohol or drugs, and some mental health conditions, depending on the policy.
- Travel to places under certain government warnings, depending on the policy.
When travel insurance is worth considering
- Expensive, nonrefundable trips, such as cruises, tours, safaris or international trips with large prepaid costs.
- International travel, where your U.S. health insurance may pay little or nothing, and a medical evacuation could cost a fortune.
- Older travelers, or anyone with health concerns or older family members whose illness could force a cancellation.
- Trips during hurricane or winter-storm season.
- Remote destinations where evacuation would be complicated.
When you might skip it
- Your bookings are refundable or easily changed, such as flexible hotel rates and airline fares that give credit for changes.
- Short, inexpensive domestic trips, where your health insurance covers you and the cost of canceling is small.
- You're already covered by a credit card's trip protections, an annual travel plan or your employer's coverage.
Check your existing coverage first
- Health insurance. Ask your plan whether it covers emergencies abroad, at what rates, and whether it covers medical evacuation. Original Medicare generally doesn't cover care outside the U.S., though some Medigap plans cover limited foreign emergency care.
- Credit cards. Some cards include trip cancellation, delay and baggage coverage when you pay for the trip with that card. Read the benefits guide for limits and claim rules.
- Airline and hotel policies. Refundable fares and free-cancellation bookings may already give you the flexibility you need.
- Renting a car? Travel insurance plans don't always cover rental cars. Your own car insurance may extend to rentals in the U.S., and some credit cards include rental car coverage. Check both before deciding whether to buy coverage at the rental counter, and remember that U.S. car insurance usually doesn't apply abroad.
What it costs
Comprehensive plans often cost roughly 4 to 10% of the insured trip cost. The price depends on:
- Your age (older travelers pay more)
- Trip cost (you insure the prepaid, nonrefundable amount)
- Trip length and destination
- Coverage level and add-ons, such as "cancel for any reason"
A "cancel for any reason" add-on usually raises the price by a large share, and typically reimburses only 50 to 75% of your costs. It usually must be bought within a short time of your first trip payment.
When to buy it
Buy soon after you make your first trip payment. Many policies only offer their best benefits, such as the pre-existing condition waiver and "cancel for any reason" coverage, if you buy within a short window, often 10 to 21 days after your first deposit. Buying early also means you're covered if something happens before you leave.
How to compare plans
- List what you need covered: trip cost, medical, evacuation, activities and any pre-existing conditions.
- Compare several plans using a comparison site or by getting quotes directly.
- Check the limits, especially medical and evacuation amounts for international trips.
- Read the list of covered reasons for cancellation and the exclusions.
- Check the claims process and the insurer's reviews and ratings.
Where to get help
Travel insurance is regulated by each state's insurance department. If you have a complaint about a claim, contact the insurer first, then your state insurance department.
Common questions
Most comprehensive plans cover trip cancellation and interruption for listed reasons, emergency medical care, emergency medical evacuation, travel delays, missed connections, and lost, damaged or delayed baggage. Exact coverage and limits vary by plan, so read the policy.
A comprehensive plan often costs roughly 4 to 10% of the prepaid, nonrefundable trip cost. Older travelers, pricier trips and extras such as "cancel for any reason" cost more. Medical-only plans for international travel are often much cheaper.
Often only partly or not at all. Original Medicare generally doesn't cover care outside the U.S., though some Medigap plans cover limited emergency care abroad. Many private plans cover emergencies abroad only at out-of-network rates and rarely cover medical evacuation. Check with your plan before you go.
An optional add-on that lets you cancel for reasons not listed in the policy and get back part of your nonrefundable costs, typically 50 to 75%. It usually must be bought within a short time of your first trip payment, and you must cancel at least a couple of days before departure.
Some credit cards include trip cancellation, delay, baggage or rental car coverage when you pay for the trip with that card. Coverage is usually narrower than a full travel insurance plan, and medical coverage is rare. Check your card's benefits guide.