Purchasing travel insurance before an expensive trip can provide additional peace of mind, as its benefits are generally more extensive than the benefits of credit card protection. However, it is essential to know what travel insurance covers to avoid being disappointed by exclusions. Here are some factors to consider.
Trip Cancellation and Interruption
Trip cancellation and interruption benefits are the foundation of travel insurance policies. It may reimburse non-refundable travel purchases and increased travel expenses for the portion of the trip rescheduled.
You will want to review the covered reasons, coverage limits and policy terms to purchase a suitable policy. It is important to remember that a delayed or canceled trip does not automatically guarantee that you are eligible for a travel insurance claim.
Reasons covered typically include:
- Flight delays and cancellations
- A hurricane, natural disaster or severe weather
- An insured traveler or a family member becomes ill or injured
- Legal separation or divorce
- Compulsory work or job-related move
- Military deployment, jury duty or required court appearance
- Bankruptcy or financial failure of a carrier
- Terrorist events within 30 days of departure date in destination
A waiting period may apply in certain circumstances to prevent insurance fraud. Two examples are employer layoffs and carrier bankruptcies.
Medical illnesses and injuries may also be further investigated to rule out pre-existing conditions.
The first step is to contact the carrier or host to see if you can receive a refund, delay compensation, and rescheduled travel. After contacting the travel supplier, you can submit a claim for any remaining refund.
Coverage limits for a barebones policy are generally up to $10,000 or the cost of your trip,
whichever is the lowest. Upgrading to premium plans offers more generous limits.
Does travel insurance cover hurricanes?
Travel insurance can cover hurricanes if you purchase coverage before the storm is named.
Travel insurance medical coverage is another compelling reason to purchase a standalone policy. Many new medical and dental incidents during the trip may be eligible.
Pre-existing conditions and injuries resulting from high-risk activities are generally not covered unless you purchase special coverage.
You may also consider purchasing emergency escape coverage.
Emergency medical care and evacuation may be more useful for international travel, as personal medical insurance benefits generally apply only in the United States and territories.
Most travel insurance policies now offer Covid-19 cover which can reimburse your trip if you test positive before you leave. Additionally, this policy option can reimburse medical treatment and quarantine costs while travelling.
You may also see this listed as epidemic coverage and may cover other unnamed medical events that may occur. Researching the latest travel restrictions can help you define your coverage options.
Baggage loss and delay
Baggage insurance can reimburse the value of your lost, damaged or stolen items. This coverage may apply to carry-on baggage and checked baggage.
A policy with delayed baggage benefits can help you pay for necessities like clothes and toiletries while you wait to collect your bags. However, it usually takes 8-12 hours before this benefit kicks in.
Accidental death and dismemberment
You or your dependents may receive compensation for accidental death and dismemberment (ADD).
Optional travel insurance coverage
Several add-ons may also be worth the expense for extended coverage:
- Cancel for any reason: Can usually receive a full refund if canceled at least two days before departure.
- Pre-Existing Medical Conditions: Receive treatment for certain illnesses and injuries. Medical tourism and pregnancy may have exclusions.
- Rental Car Coverage: Reimburses loss due to theft or collision. This benefit is standard with most credit cards, but may provide additional coverage or apply in excluded countries.
- Sports: can reimburse the rental, loss and delay of prepaid equipment. It can also cover medical incidents related to covered activities.
Travel insurance offers the most benefits for expensive trips or when traveling outside of the United States. Trip cancellation and medical coverage benefits are simple for most trips. However, it is essential to read the exclusions carefully if you have a complex situation such as pre-existing conditions or other travel uncertainties.