Although the price of airline tickets fell slightly last month, it still fell by 1.8% in Junesince a year ago. Given the rise in air ticket prices, increased flight delays due to labor shortages and a floating around, should you buy travel insurance to protect the value of your trip?
Since many of the factors that cause travel disruptions are out of your control, travel insurance should be considered. A travel insurance policy can provide protection against unforeseen circumstances that affect your travel plans, while also offering peace of mind during uncertain times.
Travel insurance, a regulated product written by an insurance company that provides financial and medical coverage and reimbursement, is not the same as trip protection or credit card travel insurance. Travel protection is less comprehensive and less expensive — and it generally only offers to waive the fee or give you a credit to cancel your trip.
If you havewe’ll tell you what travel insurance actually covers, how it differs from travel, and how much it costs, so you can decide whether it’s worth adding to your summer trip.
What is travel insurance?
Travel insurance is the main type of insurance policy overseen by state insurance regulators. By purchasing a travel insurance plan, you can get compensation for any losses you may incur while traveling. Covered events can range from unexpected inconveniences like delayed baggage to major disruptions like illness or injury.
As always, check with official sources regarding visa and travel requirements for your specific destination, as you don’t want to be caught off guard. For example, if you want to travel to Cuba, you may be surprised to find that you need non-US health insurance, according to the State Department. Travel insurance will cover this requirement.
What does travel insurance actually cover?
A typical travel insurance policy consists of two elements: trip cancellation services and medical expenses.
If you are unable to travel due to an unforeseen event, travel insurance will reimburse you for non-refundable upfront costs, such as flights and hotel reservations that would otherwise be non-refundable. Unforeseen events usually include things beyond your control that prevent travel, such as inclement weather, injury or illness — now in most (but not all) cases, including illnesses related to COVID.
This was not an offer when the 2020 COVID-19 shutdown began.[The public] It was frustrating because most insurance policies had pandemic exclusions,” said Michael Giusti, an analyst at Insurance Quotes. “But the travel industry turned to the consumer and included COVID in policies. So if you get sick with COVID and can’t travel, they’ll cover your expenses.”
Unforeseen events caused by pre-existing conditions are even covered. For example, if you have asthma and experience an attack, that’s still considered an unexpected event, according to Giusti. Expected events such as travel during your eight months of pregnancy are not covered.
Government mandates that may come into effect while traveling are also not necessarily covered, Giusti said. This means that if you are unable to take a flight due to the new mandate, your policy may not cover you. Fear of travel isn’t covered either — so if you’re afraid to travel because of the worry of contracting COVID, your travel insurance won’t cover your trip.
The second part of typical travel insurance covers health expenses if you are out of your home insurance network while traveling. This often includes doctor visits for minor ailments, such as stomach problems, as well as emergency services, including medical evacuation. Your travel insurance company will pick up the tab for anything your health insurer won’t cover (depending on your plan and deductibles). Read the fine print to make sure this is included in your plan.
What about trip protection? How is it different?
While travel insurance can offer financial coverage for rental damages, lost luggage, flight delays, medical bills and ticket cancellations, travel protection usually only allows you to change, cancel or refund a travel purchase (such as a flight or hotel). You’ll often find airlines offer a travel protection option when you buy airline tickets online, which can help you get a refund or offer you a travel credit if you have to cancel your flight.
Travel protection, also called travel protection, is not offered by hotels but can be purchased when booking a cruise. According to Benét J. Wilson, editor-in-chief of The Points Guy, basing the bill on cruise line travel protection is generally not recommended because once you get into the fine print, coverage is pretty limited.
Premium credit cards may also provide some travel expenses as cardmember rewards. This coverage is usually labeled as travel insurance, but it offers a fraction of what you would normally get when you buy it through an insurance agency. What’s covered depends on the card, but typically, according to Wilson, you’re looking at coverage for emergency evacuation, death, vision loss or dismemberment.
To make sure you’re buying the right travel insurance policy, don’t just search for the word “insurance” — make sure you’re looking for a reputable travel insurance brand that works with a travel insurance underwriter like Allianz Travel Insurance. . Additionally, you can make sure that the company you are buying from is listed with AM Best and the US Travel Insurance Association before you buy.
How much is travel insurance?
The amount you pay for travel insurance depends on several factors:
- Your age
- The cost of your trip
- Travel destination
- Travel time
- Your coverage options (flights and hotels, pre-paid excursions, etc.)
According to Giusti, a good rule of thumb when budgeting for travel insurance is 5-10% of the total cost of the trip.
What is cancellation insurance for any reason?
Cancellation insurance for any reason, or CFAR, does exactly what its name promises: It allows you to cancel for any reason and receive compensation beyond the limits of typical travel insurance. However, not only are these policies more expensive, they usually don’t cover 100% of your costs in case of cancellation. And you should buy this insurance immediately after booking your trip.
“As soon as you put down your savings for your trip, the clock starts ticking,” Giusti said. “So you’re going to have to buy that insurance policy for a certain period of time. They don’t want you to buy the policy six months later when you’re about to travel and hear about the new COVID variant.”
“CFAR can refund up to 75% of a traveler’s travel expenses if they cancel for a reason not covered in their policy,” said Megan Moncrief, chief marketing officer of SquareMouth.com, a travel insurance quote and comparison engine. “It costs an additional 40-50% premium and is only valid within 21 days of the first booking towards travel.”
Do all travel insurance companies cover claims related to COVID?
While most travel insurance carriers generally cover cancellations related to COVID, not all do. Plus, while most plans provide coverage for COVID, they’ll only cover you if you’re sick, not if you’re afraid to travel because of the outbreak.
Coverage varies by policy and can range from $50,000 to $1 million per traveler, according to Moncrief. SquareMouth.com suggests looking for a policy with at least $50,000 in medical insurance and $100,000 in medical evacuation coverage.
You may want to consider policies with higher medical benefits, especially if you’re worried about contracting COVID or if you’re at high risk and concerned about hospitalization costs. Some companies offer $500,000 per person COVID health insurance plans and cover 100% of travel expenses for cancellation of a COVID-related illness. These companies include:
If you have any questions about your coverage, it’s important to talk to your insurance provider and read the fine print.
Does travel insurance cover quarantine costs?
This is where it gets tricky. Let’s say you’re on a trip to London and you contracted COVID right before your flight and now you have to quarantine until you test negative. While you’re away from home, you’ll suddenly need extra money for lodging, food, and potentially medical care.
Will travel insurance cover these costs? It depends. “It’s going to be politics with politics,” Giusti said. Some plans may have additional coverage for hotel stays and airfare if you need to quarantine. He said that the wood can cover only a part of the quarantine, not the whole. You may want to check your plan’s Travel Delay or Trip Interruption benefits to see if quarantine breaks are included.
“Most policies are extended seven days after the scheduled return date, although some policies may extend longer,” Moncrief said. A travel delay benefit can range from several hundred to several thousand dollars in coverage. The highest result pays a maximum of $2,000 per traveler, which breaks down from about $150 to $250 per day.
If quarantine is included in your Trip Interruption Benefit, your plan may also provide reimbursement for missed prepaid portions of your trip, including excursions.
We contacted travel insurance carriers to see their offers, but did not immediately hear back. We will update this article as we get new information.
Should you buy travel insurance?
It depends. If you’ve put down a deposit for your trip, especially for all-expenses-paid trips like cruises, it may be worth buying travel insurance. If something happens, you risk losing all the money you have invested, and travel insurance will eliminate that risk.
On the other hand, if you’re just flying to visit family and not paying for accommodation, it may not make sense to buy travel insurance, especially if the airline offers a direct cancellation policy. But if you’re worried about canceling your trip due to COVID, opting for travel insurance with broad coverage can provide peace of mind.
Check out CNET’s recommendations for more informationtips for and how to make travel more affordable despite the rising cost of flights.