Travel insurance can reimburse you for certain financial losses incurred while traveling, usually as a result of unforeseen circumstances such as a flight delay or emergency medical treatment. However, not everything is covered, so it’s essential to know the ins and outs of your travel insurance policy before you head out on your trip.
More information: Travel insurance: what it covers, costs and how to choose the right policy
In its most basic sense, travel insurance will pay you money if something goes wrong with your travel plans. This doesn’t mean you’ll get paid for any small mishap, as it depends on your policy and whether the mishap is covered, but you may be covered in situations that would otherwise cost you thousands of dollars.
For example, if you are on vacation in another country and have to visit the local emergency room after tripping and breaking your wrist, your policy may cover hospital costs.
If this is a covered reason under your policy, you will need to submit a claim to your insurance provider, including any required documentation, such as hospital bills.
More information: The best credit cards for travel
Specific travel insurance coverage varies by policy, depending on the provider and plan you choose. Terms and conditions may also vary by policy, but below are some common types of travel insurance coverage (note that names may vary by provider):
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Car Rental Coverage: Provides reimbursement for rental vehicle theft and collision damage.
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Luggage insurance: Provides reimbursement for lost, delayed, damaged or stolen luggage. You may also be entitled to a refund from an airline or other responsible party, depending on the situation.
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Transportation and emergency evacuation coverage: Covers necessary emergency medical evacuation and transportation during the trip.
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Emergency medical and dental coverage: Covers eligible expenses if you become sick or accidentally injured while traveling.
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Travel accident insurance: Pays a set amount for covered travel accidents, which typically involve a covered loss, such as loss of sight or hearing, or the loss of an appendix.
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Travel delay coverage: Reimburses you for reasonable expenses resulting from a delay in covered travel, such as a flight delay.
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Trip cancellation insurance: Reimburses you for non-refundable, prepaid expenses if you have to cancel your trip for a covered reason. This coverage is generally applied before leaving on a trip.
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Trip interruption insurance: Reimburses you for non-refundable, prepaid expenses in case you have to interrupt your trip for a covered reason. This coverage generally applies while you are traveling.
You get sick before your trip and cannot travel
If you have an illness that prevents you from traveling, you should be able to get reimbursed from your travel insurance policy for non-refundable, prepaid bookings you have already made.
Applicable coverage:
Things to keep in mind:
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You may need to consult with a doctor and present your recommendation not to travel as part of the claims process.
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Trip cancellation coverage generally only applies if you haven’t started your trip yet.
If you decide to cancel your trip because you feel a particular destination is unsafe, your travel insurance may not cover it, although it depends on your policy.
Applicable coverage:
Things to keep in mind:
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Many travel insurance policies will not reimburse you for non-refundable expenses if you decide not to travel due to personal feelings or general safety concerns.
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You may be eligible for a refund if there is a covered security-related reason, such as a government-ordered evacuation of your travel destination or a terrorist event occurring nearby.
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CFAR insurance can reimburse you for a percentage of your non-refundable expenses for essentially any reason you decide to cancel your trip.
If your phone or other personal and electronic device is stolen while traveling, you may be covered by travel insurance or one of your credit card benefits. Typically, you must provide documentation, such as a police report, to your supplier during the claims process to receive reimbursement for stolen items.
Applicable coverage:
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Luggage, personal items or device insurance
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Credit card purchase protection
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Cell phone protection with credit card
Things to keep in mind:
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It depends on your policy, but many travel insurance providers offer coverage for luggage and personal belongings, or something with a similar name.
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If you have protection for your cell phone through a travel credit card, you will typically have to pay your cell phone bill with that card to receive the protection benefit.
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Credit card purchase protection only covers new purchases, so it wouldn’t apply if you’ve had your phone for a while.
More information: How credit card travel insurance works
You get injured while traveling and have to visit a hospital.
You are generally covered if you need emergency medical or dental treatment for a covered injury or illness while traveling.
Applicable coverage:
Things to keep in mind:
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Emergency medical and dental insurance typically covers sudden, unexpected illnesses, as well as injuries or medical conditions that need immediate treatment.
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You may not be covered if the illness or medical condition is the result of a pre-existing condition.
Flight delays and cancellations are one of the risks most commonly associated with travel and probably one of the reasons why many people purchase travel insurance. Depending on the situation, your policy may cover it.
Applicable coverage:
Things to keep in mind:
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This coverage generally applies only to covered reasons, such as your airline or a natural disaster causing the delay. You may also be covered if your travel documents are lost or stolen.
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A minimal delay is often required before your coverage takes effect. For example, six hours or more is usually a safe bet, but it depends on your policy.
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Depending on your policy, you may have a daily limit on the amount you can receive in reimbursement.
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Pre-existing medical conditions: In many cases, expenses resulting from pre-existing medical conditions are excluded.
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Known or foreseeable events: A foreseeable event could include a hurricane heading toward your vacation destination. If you still decide to travel and your trip is affected in any way by the hurricane, you probably will not be covered because it was a foreseeable outcome.
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Changing your mind: Unless you have CFAR insurance or a covered event occurs, you cannot use trip cancellation or interruption insurance to cancel or end your trip.
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Being afraid of traveling: Similar to changing your mind, you can’t cancel or end a trip and expect a refund if you have safety concerns, unless those concerns coincide with a covered reason.
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High risk activities and adventure sports: Many policies exclude high-risk sports and activities from their overall coverage, but it is possible to add this coverage as a rider or supplemental policy.
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Epidemics and pandemics: Unless your policy specifically states that it covers epidemics and pandemics, these known events are likely excluded.
It depends on your policy, but travel insurance generally doesn’t cover pre-existing medical conditions, high-risk activities and adventure sports, or simply changing your mind. However, you may be able to include add-ons for these specific situations or purchase a policy that allows you to cancel for any reason.
Travel insurance pays for covered events with properly submitted claims. This could include canceling your trip for medical reasons, receiving a refund for lost or damaged luggage, and obtaining a refund for emergency medical care in another country.
What is the difference between basic travel insurance and comprehensive insurance?
Comprehensive travel insurance typically offers more types of coverage and higher coverage limits. For example, a basic policy may include $200,000 of emergency evacuation and repatriation coverage, while a more comprehensive plan may include up to $1 million in the same coverage.
The biggest disadvantage is that it is an additional cost to standard travel expenses, such as flights and hotel stays. Depending on the policy, travel insurance could cost between 4% and 10% of the total price of your trip. For a trip that costs $10,000, that means paying between $400 and $1,000 for travel insurance.
Additionally, many insurance policies have a lot of fine print that you need to be aware of. If you do not understand the terms and conditions or the claims process, you may be unsuccessful in your attempt to receive a refund, even if it is for a covered reason.
Tim Manni edited this article..