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If we’ve learned anything about travel in recent years, it's that things can change quickly, and travelers need to expect the unexpected. From a global pandemic to catastrophic weather events to airline snags, travel issues are everywhere.
That’s not stopping people from making travel plans, though. One traveler survey revealed that 40% of Americans plan to travel more in 2024 than in 2023, and nearly half expect to spend at least $4,000 on their trips. This is a significant expense for many people and one that needs protection.
Like any other kind of insurance, travel coverage minimizes financial risks. In fact, according to the US Travel Insurance Association, peace of mind and protection from the unexpected are the other top reasons for purchasing travel insurance.
Although many people travel without incident or only experience minor inconveniences, travel insurance ensures that there aren’t any devastating monetary consequences when something significant happens.
Travel insurance policies cover the biggest financial risks associated with travel, including:
How much risk you face depends on your financial commitment to travel and the trip details. In other words, a weekend getaway to a domestic destination is less likely to result in significant financial losses if something goes wrong than a three-week adventure around Europe. Factors like your health, the value of your luggage, and whether you have other insurance that could cover expenses also influence your level of risk and the need to invest in extra protection.
When you book your airplane fare, reserve a hotel room, or schedule activities and excursions, you may have the option to purchase travel protection for a few dollars more. Travel protection ensures you don’t lose money if the travel provider cancels or delays your trip. In most cases, this translates to credits for a future trip and waiving fees for changes to your plans.
It’s essential to recognize that travel protection isn’t travel insurance, as it only covers that particular purchase. If you purchase travel protection for a flight but not a hotel room, and the airline cancels the flight, you can get a credit for a future ticket, but you won’t receive reimbursement for the hotel charges.
Travel insurance is a more comprehensive offering. When you purchase a travel insurance policy, it covers your entire trip and reimburses you for all the covered expenses.
When you want to protect your travel plans, you have a menu of coverage options. The five primary types of coverage are:
You can also include a variety of add-on supplements to cover specific situations, like identity theft or evacuations for political unrest. Most insurance companies offer comprehensive policies that include most or all primary coverages, so you don’t need to purchase separate policies.
The last thing anyone wants to do is cancel a planned trip or cut their travels short due to an unforeseen emergency. When this happens, the costs of nonrefundable prepaid purchases and fees can add up quickly.
Trip cancellation or interruption coverage will reimburse you for these prepaid expenses if you meet the conditions of the policy. It will cover you if:
Keep in mind that trip cancellation and interruption coverage only applies to specific reasons. If you want more flexibility, you need to get cancel for any reason (CFAR) insurance. As the name implies, this insurance allows you to cancel your trip for any reason whatsoever and get reimbursed a portion of your non-refundable expenses.
If you’re unsure about your travel plans or just want extra peace of mind that you won’t be out thousands of dollars if you change your mind, include CFAR coverage in your vacation budgeting.
Comprehensive policies typically cover lost, delayed, or stolen baggage, reimbursing you for items you had to purchase due to unavailability of your baggage.
Medical insurance ensures you can access medical care while you travel. While your health insurance policy will likely cover you in the U.S., you may not be able to use your benefits outside the country. Considering that a medical emergency can result in high bills, this coverage can make a huge difference if you need medical services during your trip.
This coverage will get you to a place where you can receive medical care in an emergency. Sometimes, this is home, but it’s more likely that the benefit will get you to the nearest hospital.
Some companies won’t provide evacuation if you sustain an injury doing something they deem dangerous, like scuba diving or skiing. If you plan to participate in any of these activities, you may need supplemental coverage for adventure sports.
How much you’ll pay for travel insurance depends on the cost of your trip. Typically, companies charge between 4% and 10% of the total trip cost. If you choose CFAR coverage, expect your premiums to increase, in some cases even to double.
Other factors that influence the cost of travel insurance include your destination, when you purchase the policy, and your age. It’s best to buy the policy as soon as possible when you book the trip to get the best rate.
Some insurance companies also offer annual travel insurance policies that cover all your trips with one policy. If you travel frequently, this could be an easier and more affordable option for maximizing travel protection without hassles.
If you’re planning a family vacation, a honeymoon, or any other type of trip, protect your travel plan with an affordable travel policy. Find and compare policies by submitting a request for a quote. Contact us today.