In many cases, vacations can involve thousands of dollars and months of advanced planning, organizing, and saving. So if you’re wondering if you need travel insurance, the answer is often yes. Like any other investment of this magnitude, it’s important to make sure you have adequate insurance to protect yourself should the tour operation or cruise line you’ve booked with go bankrupt, you or a family member becomes ill, or some other unforeseen event upsets your vacation plans. See Vacation Insurance.
Travel insurance can be purchased as a packaged plan with several different options, including travel delay, trip cancellation, baggage, accidental death, auto, 24 hour traveler assistance, dental, emergency medical, emergency medical evacuation, and so forth. The five main types of travel insurance—trip cancellation, baggage, emergency medical, auto, and accidental death—can each also usually be purchased as an individual policy. For an overview of plan types and how they are sold, see Travel Insurance Overview.
Types of travel insurance
-
Trip Cancellation.
This insurance policy protects you should certain factors prevent you from taking the trip. Look to the specific policy to determine what factors will be covered, but most will include circumstances like a tour operator or cruise line going out of business, personal or family illnesses, and the death of a family member.
The policy may also reimburse you for any unused portion of your vacation should you become seriously ill or injured once on the trip. The cost of trip cancellation insurance is usually equivalent to between five and seven percent of what the vacation costs, meaning a policy for a $2,500 trip would be roughly in that percentage range.
Keep in mind that trip cancellation insurance isn’t the same as the cancellation waiver your tour operator or cruise line may offer. While a waiver is relatively less expensive, it often has restrictions and must be purchased when you book your vacation. A cancellation waiver isn’t regulated like insurance and may not protect you if the business goes bankrupt or closes.
-
Emergency Medical Assistance.
Ask your health insurance carrier what type and degree of coverage you’ll have on a trip to a foreign country. If your health insurance policy doesn’t cover you at all or leaves you under‑insured while visiting a foreign country, then you might consider an emergency medical assistance policy to cover any emergency help you might need during your vacation following an injury or illness.
This coverage can include medical transportation to a hospital capable of treating your illness or injury, foreign hospital stays, and, if you are seriously ill or injured, transportation home.
-
Baggage Insurance/Personal Effects Coverage.
This policy covers you should your personal belongings get damaged, stolen, or lost during the vacation. It’s often relatively inexpensive for basic limits, but whether you need it depends on coverage provided by your trip operator, airline, or homeowner’s/renter’s insurance.
Check whether your homeowner’s or renter’s policy covers off‑premise thefts before you buy separate coverage. For high‑value items you may prefer an endorsement or floater on your existing policy. Also contact your credit card company to determine what travel‑related coverage or services they provide.
-
Auto Coverage.
A typical personal auto insurance policy generally covers vehicles within U.S. states, territories, and Canada only. Check with your auto insurer to determine how coverage applies to your destination and whether you will need additional protection for a rental or for travel outside your policy area.
If your trip includes carrying your personal or rented vehicle outside the areas specified in your policy, you’ll need to purchase coverage applicable to your destination through an insurance agent, car rental agency, or travel agency. If renting, obtain both liability and physical damage coverage as appropriate.
-
Accidental Death.
An accidental death policy provides a benefit should the insured party die on the vacation. It often isn’t necessary if you already have suitable life insurance, but it is available as an add‑on or standalone policy for travelers who want that specific protection.
Frequently Asked Questions
Do I always need travel insurance?
Not always, but it is recommended for many trips, especially those that are costly, involve nonrefundable bookings, or travel to destinations with limited medical services.
Will my regular health insurance cover me abroad?
Some plans offer limited or no coverage outside your home country, so check with your carrier before traveling and consider supplemental emergency medical coverage if needed.
Does travel insurance cover trip interruptions once I’m on my trip?
Many trip cancellation plans include coverage for interruption and can reimburse unused portions of the trip if you must return home for covered reasons; check policy terms for specifics.
Is lost baggage covered automatically?
Airlines and some travel packages may provide limited baggage coverage, but a separate baggage policy or endorsement can offer broader protection for theft, loss, or damage.
What should I ask an insurance representative before buying?
Ask about covered reasons for cancellation, medical limits and exclusions, evacuation coverage, claim procedures, and any preexisting condition clauses.