Travel Insurance: Common Questions Answered

## Do I Really Need Travel Insurance? The short answer: it depends on what you stand to lose. If you've booked a $500 domestic weekend trip, you can probably absorb the loss if something goes wrong. But if you're looking at a $5,000 international vacation, a medical emergency abroad, or non-refundable reservations you can't afford to lose, travel insurance shifts from optional to essential. Consider these scenarios: a family member gets sick the week before your trip and you need to cancel. You break your ankle hiking in Costa Rica and need medical evacuation. Your airline loses your luggage containing medications and gear. Travel insurance covers all of these situations. Without it, you're paying out of pocket — and overseas medical bills can run into tens of thousands of dollars. The U.S. State Department recommends travel insurance for all international trips, and for good reason. Your domestic health insurance typically provides no coverage outside the country, and Medicare provides zero coverage abroad. ## What Does Travel Insurance Cover? Most comprehensive travel insurance policies bundle several types of coverage: - **Trip cancellation**: Reimburses your non-refundable trip costs if you need to cancel for a covered reason (illness, injury, death in the family, severe weather, jury duty, job loss) - **Trip interruption**: Covers the unused portion of your trip and additional transportation costs if you need to cut your trip short - **Travel medical**: Pays for emergency medical treatment while traveling, including hospital stays, doctor visits, and prescriptions - **Medical evacuation**: Covers emergency transportation to the nearest adequate medical facility, or back to your home country — this alone can cost $50,000 to $100,000 or more by air ambulance - **Baggage loss/delay**: Reimburses you for lost, stolen, or damaged luggage and provides money for essentials if your bags are delayed - **Travel delay**: Covers additional hotel nights, meals, and transportation if your trip is significantly delayed Read the policy details carefully. "Covered reasons" for cancellation vary between policies. Some are more generous than others. If you want maximum flexibility, look for a "cancel for any reason" (CFAR) upgrade, which typically reimburses 50-75% of your costs regardless of the reason. ## How Much Does Travel Insurance Cost? Travel insurance typically costs 4% to 12% of your total prepaid, non-refundable trip cost. For a $3,000 trip, expect to pay $120 to $360. Several factors affect the price: - **Trip cost**: Higher trip costs mean higher premiums - **Your age**: Older travelers pay more, primarily because of higher medical risk - **Trip length**: Longer trips cost more to insure - **Destination**: Trips to countries with expensive healthcare cost more - **Coverage level**: Adding CFAR or higher medical limits increases the price For frequent travelers, an annual travel insurance policy can save money. These typically cost $150-$500 per year and cover all trips within the policy period, with per-trip length limits (usually 30-45 days per trip). ## When Should I Buy Travel Insurance? Buy travel insurance as soon as you've made your first non-refundable payment. Here's why: most policies have time-sensitive benefits that are only available if you purchase within 14 to 21 days of your initial trip deposit. These time-sensitive benefits often include: - Pre-existing medical condition coverage (a waiver that covers conditions you already have) - Cancel for any reason (CFAR) upgrades - Financial default coverage (if your travel supplier goes bankrupt) Waiting until the last minute isn't just risky — it can cost you access to the most valuable parts of the policy. And if you wait too long and need to cancel before purchasing coverage, you're out of luck entirely. ## Does My Credit Card Already Cover Travel Insurance? Many premium credit cards offer some travel protection, but it's usually more limited than a standalone travel insurance policy. Common credit card benefits include: - **Trip cancellation/interruption**: Often limited to $5,000-$10,000 per trip, with a narrow list of covered reasons - **Travel delay**: Typically $300-$500 for delays of 6-12 hours - **Lost luggage**: Usually $1,000-$3,000, and may only cover what the airline doesn't reimburse - **Rental car damage**: Many cards cover collision damage on rental cars, which is genuinely useful Critically, most credit cards do **not** cover: - Travel medical expenses - Medical evacuation - Cancel for any reason - Pre-existing conditions Credit card coverage works as a baseline for domestic trips where medical costs aren't a concern. For international travel, or any trip with significant non-refundable costs, a standalone policy provides much more comprehensive protection. You can often use credit card benefits alongside a travel insurance policy — check both for how they coordinate. ## What's the Difference Between Travel Medical and Trip Cancellation? These are two distinct types of coverage that serve different purposes, and understanding the difference helps you buy the right policy: **Trip cancellation insurance** protects your financial investment in the trip itself. It reimburses non-refundable costs — flights, hotels, tours, cruise fares — if you need to cancel or cut your trip short for a covered reason. It's about money you've already spent. **Travel medical insurance** protects your health while traveling. It covers emergency medical treatment, hospital stays, prescriptions, and medical evacuation if you get sick or injured during your trip. It has nothing to do with trip costs — it's about healthcare expenses. You can buy these separately. Some travelers only need medical coverage (for example, if their trip is fully refundable but they're going abroad). Others only need cancellation coverage (for example, a domestic trip with expensive non-refundable bookings). Comprehensive policies bundle both. For international trips, travel medical coverage is arguably more important. A hospital stay in many countries can cost $1,000 or more per day without insurance, and a medical evacuation from a remote area can exceed $100,000. Your domestic health plan almost certainly won't cover any of it.