What travel insurance covers

Travel insurance is a package of short-term coverages for a specific trip, or for all trips in a year with an annual plan. Typical components are:

  • Trip cancellation reimburses prepaid, non-refundable costs if you cancel for a covered reason listed in the policy, such as illness, injury or death of you or a family member, severe weather or a tour operator going out of business.
  • Trip interruption pays for the unused part of the trip and extra travel home if a covered event cuts it short.
  • Travel medical pays for emergency treatment while you are away.
  • Medical evacuation pays to transport you to an adequate hospital or home, which can be very expensive from remote areas or cruise ships.
  • Baggage and travel delay reimburse lost or delayed luggage and extra meals and lodging during covered delays.

Why your health coverage may not be enough

Many US health plans offer limited or no coverage abroad. Medicare.gov states that Medicare usually does not cover health care while you travel outside the US, with narrow exceptions. Most Medigap plans include foreign travel emergency care that pays 80 percent of billed charges after a $250 yearly deductible, up to a $50,000 lifetime limit. Check your own plan before you go; evacuation is rarely covered by ordinary health insurance.

Cancel for any reason and other options

Standard policies pay only for the reasons they list. Cancel for any reason (CFAR) is an optional upgrade that, according to the Insurance Information Institute (Triple-I), usually reimburses 50 to 75 percent of prepaid costs no matter why you cancel, for a higher premium. CFAR usually must be bought shortly after your first trip payment, and you must cancel a set time before departure. Cruise line and tour operator cancellation waivers are not insurance and are not regulated by state insurance departments.

Common exclusions

Read the exclusions carefully. Policies often exclude pre-existing medical conditions unless a waiver applies, which may require buying the plan soon after your first deposit. Many exclude losses from known events: Triple-I notes that weather coverage applies only if you buy before a storm is forecast. Other common exclusions are high-risk sports, travel against government advisories, intoxication, elective treatment and fear of travel without a covered reason.

What drives the price

Trip cost premiums are usually based on the insured trip cost, traveler ages, trip length, destination and the benefits chosen. Medical-only plans are priced mainly on age, duration and the medical limit. CFAR, rental car damage and adventure sports add cost. Annual multi-trip plans can be economical for frequent travelers, but they usually cap the length of each trip and the amount of cancellation coverage.

How to choose a plan

Insure the full non-refundable cost, choose medical and evacuation limits that fit your destination, and confirm whether the plan pays providers directly or reimburses you later. Check the 24-hour assistance service, which arranges care and evacuation. Protections that come with a credit card can help, but their limits and covered reasons are usually narrower than a standalone plan. If you need a visa, check its insurance rules: under the EU Visa Code, travelers who need a Schengen visa must show travel medical insurance of at least 30,000 euros. Estimate costs with our travel insurance calculator.

How claims work and regulation

Call the assistance line before major treatment or evacuation whenever possible. Keep receipts, medical records, carrier delay notices, police reports and proof of non-refundable costs, and file promptly. Travel insurance is regulated by the states; a majority have adopted a version of the NCOIL/NAIC Travel Insurance Model Act, which sets licensing and disclosure standards.

Polis Re helps you compare travel insurance plans for single trips and annual coverage and request quotes in one place. Policies are issued by licensed insurers and placed through licensed producers in your state.