The complete guide to travel insurance

Quick insights

• Travel insurance can provide financial protection from unforeseen circumstances associated with traveling.
• There are many kinds of travel insurance that cover common hiccups and disruptions like cancelled flights, lost baggage and medical emergencies.
• Some credit cards provide travel insurance but it's also available through insurance companies. Rates and coverage will vary.

There’s nothing quite like the excitement leading up to a trip. Whether it’s a weekend getaway with your best pals or a two-week international adventure with your partner, the anticipation is one of the best parts of booking a vacation. But that excitement can quickly turn to worry if you get sick or have an unexpected storm barreling down on your destination. It’s for this reason that many people turn to travel insurance. In this article, we’ll explain the purpose of travel insurance, how it works, and the different types of insurance available to most travelers.

Travel insurance explained

Travel insurance can provide financial protection for risks and losses associated with domestic or international travel. In other words, travel insurance is meant to protect you should some worst-case scenarios occur before or during your trip.

Depending on the coverage, you can be reimbursed for financial losses if your trip is cancelled, delayed or interrupted for several reasons. Travel insurance can also provide easy access to help with some insurance including emergency assistance services like interpreters and help replacing lost or stolen passports. Lastly, it can even provide medical coverage for serious injury, illness or even death while traveling.

How does travel insurance work?

Travel insurance may kick in if something happens to disrupt your trip. In the case of a qualifying event covered by your travel insurance, you submit a claim for costs associated with the disruption. Qualifying events vary based on the insurance provider, but common types of travel insurance cover costs associated with travel delays or cancellations, lost, delayed or damaged baggage, car rentals and medical issues.

Types of travel insurance

Many unforeseen events can happen while traveling. That’s why there are several types of insurance coverage that mitigate your risk for everything from severe weather to car accidents. There are several types of travel insurance, including:

• Trip delay, interruption or cancellation
• Baggage delay, loss or damage
• Medical insurance
• Travel accident insurance
• Rental car insurance
• Emergency and travel assistance services

With so many types to consider, let’s look at some common travel insurance options a little more in-depth.

Trip cancellation or interruption coverage

Your trip may get cancelled or need to be cut short. Unfortunately, it happens.

Trip interruption insurance can cover you for expenses incurred when your trip ends unexpectedly. It provides reimbursement for prepaid, unused and non-refundable travel expenses, such as plane tickets, hotel stays or cruise line reservations. With interruption insurance, only the part of your trip that was interrupted will be eligible for reimbursement in most cases.

Trip cancellation coverage applies to trips that never happen. This insurance may reimburse you if you’re forced to cancel a trip for a covered reason, like severe weather or serious illness or injury. Even jury duty is a covered reason on some policies.

Baggage loss coverage

Showing up at your destination is usually a highlight of any trip. However, your excitement can quickly fade should your bags not make it with you. Baggage loss is a common form of travel insurance and provides reimbursement if your if your bags are delayed, damaged or lost.

If your bags are delayed, you may be covered up to a certain amount for any clothes, toiletries, or other necessities you purchased while waiting for your luggage to arrive. If your bags are damaged or lost during your trip, you may be entitled to reimbursement to replace your lost or damaged items. For example, the Chase Sapphire^® card provides up to $3,000 per passenger for you or any immediate family member whose checked or carry-on luggage is damaged or lost by the carrier.

Travel accident insurance

Accidents happen, even while traveling, which is why you can purchase travel accident insurance. This insurance typically covers a wide range of physical injury and dismemberment – even death - while traveling. This type of coverage is most practical for those who travel frequently or visit areas of the world prone to conflict.

Travel accident insurance will cover medical costs associated with any injuries you sustain while traveling, with some exceptions. For example, participation in extreme sports while traveling will likely not be covered should you get injured.

Primary and secondary coverage

You can be covered by more than one insurance policy at a time. One policy will act as primary coverage while the second will only be used when the primary coverage benefits are exhausted.

Primary insurance is determined by the situation. For example, you may be covered by medical insurance through your employer, but if you’re traveling internationally, it’s common that your travel insurance would be your primary coverage in the event of a medical emergency. If you’re traveling domestically, your employer provided healthcare would likely be primary.

Comprehensive travel insurance

Comprehensive travel insurance is the most common and wide-ranging travel insurance. When people think of travel insurance, they often think of comprehensive coverage.

Typically, comprehensive coverage includes trip cancellation coverage, baggage loss or damage, medical coverage, and emergency assistance while traveling. It doesn't cover everything though, so some people opt for these comprehensive coverage add-ons:

• Cancel for any reason: allows you to cancel all or part of your trip for any reason, meaning you don’t need to worry about meeting coverage requirements or having a qualifying event. You can receive a partial refund of what you paid without providing a reason.
• Pre-existing condition waiver: this provides coverage for medical issues while traveling even if you have a pre-existing condition. Without this add-on the insurance provider may look at your medical history to determine whether you’re filing a claim related to travel incident or an ongoing medical condition.

Some travel insurance may already include a pre-existing condition waiver, so as with any policy, read the terms and conditions carefully to know your coverage and determine if you need more.

How to get travel insurance

You can purchase a travel insurance policy from an insurance company, or you may find your credit card has travel insurance. For example, the Chase Sapphire cards provide travel insurance that includes emergency assistance services, trip delay reimbursement, lost luggage reimbursement, travel accident insurance, and more. Keep in mind there may be an annual fee associated with these kinds of travel credit cards, including Chase Sapphire.

If you don’t have a credit card with travel insurance or find that coverage provided isn’t what you want, contact an insurance carrier and learn about their policies and rates. When applying, you likely will be required to answer a few questions, like:

• Where you are going
• The cost of trip
• Your age
• Where you live

Policies are customizable depending on your needs. You can get insurance for a single trip or a full year. The rates you are quoted and what is covered will vary based on the coverage and carrier you choose. You’ll find that the insurance rates are often influenced by the price of the trip and age of the traveler.

In summary

Don’t let worry over the unexpected ruin your next trip. If you’re about to embark on or book a vacation, check your credit cards terms and conditions to see if travel insurance is a cardmember benefit. And if you don’t have it, you can purchase a policy with an insurance provider.

With travel insurance, you can seek reimbursement for cancelled flights, lost baggage, medical issues and many other travel disruptions. You may find peace of mind knowing that you’re covered should something unforeseeable happen.