Insurance companies like to imply their trip coverage keeps you safe and secure as you travel, especially when visiting countries where political instability or a natural disaster could derail your plans.
In reality, many travelers should buy insurance to protect their investment in the trip or to reimburse them for unexpected expenses.
But not everyone needs trip coverage. Existing insurance policies such as your health, auto, or homeowners coverage may be enough for many domestic travelers. Or, your trip may not cost enough to require trip-specific coverage.
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Is Travel Insurance Worth It?
Any time you buy travel insurance, you should do your own research and explore several companies rather than opting into coverage your travel agent offers.
This due diligence protects you from buying inadequate coverage or from buying coverage you didn’t need to begin with.
In fact, that’s the first question to ask when you’re considering travel coverage: Do you need it?
Good Reasons to Buy Travel Insurance
Consider travel insurance if you’re worried about:
- Canceling an Expensive Trip: When you’re investing several thousand dollars in airfare, travel insurance could help you reclaim some or all of your money if you had to cancel at the last minute. Many airlines and some credit cards offer this coverage, too.
- Encountering Political Instability: In some parts of the world, including some beautiful and historic places, the political landscape can lead to demonstrations and even riots without much warning. Travel coverage could help pay you back if you have to leave early.
- Facing Natural Disasters: Earthquakes, tsunamis, hurricanes — some of the world’s most beautiful locales include the risk natural disasters that could force you to change your plans. Travel insurance could help reimburse you.
- Theft or Other Crime: Some destinations have earned a reputation for pickpocketing and other forms of theft. You can take sensible precautions such as not carrying much cash at a time, but if someone stole essential valuables, travel insurance could help you recover.
- Medical Treatment: Your U.S.-based medical insurance probably won’t be able to help you pay for an unexpected hospital stay in another country. Some nations, especially in northern Europe, have public health care options, even for visitors. In other destinations, though, you may face expensive bills to get medical care.
- The Unpredictable World: A good travel insurance plan can offer a contact person who can make other arrangements if you need help for any reason.
When You Don’t Need Travel Coverage
Usually, someone traveling less than a couple hundred miles from home won’t need trip-specific travel insurance coverage.
You also may not need travel insurance if:
- Other Policies Can Help: If traveling domestically, your health insurance may pay for unexpected doctor’s visits while you’re on the move. Your auto coverage could pay for a rental car if needed unexpectedly, and your homeowners coverage can even reimburse you for stolen or lost items. These coverages could make travel coverage unnecessary.
- You Expect Fewer Risks: Fortunately, travelers in the U.S. tend to face fewer risks from political instability, though it’s not impossible.
- The Trip Cost Less: A domestic adventure typically represents a smaller investment which makes some travelers worry less about losing money invested in trip planning.
This isn’t to say you shouldn’t consider travel coverage for a domestic trip. You should make your own decisions about coverage. A coast-to-coast trip, for example, can cost thousands of dollars, and even the simplest plans can go awry, making trip coverage a sensible precaution.
And, if you have Health Management Organization (HMO) health insurance, your plan may not pay on an out-of-network health claim originating across the country. You may want a travel policy to supplement your medical policy.
Likewise, you may not be confident in your auto coverage’s rental coverage, especially if it has time limits which are shorter than your planned trip.
Ultimately, you have to look at your life, your trip, and your existing insurance to determine whether you need travel insurance to protect your financial outlay.
Comparing Travel Insurance Policies
When you need travel insurance, be sure you compare policies from several travel insurance companies. Compare the costs, of course, but also compare the services each company provides. Compare the reimbursement caps on expenses you concur, and compare customer and industry reviews.
Compare Costs for Travel Coverage
A typical travel insurance policy should cost between 5 percent and 8 percent of the trip’s cost. For a $10,000 trip, that would equal $500 to $800 in premiums.
A policy may cost a little more or possibly even a bit less. Regardless of the quoted price, be sure your premiums will pay for service you can depend on and coverage you know how to use if needed.
Compare Available Coverage Options
Not all policies include all kinds of coverages. For example, you can buy travel insurance that doesn’t address health care costs or provide an emergency contact while you’re traveling.
Usually, though, you’ll have the following coverages available. Sometimes you can buy just the coverages you need:
- Trip Cancelation: If you can’t reschedule your trip (and you haven’t bought trip cancelation insurance from the airline or train service), travel insurance can help recover the money you spent on tickets. Expect to explain why you had no choice but to cancel the trip and be sure your policy covers the reason you’re most likely to cancel a trip, whether it’s illness, work, or some other issue. Travel insurance for this purpose can be an efficient option if you’re using several modes of transportation on your trip.
- Medical Coverage: Many health insurance policies, including Medicare, won’t pay for services at an international hospital or if you have to spend an entire cruise in sickbay. Travel insurance can help reimburse you for these costs.
- Evacuation Insurance: Unforeseen events such as natural disasters and, unfortunately, acts of terror can force you to evacuate. Evacuation coverage in a travel policy can help relocate or pay you back for your unexpected extra expenses.
- Baggage Insurance: Lost luggage can slow your trip or cause you to spend hundreds of dollars replacing lost clothes, supplies, and medicine. Travel insurance can help you recover these costs.
- Theft Insurance: Your travel policy can also help you replace items stolen from your hotel room or even from your pockets as you visit sites around the world.
Compare Extra Features
Many travel policies also offer an additional service: A phone number you can call for help making adjustments mid-trip.
This kind of service can help you cut through language barriers if you’re forced to make new plans for travel or accommodations while you’re already on the move.
If your company doesn’t offer around-the-clock coverage for its helpline, make sure the hours of availability make sense for the time zone of your destination.
Compare Reviews and Ratings
You can also learn a lot about a company by its past performances. Online reviews and ratings offer a place to start.
Remember, as always, that online reviewers tend to be skewed toward the negative because happy customers often feel less motivated to write reviews.
But if you detect consistent trends in reviews showing non-payment on claims or poor customer service, pay attention.
As with any insurance, check out the independent rating agencies such as A.M. Best and Moody’s which grade insurance companies. Companies with the best grades (As instead of Bs, Cs, or worse) should be the most financially secure companies.
We considered these and other criteria when suggesting travel insurance companies.
Best Travel Insurance Companies
Your trip insurance should match your trip and cover the risks you’re most concerned about. The following travel insurance companies can usually offer what most travelers need. I also threw in a couple niche products:
Generali Global Assistance
I’ll start with Generali because this company, for more than half a century, has offered some of the most comprehensive plans for world travelers with higher-than-average payout caps.
For example, Generali will cover up to $250,000 in medical expenses and up to $1 million in emergency medical transportation. The company will pay up to $2,000 for lost luggage.
Generali’s trip cancellation policies also stand out: You can get 175 percent of ticket costs reimbursed, plus a $1,000 reimbursement for travel delays of at least six hours (with the premium plan).
Generali even covers trip cancellation costs resulting from the sickness or death of a service animal or if you weren’t able to get vaccinations required to visit your destination.
Travelex, which has also been in business for more than 50 years, specializes in customizable trip insurance plans. The company covers children 17 and younger at no extra cost.
Travelex has four base policy plans. The Travel Select plan includes “cancel for any reason” trip cancellation coverage which is typically available as a rider with most carriers.
Expense caps tend to be lower than Generali’s: Travelex will pay up to $1,000 to reimburse for lost bags and $100,000 for medical care. But other aspects of the coverage resemble Generali Global’s plans
Travelex stands out because travelers can customize coverages, building in specific coverages while excluding others.
People who travel as a way of life often like companies that can cover multiple trips or offer continuous coverage. RoamRight excels in this market.
The company has a wide variety of options, from comprehensive policies to medical only policies. Medical payouts tend to be lower, at $50,000, but emergency medical transport costs cap out at $1 million.
You can get free coverage for one child (younger than 18). Like a lot of the leading trip insurance providers, RoamRight has a support line open 24 hours a day with translation services available for global travelers.
World Nomads caters to travelers who seek adventure and unpredictability. Customers can buy additional coverage during a current trip which can help you find the right balance between spontaneity and responsibility.
Despite this flexibility, World Nomads isn’t for everyone. In fact, the company won’t cover pre-existing medical conditions or people older than 70. The company also won’t cover large groups.
World Nomads does excel at covering injuries from accidents and damages to gear such as bikes or climbing harnesses.
If you’re a wanderer who seeks adventure but also wants some financial protection from the unexpected, consider World Nomads.
Allianz Global Assistance
Allianz offers another comprehensive approach with a variety of coverage levels to meet your trip’s needs.
Whether you need a simple trip cancellation policy or complete coverage and support for an extended, global trip, Allianz should have a plan for you.
Children 17 and younger get free coverage when traveling with a parent or grandparent.
Capped at $50,000, medical payouts tend to be lower than some of Allianz’s competitors, but the wide variety of plans allows for savings elsewhere in Allianz’s trip insurance products.
An Aggregator: Travelinsurance.com
Though it’s not an actual travel insurance company, an aggregator like TravelInsurance.com can help you find the right trip coverage, saving time and money. The site helps customers quickly assess coverage from different companies.
The site includes policies from quality companies, such as the companies listed above. You can enter details about your trip and the coverages you need. The site should generate a list of available options to compare.
Travelinsurance.com can connect you with some great coverage, but it’s still up to you to read the fine print and decide whether the coverage provides the protection you want.
There are several other travel insurance providers that deserve consideration as well.
These companies didn’t make our list of top providers but we have created some more detailed reviews that you can view below:
How Travel Insurance Works
As you shop for coverage, you’ll notice the word “reimbursement” appearing consistently in your travel insurance policy. Typically, travel insurance won’t pay to resolve issues in real time.
Instead, you’ll have to cover the costs and then seek reimbursement from your insurer. Trip insurance protects you from losing money on unexpected expenses; it doesn’t solve the actual problem while you’re traveling in most cases.
To get reimbursement, you have to file a claim. As you compare companies, be sure you understand the requirements for filing a claim.
If you lose a suitcase and have to replace your clothes and toiletries, most travel insurance companies will require receipts as proof you purchased the items on the trip.
If you cancel a trip because of jury duty or illness, most companies will require some documentation to show proof of these causes before paying on a claim.
Access to 24 Hour Assistance
Travel insurance plans can help some while you’re on the move. Most of the companies I listed above offer a 24-hour helpline which can connect you with resources in the area you happen to be inhabiting at the moment.
Some of the best plans can make arrangements for you if you miss a connection because of a delay or if you have to evacuate your seaside resort because of a tsunami warning.
Before leaving for your trip, make sure you have your travel insurance company’s helpline saved in your phone or at least written down somewhere.
What Travel Insurance Doesn’t Cover
All travel insurance companies exclude some perils, especially if they’re caused by the policyholder’s inattention or negligence. Read a policy carefully before buying the coverage if you’re concerned about specific exclusions.
Common exclusions include:
Trip policies often deny claims if you already had a medical diagnosis and it led to your hospitalization or doctor’s visit while traveling. If you live with a medical condition, pay special attention to your policy’s rules about pre-existing conditions.
Traveling for Medical Care
When the primary purpose of your trip is to see a medical expert in a different country, don’t expect your travel insurance to pay for the medical visit.
Are you visiting another country (or another state) to compete in an extreme sport such as mountain climbing or a triathlon? A trip insurance policy won’t likely pay a claim if you’re injured in the process.
Breaking the Law
Claims resulting from law breaking or incarceration in another state or country aren’t likely to get paid by your travel policy. The same often holds true if you’re injured or become the victim of a crime while intoxicated.
If the weather’s bad enough to cancel your flight, your trip insurance will help. If you reach your destination and it rains all week and you’d like a do-over, your trip coverage won’t help.
Anything Not Listed
Typically, a travel policy will list the coverages it offers and exclude all other coverages. You can add a “cancel for any reason” rider to many policies that will extend your cancellation coverage beyond the list of covered perils.
Alternatives to Trip Insurance
For many people, paying $800 in premiums to protect a $10,000 investment in a trip makes a lot of sense. Others, however, would prefer to take their chances and spend that $800 somewhere else.
It’s totally up to you. If you can afford to replace an entire trip on your own, or if you don’t mind the risk, you have the freedom to skip trip insurance.
In some cases, you can find alternative protections for parts of your trip:
Packing Your Own Precautions
Each year, travel insurance companies sell about $2 billion in trip coverage. Some of this money is well spent, but some travelers buy coverage they don’t need and will never use.
Before you buy coverage for a trip, read the fine print and learn how you’d use the policy if needed.
Your travel coverage can’t insure you’ll have a great time or that you’ll be safe. But your coverage can pay you back if your adventure goes off the rails.*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.