Is travel insurance worth it this summer? What to know before your next trip

As summer officially arrives, more people are starting family vacations and vacations. The demand for air travel is rising covid-19 pandemic Restrictions lifted, but the airline industry still faces challenges from before cancellation of journeys Due to staff shortages and labor issues, as well as higher aircraft prices and scheduling reductions from higher fuel prices.

With so many travel factors out of our control, buying travel insurance can be tempting. A travel insurance policy can provide protection against unforeseen circumstances affecting your travel plans, while also providing peace of mind in uncertain times.

Although they are often thought of as interchangeable, travel insurance and trip protection are not the same thing. Travel insurance is a regulated product that is guaranteed by an insurance company, and usually offers more provisions related to COVID. Trip protection, often offered by travel agencies or travel companies, is less comprehensive, less expensive, and usually only offers a fee waiver or credit for canceling your trip.

if I were Traveling this summerIn this article, we’ll tell you about travel insurance coverage for cancellations, how it differs from trip protection and what to consider before you buy.

What is travel insurance?

Travel insurance is a major type of insurance policy overseen by state insurance regulators. By purchasing a travel insurance plan, you may be compensated for losses that may arise during your travels. Covered incidents can range from unexpected inconveniences like baggage delays, to major interruptions like illness or injury.

As always, check official sources regarding visa and travel requirements to your specific destination, because you don’t want to be surprised. If you want to take a trip to Cuba, for example, you might be surprised to find that you need non-US medical insurance, according to the State Department. A trip insurance policy will cover this requirement.

What does travel insurance actually cover?

A typical travel insurance policy consists of two components: trip cancellation services and health costs.

Flight Cancellation

If you are unable to travel due to an unforeseen event, travel insurance will reimburse you for advance non-refundable costs, such as flights and hotel reservations that are not otherwise refundable. Unexpected events usually include things you have no control over that prevent you from traveling, such as bad weather, injury or illness – which now includes COVID-related illness in most (but not all) cases.

This was not available when the COVID-19 lockdown began in 2020.”[The public] “He was nervous because most insurance policies contain pandemic exclusions,” said Michael Giusti, an analyst at the insurance company. But the travel industry has been consumer-centric and has incorporated COVID into the policy framework. Thus, if you get sick with the COVID virus and cannot travel, they will cover your expenses.”

Unexpected events resulting from pre-existing conditions are covered. For example, if you have asthma and have had an attack, this is still considered an unexpected event, according to Gusti. Expected events, such as travel during the eight months of pregnancy, are not covered.

Gusti said government mandates that may come into play while you’re traveling aren’t necessarily covered either. This means that if you can’t board a flight due to a new authorization, you may not be covered by your policy. Fear of travel is also not covered – so if you fear travel due to fears of contracting COVID, your travel insurance policy will not reimburse your trip.

health expenses

The second part of a typical travel insurance policy covers health costs if you are outside your home insurance network while traveling. This often includes visits to the doctor for minor illnesses, for example, a stomach bug, as well as emergency services, including medical evacuations. Your travel insurer will pick up the tab for anything your health insurer won’t cover (depending on your plan and deductible). Read the finer details to make sure they are included in your plan.

What about flight protection? What does it differ from?

While travel insurance can offer financial coverage for rental damage, baggage loss, flight delays, medical bills and ticket cancellations, trip protection usually only allows you to change, cancel, or refund a flight purchase (such as a flight or hotel). You’ll often find airlines that offer the option to purchase flight protection when you buy a ticket online, which can help you get your money back or offer you travel credit if you have to cancel a flight.

Hotels do not offer cruise protection, also called travel protection, but it can be purchased when booking a cruise. Billing a cruise line trip protection is generally not recommended, since coverage is very limited when researching fine print, according to Bennett J. Wilson, senior editor at The Points Guy.

Premium credit cards may also provide coverage for certain travel expenses as a card member benefit. This coverage is usually categorized as travel insurance, but it offers less of what you would normally get when purchasing through an insurance agency. What’s covered depends on the card, but you typically look at coverage for emergency evacuation, death, loss of vision, or loss of limb, according to Wilson.

To make sure you buy a real travel insurance policy, don’t just search for the word “insurance” – be sure to look for a well-known brand of travel insurance that works with a travel insurance company, such as Allianz Travel Insurance. Additionally, you can be sure the company you’re buying from is listed with AM Best and the US Travel Insurance Association before you buy.

How much does travel insurance cost?

How much you will pay for trip insurance depends on several factors:

  • Your age
  • The cost of your trip
  • Trip destination
  • Flight duration
  • Your coverage choices (flights, hotels, prepaid flights, etc.)

However, a good rule of thumb when budgeting for travel insurance is 5 to 10% of the total cost of the trip, according to Giusti.

Abnormal times require abnormal actions, which may include your travel insurance.

SONGPHOL THESAKIT / Getty

What is cancellation for any reason insurance?

Cancellation for Any Reason, or CFAR, does exactly what its name promises: It lets you cancel for any reason and get reimbursed, well beyond the limits of typical travel insurance. However, not only are these policies more expensive, they usually don’t cover 100% of your costs in the event of a cancellation. You need to purchase this insurance shortly after booking your travel.

“Once you check your deposit for your flight, the clock starts ticking,” Gusti said. “So you have to buy this insurance policy in the given time period. They don’t want you to buy the policy after six months when you’re about to make the trip and hear about a new COVID variant.”

“CFARs can reimburse up to 75% of the cost of a traveler’s trip if a cancellation is needed for some reason that isn’t covered in their policy,” said Megan Moncrieff, chief marketing officer of SquareMouth.com, a travel insurance comparison and comparison engine. . “It costs an additional 40-50% premium, and is only eligible within 21 days of first booking toward flight.”

Do all travel insurance companies cover COVID related claims?

While most travel insurance companies have generally focused on covering COVID-related cancellations, not all have. Furthermore, while most plans offer COVID-related protection, they will only cover you if you are sick, not if you are concerned about travel due to the outbreak.

Coverage amounts vary by policy, and can range anywhere from $50,000 to $1 million in coverage per passenger, according to Moncrieff. SquareMouth.com suggests looking for a policy with at least $50,000 in medical coverage and $100,000 in medical evacuation coverage.

If you are particularly concerned about contracting the coronavirus, or if you are at high risk and are concerned about hospitalization expenses, you may want to consider policies with higher medical benefits. Some companies offer plans for $500,000 in medical COVID coverage per person and 100% reimbursement of flight costs to cancel COVID-related illnesses. These companies include:

It is important to talk to your insurance provider and read the fine print if you have any questions about your coverage.

Does travel insurance cover quarantine costs?

Here is where it gets tricky. Let’s say you’re on a flight to London and you contract COVID just before your departing flight, and now you have to quarantine until you test negative. You’ll suddenly need extra cash for housing, meals, and possibly medical care while you’re away from home.

Will travel insurance cover these costs? It depends. “This will be one policy after another,” Gusti said. Some plans may have additional coverage for hotel stays and travel in case you have to quarantine. However, the slab may not cover the entire quarantine, only a part of it. You’ll need to look at the “travel delay” or “trip interruption” benefits in your plan to see if quarantine provinces are included.

“Most policies extend seven days beyond the scheduled return date, although some policies may extend longer,” Moncrieff said. Travel delay benefit can turn from two hundred to two thousand dollars in coverage. At its most extreme, there is a maximum payment of $2,000 per passenger, which breaks down to about $150 to $250 per day.

If quarantine is included under your Trip Interruption, your plan may also offer compensation for lost prepaid parts of your trip, including excursions.

We have reached out to travel insurance companies about their offers, but did not receive an immediate response. We will keep this article updated when we receive new information.

Should you buy travel insurance?

It depends. If you make a deposit for your trip, especially for all paid trips like cruises, it may be worth buying travel insurance. If something happens, you risk losing all the money you deposited, and travel insurance will protect this risk.

On the other hand, if you are only traveling to visit your family, and don’t pay for accommodation, it may not make sense to purchase travel insurance, especially if the airline offers a direct cancellation policy. But if you’re concerned about having to cancel your flight from contracting COVID, choosing travel insurance with broad coverage can give you peace of mind.

For more information, check out CNET’s recommendations for Best Travel Credit Cardstips about Safe travel in 2022 And how to make travel affordable despite the high cost of flights.

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