Should You Protect Your Summer Plans With Travel Insurance? What You Need To Know

As the summer travel season heats up, more and more people are gearing up for vacations and family vacations. However, as demand for air travel increases, more and more flights are being canceled due to staff shortages and staffing issues, which are taking their toll on the airline. At the same time, the current COVID-19 pandemic makes travel more questionable than ever.

With so many travel factors beyond our control, it seems tempting to purchase travel insurance. Travel insurance can provide protection against unforeseen circumstances that could upset your travel plans, as well as security in the event of adversity.

Travel insurance is not the same as travel insurance, although they may seem the same and many travelers find them interchangeable. Travel insurance is a regulated product issued by an insurance company. Travel protection offered by travel agencies or travel agents is not very comprehensive and less expensive and usually only involves waiving fees or providing trip cancellation credits.

In early 2020, at the start of the pandemic, travel insurance did not always cover canceling a trip due to a closure. But now travel insurance policies have changed, offering more COVID-related remedies.

If you're traveling this summer, we'll tell you if we're canceling your travel insurance, how it differs from travel protection, and what to consider before you buy.

What is travel insurance?

Travel insurance is the main insurance policy controlled by government insurance agencies. By taking out travel insurance, you can be compensated for any losses during your trip. Covered events can result in unexpected inconveniences such as delayed baggage and even serious disruptions such as illness or injury.

As always, check with your official source about visa requirements and travel requirements for your specific destination, as you might not want to be surprised. For example, if you plan to travel to Cuba, according to the State Department, you may be surprised that you need health insurance outside of the United States. Travel insurance covers this requirement.

What Does Travel Insurance Really Cover?

A typical travel insurance has two components: trip cancellation expenses and medical expenses.

cancellation of the trip

If you are unable to travel due to an unforeseen event, your travel insurance will reimburse you for all anticipated non-reimbursable expenses, such as flights and hotel reservations, which are otherwise non-reimbursable. Contingencies usually include things beyond your control that prevent you from traveling, such as: Bad weather, injuries or illnesses, and in most (but not all) cases now include COVID-related illnesses.

It was not offered when the 2020 COVID-19 shutdown began. "[The public] was nervous that most insurance policies had pandemic exceptions," analyst Michael Justy told Insurance Quotes. “But the travel industry has reached out to consumers and built COVID into policy. So if you get COVID and are unable to travel, your expenses will be covered."

Pre-existing conditions caused by pre-existing conditions are also covered. For example, if you have asthma and you're attacked, Justi says it's still unpredictable. Planned events such as B. Travel during the eighth month of pregnancy are not insured.

Government orders that may apply during your trip aren't necessarily covered, Just said. This means your policies may not be covered if you're unable to board a flight due to a new mandate. The fear of traveling is also not covered; So if you are afraid to travel for fear of contracting COVID, your insurance policy will not reimburse you for the trip.

medical bills

The second part of a typical travel insurance policy covers medical expenses if you are outside of your home insurance network during your trip. This often includes doctor visits for minor illnesses, such as gastrointestinal illnesses, as well as emergency services, including medical evacuation. Your travel insurance company will discontinue your health insurance coverage (depending on tariff and deductible). Read the fine print to make sure it's included in your plan.

What about travel protection? What is different?

Although travel insurance can provide financial compensation for rental damage, lost baggage, flight delays, medical expenses, and ticket cancellations, travel protection generally allows you to change, cancel, or return a purchased trip (such as a flight or hotel). You can often find airlines that offer travel protection when you buy your ticket online, helping you get your money back or offering you a travel loan if you need to cancel a flight.

Travel protection, also known as trip protection, is not offered at hotels but can be purchased when booking a cruise. But it's generally not advisable to charge a fee for cruise lines because coverage is so limited when you read the fine print, says Bennett J. Wilson, editor of The Points Guy.

Premium credit cards can also cover certain travel expenses as a cardholder discount. This coverage is often referred to as travel insurance, but offers a small amount of what you would typically get when buying through an insurance agency. What you cover depends on the map, but Wilson says you're typically looking for emergency evacuation, death, sight loss, or limb cover.

To ensure you are purchasing valid travel insurance, do not search for the word "insurance". Make sure you find a reputable travel insurance brand that works with travel insurance, like Allianz Reiseversicherung. Alternatively, before you buy, you can make sure the company you are buying from is listed with AM Best and the US Travel Insurance Association.

How much does travel insurance cost?

The amount of travel insurance depends on several factors:

your age

The cost of your trip

The purpose of the trip

travel time

Selected coverage (flights and hotels, prepaid travel, etc.)

However, a good rule of thumb, according to Justi, is to budget between 5% and 10% of the total cost of the trip for travel insurance.

What is cancellation insurance for any reason?

Cancellation Insurance or CFAR is aptly named: it allows you to cancel for any reason and receive compensation beyond your usual travel insurance. Although these policies are more expensive, they usually don't cover 100% of your costs if you cancel. And you must book and buy this trip soon.

"Once travel deposits are made, time starts to turn," Just said. "So you have to buy that insurance policy for a specific period of time. You don't want to buy a policy in six months if you go on a trip and find out about the new COVID option."

"CFAR can reimburse up to 75% of the cost of a trip if you have to cancel it for a reason not covered by your policy," said Megan Moncryff, director of marketing for SquareMouth.com, a travel insurance comparison and quoting system. . "This is an additional bonus of between 40% and 50% and is only valid for 21 days after booking the first trip."

Do all travel insurance companies cover claims related to COVID?

While most travel insurance companies have claimed cancellation insurance related to COVID, not all have. While most plans offer COVID-related protection, you'll only be covered if you're sick, not if you're afraid to travel due to the outbreak.

According to Moncryffe, coverage varies from $50,000 to $1 million per passenger, depending on the policy. SquareMouth.com suggests looking for a policy with at least $50,000 coverage and $100,000 for medical evacuation.

If you're particularly concerned about COVID infections or are at high risk and concerned about hospital costs, consider a policy with higher medical benefits. Some companies offer COVID medical insurance plans for $500,000 per person and reimburse 100% of travel expenses for COVID-related illnesses. These companies include:

It is important to speak to your insurance provider and read the detailed letter if you have any questions about your coverage.

Does travel insurance cover the cost of forty?

This is where it gets complicated. Suppose you are on a trip to London and caught COVID-19 before your weekend flight and now you have to quarantine until your test is negative. Suddenly you need extra money for room, board and maybe medical care while you are away from home.

Does travel insurance cover these costs? Corresponding. "Politics will be politics," Just said. Some plans may include additional coverage for hotel accommodation and airfare if you need to self-quarantine. However, the advice may not cover the entire quarantine, but part of it. You may want to review your travel delay plan or travel disruption benefits to see if quarantine disruptions are included.

"Most policies will be extended by seven days from the scheduled return date, although some policies may be extended longer," Moncryff said. The benefits of a travel delay can range from a few hundred thousand dollars. At the highest level: a maximum payment of $2,000 per passenger, or about $150-$250 per day.

If your travel allowance includes quarantine money, your plan may also include compensation for prepaid portions of the trip, including excursions.

We contacted the insurers to see their offers, but we didn't get an immediate response. We will update this article as new information becomes available.

Should I take out travel insurance?

Corresponding. If you are paying a deposit for your trip, especially on trips where all cruise fares are paid, you may want to purchase insurance. If something happens you risk losing all your deposited funds and travel insurance prevents that risk.

On the other hand, if you're flying to visit family and aren't paying for accommodation, insurance may not make sense, especially if the airline offers an easy cancellation policy. However, if you are worried about having to cancel a trip due to COVID infection, choosing comprehensive travel insurance can give you peace of mind.

To learn more, check out CNET's recommendations for the best credit cards for travel, with tips for traveling safely in 2022 and how to make travel cheaper as airfares soar.

Find out about cheap airfares and the pros and cons of travel insurance