Travel insurance: What does it cover and when do you need it?


Not all travel insurance is the same. Some policies only cover certain kinds of trip cancellations. Here are some questions to help you decide if you need travel insurance and what kind of policy will work best for your trip.

  1. What does it cover?

Cancellations: Some policies will only cover trips canceled for certain reasons such as weather or illness. And policies may have exclusions for cancellations due to a preexisting medical condition or if an epidemic or pandemic is declared. You can also pay more for “cancel for any reason” coverage.

Medical coverage: You can also buy medical policies that cover emergency medical and dental expenses while you’re traveling that aren’t covered by your regular health policy. Some policies cover medical evacuations, which can be costly depending on where you’re visiting and probably wouldn’t be covered by your regular health plan.

Other coverage: You can also find policies to cover medical evacuations, lost luggage, and many other potential situations.

Make sure you know exactly what a plan covers before buying.

2. What’s your risk?

Cancellation penalties: You may be able to cancel some parts of your trip, including hotels and tours, without financial penalty. Check the cancellation policies for each item you’ve booked in advance and see how much money you’d lose if you had to cancel all or part of your trip.

Medical expenses: Check with your health plan to see if it would cover medical expenses if you got sick or hurt on your trip. This is especially important if you’re traveling abroad because most health plans, including Medicare, won’t cover treatment in another country. Think about how you’d get to a hospital or medical care if you’re traveling to a remote area.

Coronavirus risk: Check the Centers for Disease Control and Prevention website for the latest information and guidance related to COVID-19.

3. Am I already covered?

Your homeowners or renters insurance may include travel coverage. Ask your insurer or agent what your policy covers. Some credit cards include travel protections or may offer travel insurance, too, so ask when you use the card for trip expenses.

When you’re planning your trip, consider what you paid and decide if it’s something that makes sense for you. If you decide travel insurance is a good option for you, you can search the internet to compare plans and prices.

For more information, click here.

Teaching Suggestions

  • Ask students if they or their family members have purchased travel insurance.  If so, what have been their experiences?  If not, why they chose not to purchase travel insurance?
  • Ask students to make a list of travel circumstances when it might be wise to purchase travel insurance.

Discussion Questions

  1. Under what scenarios should you spend more money for “cancel for any reason” travel insurance?
  2. Is it better to buy travel insurance from tour operators, cruise lines representatives or travel agents?  Explain.
  3. Is it essential for an international traveler to consider travel insurance?  Why or why not?

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