Expert Tips for Anyone Who Doesn't Understand Travel Insurance

Vacations are investments, so aren’t they worth protecting?

Last summer, I got into a fight with a street curb in Milan…and lost. That night, as I lay in my Airbnb, watching my badly sprained foot turn a deep shade of black that would have been so intriguing had it not been attached to my body, two thoughts occurred to me: This really hurts and I’m glad it wasn’t worse.

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Unfortunately, my traveler’s insurance didn’t include trips abroad, so instead of seeking help, I spent the rest of my stay hobbling around in loosely tied shoes, assuring people it “wasn’t that painful.” (It was, in fact, very painful.) When I got home, I immediately went to a doctor — then immediately became the proud owner of an annual travel insurance policy that covers medical mishaps, theft, broken gear, and flight delays.

According to the US Travel Association, in 2018, Americans spent nearly $3.8 billion on policies, up 40.9% from 2016 thanks to an increased awareness of issues that could disrupt a trip and the desire to protect an investment. However, as Stan Sandberg, founder of travelinsurance.com, tells me, my experience’s subsequent entry into the market isn’t uncommon.

“Insurance is one of those things that you hope you never need it, but when you do need it, thank god you have it,” Sandberg says. “So a lot of people discover travel insurance for the first time when they’re faced with a travel disruption or issue.”

Travel insurance is a mysterious service that we most often encounter while buying flights online when we’re asked to check a box to “protect our trip.” Without doing some research, the average consumer isn’t always aware of what they’re agreeing to. It doesn’t help that every policy and company is slightly different: Sandberg estimates there are at least 50–60 options in the US alone (travelinsurance.com offers nine). Here are a few points to consider when opting to protect your trip.

1. Insurance Isn’t Just For Medical Issues

If you’re like me, aka gifted with two left feet, health and safety concerns might be the reason you initially choose insurance. However, trip cancellation/interruption benefits account for almost 90% of policies sold — a trend that Sandberg predicts will continue to rise. (Thanks, hurricane season!)

If you do get stuck at an airport (or if your cruise or train trip gets interrupted), all your costs, like lodging, food, internet, and toiletries, will be covered. Missing luggage? Stolen work gear? Worker strikes? Yeah, that’s covered too, which brings us to the next point...

2. Always Read The Fine Print

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Whether you’re taking Orbitz up on its protection plan or shopping for your own, it’s important to know exactly what you’re getting. Sure, coverage for “trip cancellations” sounds good, but does the insurance cover “any reason,” or will you have to buy a policy add-on? Yes, you’re covered for medical, but what if your injuries or illness exceed your total insured amount? Of course, they’re willing to airlift you home, but what if you’re deep in the Amazon and not in a well-trekked, relatively affordable destination to travel to, like London or Paris?

It’s also worth noting that if you have a pre-existing condition, you’re not shut out. Look for a claim that has a “pre-existing condition exclusion.” As long as you’re not sick at the time you purchase your coverage and the payment is made along with the rest of your trip, then congrats, you’re covered.

3. Buy Insurance Sooner Rather Than Later

Insurance only covers unexpected travel disruptions and illnesses, so it’s best to buy it as far ahead as possible. (Or to opt for an annual plan if you’re making multiple trips outside the country.) This is doubly important when it comes to storm-related weather and natural disasters.

“Once a storm is named and people are aware of it, the insurance carriers consider that the point at which the risk becomes known, and then it becomes uninsurable,” Sandberg says. Since hurricane season runs August through October, make sure that you buy travel insurance for any trips during that window months prior.

4. Know Before You Go

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Equally important is knowing what your vacation might entail. There’s a large gap in coverage available between seeing the local sights and running with the bulls. “If you’re planning on doing that specialized high-risk adventure travel, then it’s really important to do a little bit of digging or spend a little more time to make sure the travel insurance plan does cover the activities you’re looking to do,” Sandberg says.

Most of the time you’ll be fine, but for high-risk activities (think: BASE jumping, skydiving, scuba diving outside of a resort), you might need additional coverage. Look for a company like World Nomads, Travel Guard, or Travelex, which cater to those interested in high-octane activities.

5. If You’re Traveling Abroad, Yes, You Should Buy Insurance

If you’ve grabbed a cheap last-minute domestic ticket, it might not be worth the cost to secure what would ultimately be a small loss. (If you have health insurance, you’re already good on the illness and injury front.) For longer trips, though, it’s crucial to protect your investment and your health, since medical costs abroad can add up quickly.

“A lot of people have gone through transitions in health coverage over the last few years,” Sandberg says. “Whether it’s an ACA exchange-type plan (like the Affordable Healthcare Plan that allowed many to afford insurance for the first time) or something similar, they don’t have the coverage that they think they had.”

6. How Much Should Insurance Cost?

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Short answer: It depends. Are you going on a multi-month, multi-country Eat Pray Love cosplay trip or a quick weekend away with friends? Are you a healthy twentysomething or entering your golden years? Daredevil or just looking to sip tea? All these factors are considered when calculating a policy.

The rule of thumb for pricing is roughly 4%–10% of your total trip for coverage protection. If you’ve got a serious case of wanderlust and you make more than four trips out of the country each year, consider investing in an annual policy. For a healthy traveler in their twenties or thirties, coverage begins at $135.

7. Don’t Worry, Making A Claim Isn’t Difficult

Let’s say something has happened and you need to file a claim that falls within the boundary of your policy. While this sucks (yes, the technical term for the situation), it doesn’t mean the reimbursement process necessary will. “The key to getting a claim paid is about being organized with the receipts and having the information at hand,” Sandberg says.

Make sure you’re methodical about documentation. Too sick to travel? Get a doctor’s note. Passport stolen? File a police report. Stuck in a hotel for a few nights? Save that invoice. Most companies have a 20- to 90-day window for claims, so once you've got everything, file promptly using your provider’s digital-claims portal.

Bon voyage!

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