Understanding Travel Insurance: What Is Covered and When to Purchase It

In the wake of Covid, travel insurance sales have increased as people seek to protect their investments against flight delays and cancellations, extreme weather events, and the ongoing presence of the virus. However, travel insurance can be complicated, with various benefits, inclusions, and prices. Before purchasing travel insurance, here are some key things to know.

Know what’s covered

Generally, travel insurance covers unforeseen events such as illness in the family, job loss, natural disasters, transportation company strikes, terrorist attacks, or bankruptcy of travel providers. These are known as “covered reasons.” Most policies also include medical coverage, which is particularly useful when traveling abroad where regular health insurance may not apply.

The cost of a travel insurance policy varies based on age, length of travel, and type of coverage. On average, expect to pay between 4 to 10 percent of the total trip cost for insurance.

Insure nonrefundable expenses

Travel insurance is designed to protect expenses that cannot be refunded in other ways when something goes wrong. For example, nonrefundable Airbnb reservations or the cost of a cruise to a specific destination.

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