What is Travel Insurance?
In 2024 alone, Americans spent approximately $5.56 billion on travel insurance, with about 87 million travelers covered under nearly 55 million policies, according to USTIA data compiled in the Travel Protection Market Study. As more people prioritize protecting their trips, understanding how travel insurance works has never been more important. Whether you’re booking a bucket-list cruise, planning a family vacation, or heading abroad for business, this guide breaks down what travel insurance covers—and why it’s a smart investment for peace of mind.
Flight Insurance vs. Trip Insurance
Flight insurance will usually offer benefits such as accidental death travel insurance
should you fall victim to an airline tragedy, baggage protection should your luggage be
damaged or delayed, and in some cases cancellation reimbursement. More commonly
purchased though is full trip insurance which covers nearly any travel or medical
mishap that could occur.
What is Travel Medical Insurance?
Full trip insurance will include travel medical insurance. Having this type of trip
medical insurance can prevent travelers from incurring a life-changing expense. Americans are often unaware of how limited their U.S. health care plans are once they
leave the country and, in some cases, their home state. It can provide invaluable coverage should you contract COVID and require hospitalization or medical
evacuation to a nearby island or country where adequate medical care is available and
necessary. Should the worst happen and death become a reality, travel medical insurance
will even repatriate one’s remains to their home country for burial.
Trip Cancellation Insurance
The cancellation portion of travel insurance will usually cover weather cancellations,
including snowstorms and hurricanes. It can also protect you should someone scheduled
to travel or one of their loved ones suffer pregnancy complications. One of the most
popular trip insurance plan upgrades is “cancel for any reason” insurance. This allows
the policyholder to cancel their trip without having to suffer one of the typically covered
reasons such as an injury, illness, job loss, etc. For “cancel for any reason” insurance, the
policyholder will often receive between 50% to 75% of their trip costs back instead of
100%. Also, the insured must usually activate the “cancel for any reason” benefit on their
travel insurance plan 48 hours or more before their departure date.
What is Trip Interruption Insurance?
When it comes to travel insurance, most people understand trip cancellation. However,
they often ask what trip interruption insurance is?
Trip interruption insurance is another vital coverage. This benefit covers last-minute
travel expenses should someone get sick or injured on their trip and need to return home
prematurely. It even allows travelers to interrupt their trip if a family member back home
encounters a medical issue.
Common Questions About Travel Insurance
Some common questions often asked about travel insurance are: How much does travel
insurance cost? Should you get travel insurance? How do you buy travel insurance? We’ll
provide answers to those questions here.
How Much Does Travel Insurance Cost?
Travel insurance typically costs between 4% to 6% of the trip costs you’ll be insuring. For example, a $5,000 trip would yield an average travel insurance premium of about $203, with costs ranging from $81 for basic policies to $392 for premium plans (Forbes Advisor). Naturally, this range can increase or decrease considerably depending on two main factors: age and trip cost. The higher the age and trip cost, the higher the travel trip insurance will usually cost.
Who Needs Travel Insurance?
Should you get travel insurance? Who in particular really needs trip insurance?
Families
Families on vacation should strongly consider it as they tend to be highly active and
accidents can happen at any time. With non-refundable expenses like flights, hotels, and theme park tickets, trip cancellation coverage ensures you don’t lose money if a child gets sick or plans change unexpectedly.
Seniors
Seniors with trip insurance are protected against unexpected cancellations, medical emergencies, and costly last-minute changes. The unfortunate reality of life is that our bodies only get more fragile and are more inclined to get sick as we grow older. Cruise vacations are one of the most highly insured forms of travel as the cancellation penalties are frequently more severe, and the chance for a medical evacuation is higher and more costly.
International Travelers
Certainly, international travelers will want travel insurance as we already discussed the
limitations of many U.S. health care plans. Finally, business travelers should strongly
consider trip insurance as well. Flight delays are a common reality and an emergency
booking with another airline to get to that crucial meeting on time is often necessary.
How Do You Buy Travel Insurance?
Buying travel insurance is simple but gathering the right information upfront makes the process even smoother. Here’s what you’ll need to get a quote and purchase the right policy:
- Full names of all travelers
- Dates of birth or ages
- Departure and return dates
- Total prepaid trip cost (including flights, hotels, tours, and any deposits)
- Destination(s) you’ll be visiting
- Date you made your first trip payment
- Do you want Cancel For Any Reason (CFAR) coverage?
- Do you need coverage for pre-existing medical conditions?
- Are you bringing expensive gear or baggage?
- Are you participating in any adventure or high-risk activities?
Once you have your details ready, compare travel insurance plans from trusted providers. Look for a company with clear policy options, accessible support, and reliable benefits like Aegis Go Ready Travel Insurance, which offers plans for every type of traveler.
How to Find a Good Travel Insurance Company?
A good company will have a website that clearly communicates information about the
benefits of the policy, provides several trip insurance plans to choose from, and has
insurance specialists available should you want to speak with someone before purchasing.
Information You Need When Shopping for Trip Insurance
Before buying or speaking with an insurance specialist, you’ll want to consider your
coverage needs, such as: Do I want high limits for the travel medical insurance portion of
the policy? Do I need cancel for any reason insurance in case I change my mind or the
pandemic shuts down travel again? Should I purchase high baggage limits based on the
cost of the items I plan to bring?
How to Make Claims on Trip Insurance Policies
Once someone has purchased a travel insurance plan, they often want to know how
they should go about canceling before they travel or how to go about making a
medical or death insurance claim while traveling. The answers often differ based on
whether you have left for the trip yet.
If You Have Not Left Yet
If you have not left, then the only benefits that would apply would be either Trip
Cancellation or “cancel for any reason” insurance. In both of those cases you would
contact the Claims Department for the insurance company you purchased from. That
department’s contact information will be within your Summary of Benefits and
Description of Coverage documentation as well as on the company’s website.
If You are Already Traveling
If you are already traveling, you’ll want to contact the insurance company’s Emergency
Assistance Department, which is usually open 24 hours a day every day of the year.
Those 24/7 departments will help coordinate medical care and even funerary
arrangements.
Using Concierge Services
On a less urgent level, they often also have staff specializing in Concierge Services that
can assist with restaurant reservations, lost luggage, legal help, and even identity
theft.
