What exactly is travel insurance?

Travel insurance is designed to provide financial protection for unexpected events that impact a traveler’s trip. Popular benefits on a travel insurance policy include coverage for trip expenses, medical emergencies, and luggage.

While some countries recommend – or even require – some form of medical coverage for entry, travel insurance is typically optional. Travel insurance is designed to protect travelers in the event something occurs that causes financial loss before or during their trip.

Most travel insurance policies are comprehensive, with coverage for the main concerns of most travelers. If you are worried about losing the non-refundable payments you’ve made for your trip, or about a potential medical emergency during your trip, travel insurance can be an affordable way to have coverage.

yThese are the most common travel insurance benefits included in a comprehensive policy.

• Trip Cancellation – refunds 100% of your trip cost if you cancel for a reason listed by your policy, including a medical emergency, hurricane or severe weather, or terrorist attack, among others

• Trip Interruption – refunds up to 150% of your trip cost if you cut your trip short for a reason covered by Trip Cancellation

• Emergency Medical – reimburses the costs associated with treating a medical emergency during your trip

• Medical Evacuation – arranges transportation to the nearest adequate hospital in the event of a medical emergency

• Travel Delay – reimburses the costs of meals and accommodations when a trip is unexpectedly delayed

• Missed Connection – reimburses the additional costs for a traveler to catch up to their trip if they miss their departure for a covered reason

• Baggage Delay – provides reimbursement for the purchase of clothing, toiletries, and other essential items if a traveler’s luggage is delayed for a specified period of time

• Baggage and Personal Items Loss – provides reimbursement for lost, stolen, or damaged luggage

How Much Does Travel Insurance Cost?

The cost for travel insurance depends on four primary factors: your total trip cost, your age, the length of your trip, and the amount of coverage.

A comprehensive travel insurance policy, including Trip Cancellation coverage, will typically cost between 5% and 10% of your trip cost. Medical policies without cancellation coverage are often significantly less expensive.

Which Countries Require Travel Insurance?

While travel insurance is typically an optional way for travelers to protect themselves from financial loss while they’re away from home, some countries require some form of travel medical insurance for visitors from other countries. Those countries include:

• Antarctica

• Cuba

• New Zealand

• Qatar

• Russia

• Schengen countries

• Turkey

• United Arab Emirates

• Australia

How Does Travel Insurance Work? The Claims Process

Most travel insurance benefits are designed to reimburse a traveler for incurred losses related to their trip. If you’ve experienced a loss before or during your trip, you may be eligible for reimbursement from your travel insurance provider. You can contact your provider before, during or after your trip to report a claim.

Most travel insurance providers will process a claim and respond with a decision in 15-30 days. The amount of time it takes for a claim to be processed depends on the situation and how quickly all relevant information is received.

These are the steps to take to file a claim for reimbursement:

1. Report your loss to your provider as soon as reasonably possible, before, during, or after your trip. Typically, you need to provide payment up front and file a claim for reimbursement.

2. If you have not left for your trip and have a cancellation claim, file a claim with your provider immediately. If you are still traveling and have a claim, contact your provider’s 24-hour emergency assistance department. You may be able to start the claims process early while you’re still traveling, or you can file a claim when you return home.

3. You will need supporting documentation to prove the financial loss associated with your claim. This can include receipts from your trip, your credit card statement to serve as proof of payment, a cancellation notice or flight schedule from your travel supplier, or medical records, among others.

4. Your provider will contact you with a decision as soon as they have one, likely within 15-30 days.