As summer is officially ahead of us, more and more people are starting vacations and family getaways. Demand for air travel is growing asrestrictions are being lifted, but the aviation industry still faces challenges due to staff shortages and labor problems, as well as rising airfare and scheduling reductions due to rising fuel prices.
With so many travel factors out of our control, buying travel insurance could be tempting. A travel insurance policy can provide protection from unforeseen circumstances that disrupt your travel plans, while offering peace of mind in uncertain times.
Although often considered interchangeable, travel insurance and travel protection are not the same thing. Travel insurance is a regulated product insured by an insurance company and usually offers several provisions related to COVID. Travel protection, often offered by travel agencies or travel companies, is less comprehensive and cheaper, and generally only offers waiver of fees or travel cancellation loans.
If you arewe will tell you about travel insurance coverage for cancellation, how it differs from travel insurance and what to consider before buying.
What is travel insurance?
Travel insurance is the main type of insurance policy supervised by state insurance regulators. By purchasing a travel insurance plan, you can get compensation for losses that may occur during the trip. Covered incidents can range from unexpected inconveniences such as delayed luggage, to major interruptions such as illness or injury.
As always, check with official sources regarding visa requirements and travel to your specific destination, as you do not want to be caught unprepared. If, for example, you want to travel to Cuba, you may be surprised to find that you need health insurance outside the United States, according to the State Department. A travel insurance policy will cover this requirement.
What does travel insurance actually cover?
A typical travel insurance policy consists of two elements: a travel cancellation service and medical expenses.
If you are unable to travel due to an unforeseen event, travel insurance will reimburse you for non-refundable advance costs, such as flights and hotel reservations that cannot otherwise be refunded. Unforeseen events usually include things you have no control over that prevent you from traveling, such as bad weather, injury or illness – which now includes COVID-related illnesses in most (but not all) cases.
This was not on offer when the shutdowns of COVID-19 began in 2020.[The public] he was nervous because most insurance policies had exclusions due to the pandemic, “said Michael Giusti, an analyst at Insurance Quotes.” But the travel industry turned to consumers and included COVID under the policies. And so, if you get sick from COVID and can’t travel, they’ll cover your expenses. “
Even unforeseen events caused by pre-existing conditions are included. For example, if you have asthma and experience an attack, it still counts as an unforeseen event, according to Giusti. Predicted events, such as travel during your eighth month of pregnancy, are not covered.
Nor are government mandates that can take effect while you travel necessarily covered, Giusti said. This means that if you cannot get on the flight due to the new mandate, you may not be covered by the policy. And the fear of travel is also not covered – so if you are afraid to travel due to concerns that you will catch COVID, your travel insurance policy will not reimburse your trip.
The second part of a typical travel insurance policy covers medical expenses if you are outside the home insurance network while traveling. This often includes visits to the doctor due to minor illnesses, such as stomach bugs, as well as emergency services, including medical evacuations. Your travel insurance company will raise the bill for everything that your health insurance will not cover (depending on your plan and franchise). Read the small print to make sure this is included in your plan.
What about travel protection? How is it different?
While travel insurance can offer financial coverage for rental damage, lost luggage, flight delays, medical bills and ticket cancellations, travel protection usually only allows you to change, cancel or refund your purchase (such as a flight or hotel). You will often find airlines that offer the option to purchase travel protection when you buy a ticket online, which can help you get your money back or offer you a travel loan if you have to cancel your flight.
Travel security, also called travel security, is not offered by hotels, but can be purchased when booking a cruise. However, the introduction of cruise protection bills is generally not recommended, as coverage is extremely limited when you delve into the fine print, says Benét J. Wilson, senior editor for The Points Guy.
Premium credit cards can also offer coverage for some travel expenses as a convenience for card members. This coverage is usually referred to as travel insurance, but it offers some of what you would normally get when shopping through an insurance agency. What is covered depends on the card, but you usually look at coverage for emergency evacuation, death, vision loss or limb loss, according to Wilson.
To make sure you’re buying the right travel insurance policy, don’t just look for the word “insurance” – be sure to look for a well-known travel insurance brand that works with a travel insurance insurer, such as Allianz Travel Insurance. In addition, you can check before buying to see if the company you are buying from is listed on AM Best and the American Travel Insurance Association.
How much does travel insurance cost?
The amount you pay for travel insurance depends on several factors:
- Your age
- The cost of your trip
- Travel destination
- Travel duration
- Your choice of coverage (flights and hotels, prepaid excursions, etc.)
In addition, a good rule of thumb when planning travel insurance is 5 to 10% of the total cost of the trip, according to Giusti.
What is cancellation insurance for any reason?
Cancellation Insurance for any reason, or CFAR, does exactly what its name promises: it allows you to cancel for any reason and receive compensation, exceeding the limits of typical travel insurance. However, not only are these policies more expensive, but they usually do not cover 100% of your cancellation costs. And you need to buy this insurance soon after you book your trip.
“As soon as you put aside your travel deposits, the clock starts ticking,” Giusti said. “So you have to buy that insurance policy within a certain time frame. They don’t want you to buy the policy six months later when you go on a trip and hear about the new COVID variant.”
“CFAR can reimburse up to 75% of travel costs if they have to cancel for a reason not otherwise covered by their policy,” said Megan Moncrief, marketing director at SquareMouth.com, a travel insurance citation and comparison mechanism. “It costs an additional 40 to 50% of the premium and qualifies only within 21 days of the first travel reservation.”
Do all travel insurance companies cover COVID-related damages?
Although most travel insurance companies have generally turned to covering COVID-related cancellations, not all have done so. Moreover, while most plans offer protection regarding COVID, they will only cover you if you are sick, not if you are afraid of traveling because of the epidemic.
Coverage amounts vary depending on the policy and can range from $ 50,000 to $ 1 million in coverage per passenger, according to Moncrief. SquareMouth.com is proposing a policy search with at least $ 50,000 in medical coverage and $ 100,000 in medical evacuation.
If you are particularly concerned about COVID infection or if you are at high risk and concerned about the cost of hospitalization, you may want to consider policies with greater medical benefits. Some companies offer plans for $ 500,000 in medical coverage for COVID-19 per person and reimburse 100% of travel costs for canceling COVID-related illnesses. These companies include:
It is important to talk to your insurance provider and read the fine print if you have any questions about your coverage.
Does travel insurance cover quarantine costs?
Here’s where it gets awkward. Let’s say you’re on a trip to London and you contracted COVID just before your departure flight, and now you have to quarantine until the test is negative. Suddenly, you will need extra money for accommodation, meals and, potentially, medical care while you are away from home.
Will travel insurance cover these costs? It depends. “This is going to be politics after politics,” Giusti said. Some plans may have additional coverage for hotel stays and airline tickets in case you need to quarantine. In addition, the board may not cover the entire quarantine, but only part. You will want to look at the benefits of your travel delay or interruption plan to see if quarantine interruptions are included.
“Most policies are extended seven days after the scheduled return date, although some rules may be extended longer,” Moncrief said. The travel delay fee can range from a few hundred to a few thousand dollars in coverage. At the highest end is a maximum payout of $ 2,000 per passenger, which comes down to about $ 150 to $ 250 per day.
If quarantine is included in your travel interruption benefit, your plan may also provide compensation for missed prepaid portions of your trip, including excursions.
We contacted the insurance companies to see their offer, but we did not receive an immediate response. We will update this article as we receive new information.
Do you need to buy travel insurance?
It depends. If you have made a deposit for your trip, especially for travel with paid expenses such as cruises, it may be worth buying travel insurance. If something happens, you risk losing all the money you deposited, and travel insurance would prevent that risk.
On the other hand, if you are just flying to visit family and not paying for accommodation, it may not make sense to buy travel insurance, especially if the airline offers a simple cancellation policy. But if you are worried that you will have to cancel your trip due to COVID infection, then choosing travel insurance with wide coverage can give you peace of mind.
For more, see the CNET recommendations fortips for and how to make travel more affordable despite rising flight costs.