Travel insurance is insurance that is intended to cover medical expenses, trip cancellation, lost luggage, flight accident and other losses incurred while traveling, either internationally or domestically.
Travel insurance can usually be arranged at the time of the booking of a trip to cover exactly the duration of that trip, or a "multi-trip" policy can cover an unlimited number of trips within a set time frame. Some policies offer lower and higher medical-expense options; the higher ones are chiefly for countries that have high medical costs, such as the United States.
Some credit card issuers offer automatic travel insurance if travel arrangements are paid for using their credit cards, but these policies are generic and particular care must be taken to take into account personal requirements. There are many travel insurance policies available in the market place, but care must be taken of what events are covered by each policy, and what exclusions, exceptions and limits apply, besides other issues.
In general, you should expect a plan will cost anywhere from 4%-10% of your total pre-paid, nonrefundable trip cost. For example, if you purchased a trip with a total cost of $5,000, travel insurance policies available to you will likely range in price from $250-$500, depending on variables.
The most common risks that are covered by travel insurance plans are:
Medical treatment, including transportation to the medical facility.
Cancellation, curtailment and trip interruption
Repatriation of remains
Return of a minor
Visitor health insurance
Accidental death, injury or disablement benefit
Overseas funeral expenses
Lost, stolen or damaged baggage, personal effects or travel documents
Delayed baggage (and emergency replacement of essential items)
Flight connection was missed due to airline rescheduling or delay.
Travel delays due to weather
Medical expense coverage can be per-occurrence or maximum-limit.
Some travel policies will also provide cover for additional costs, although these vary widely between providers. Almost $2 billion in travel insurance is sold each year.
In addition, often separate insurance can be purchased for specific costs such as:
Pre-existing conditions (e.g. asthma, diabetes)
Sports with an element of risk (e.g. skiing, mountain climbing, scuba diving)
Travel to high risk countries (e.g. due to war, natural disasters or acts of terrorism)
Additional AD&D coverage
Rental Car Coverage
Cancel for Any Reason Coverage
3rd party supplier insolvency (e.g. the hotel or airline to which you made non-refundable prepayments has gone into administration)
Acute onset of pre-existing conditions
Specific event coverage (e.g. to cover travel cancellation costs if the reason the person is traveling, such as a concert, is cancelled)
Certain countries will require that you have purchased sufficient coverage should something happen while you are traveling to that country. Those governments do not want to be burdened with the costs of your medical care and will require you to have a suitable plan meeting certain minimum requirements.
Students traveling to the USA are required to have a qualified plan during their period of study.
Depending on the length of stay, travelers to countries in the Schengen area are required to prove they have sufficient insurance at the time of their visa application.
Health insurance is mandatory for visitors to enter the UAE (Dubai, Abu Dhabi, etc) and require a visit or tourist visa.
Companies running group tours often require insurance, as do many cruise companies.
Generally, most countries where you are applying for a visa are likely to also require a minimum level of travel insurance.
The common exclusions in travel insurance policies include pre-existing medical conditions, unlicensed operation of a vehicle, travelling for the purpose of receiving medical treatment, elective surgery or treatment, or injury or illness caused by alcohol, drug use, or reckless behavior, including engaging in some sporting activities. Events arising from war and terrorism are usually excluded, but most policies allow trip cancellation arising from war or an act of terrorism that meets the policy's criteria.
Insurance companies issuing new policies will often exclude circumstances based on an ongoing event, such as typhoons or floods. Long-term exclusions may be announced for specific events.
Some policies exclude travel to certain countries, or parts of countries, where a greater risk is expected. These determinations are often made based on official government travel advice from organisations such as the US State Department or the Australian Department of Foreign Affairs.
Travel insurance can also provide helpful services, often 24 hours a day, 7 days a week that can include concierge services and emergency travel assistance. Pre-existing medical conditions must be declared prior to the trip start date. The European Health Insurance Card (EHIC) entitles to treatment in state-run hospitals in EU countries and Iceland, Norway, Liechtenstein and Switzerland, but it is not a substitute for travel insurance.
To find the best travel insurance, we looked at 22 of the nation's top providers. Our mission: find the ones that offer primary medical coverage, generous limits, few exclusions, and top-notch customer service. The cost will depend on you, your trip, and who's coming with - which is why it's important to compare quotes from multiple providers.
The travel insurance industry is full of unclear language and companies hiding behind various names. To help you pick the best policy, we've selected eight companies we're confident are at the top of the heap. The travel insurance industry is a hall of mirrors, full of unclear language and companies masquerading by various names.