Picture this: You’re sitting on the beach, sun on your face, cold drink in your hand, with the soothing sounds of the wind and waves lulling you to relaxation. Or at least you would be, but you got sick right before your vacation, so you’re just in your apartment. Oh, and you’re out a few hundred bucks because your flight was non-refundable.
It’s one of our biggest vacation fears – something goes wrong either before or during a trip, ruining the whole experience and costing a lot of money – and there’s nothing we can do about. Or is there?Travel insurance is less common than health insurance or life insurance, but when it comes to saving your vacation and your budget, it can be invaluable.
What travel insurance gets you
Travel insurance protects you from financial loss if something happens during your travels.
Miss a flight? Lose your luggage? Misplace your passport? A good travel insurance policy can help you recoup your costs, whether it’s refunding the price of a ticket or setting you up with somewhere to stay if you have to spend an extra night somewhere because of a missed flight. Things covered in a standard travel insurance policy include:
- Non-refundable trip costs (like a plane ticket)
- Policyholders (or companions) too sick or injured or injured to travel
- Medical evacuation
- Lost baggage
- Canceled or delayed travel
- Lost passport
Not every mishap is covered, but every travel insurance policy outlines what is and isn’t included. Get sick and have to cancel your trip? You’re probably safe. Oversleep and miss your flight? You may be on your own.
The cost of your policy depends on what’s included and, crucially, your total trip cost. A typical travel insurance policy will cost between 4% and 8% of your trip total. All in all, it’s a relatively affordable way to protect a trip, especially a high-cost one that you’ve been saving up for for a while.
Consider this: A $2,000 vacation would cost $80 to $160 to insure. If that amount helps you sleep better knowing you have recourse if something goes wrong on your trip, you may want to work the additional cost into your budget.
Another, more specific, form of insurance you might consider is travel health insurance. Most travel insurance policies include medical treatment and evacuation coverage, so if you need to get airlifted from your Amazonian excursion to a hospital, you won’t have to foot the bill even if your health insurance doesn’t cover it. Travel health insurance spins off that aspect of trip coverage. That means you don’t get comprehensive travel protection, but you gain health related coverage for a fraction of the price.
A number of major insurers and financial institutions, from USAA to AIG, offer travel insurance products. Groups like AAA and travel companies like Hotwire also partner with insurers to sell their own brand of travel insurance. Before you buy, find out what’s covered, the cost, and whether or not there are distinctions between domestic and international travel.