What Type of Insurance Do I Need for Travel?
Travel insurance is recommended for travelers that wish to limit their financial loss in the event their trip doesn’t go according to plan. Travel insurance policies can cover a wide-range of events, including flight cancellations, delays, lost luggage, and medical emergencies.
Plans can range in terms of cost and coverage, so it’s important to identify your specific needs before comparing options. Below we’ll look at the different types of travel insurance policies, and what benefits you may want to consider for your upcoming trip.
Main Types of Travel Insurance
From beach vacations to mountainous adventures, no two trips are identical. Luckily, you have a variety of options when it comes to insuring your trips. When considering what type of travel insurance you need for travel, you should take into account your budget, itinerary, and your biggest travel concerns.
Comprehensive Travel Insurance
Comprehensive travel insurance policies are the most popular option among Squaremouth users as they offer travelers the most protection from the unknown. The biggest differentiator between comprehensive policies is that they offer Trip Cancellation and Trip Interruption coverage, meaning that you may receive reimbursement if you need to cancel your trip or end your trip early.
In addition, comprehensive travel insurance policies often include generous coverage for travel delays, medical emergencies, lost luggage, and other common travel disruptions. These policies are recommended for:
- Travelers concerned about cancellations
- Families
- General travel
- Travelers with higher trip costs
Pros
- Cancellation Coverage: Comprehensive policies offer the ability to cancel a trip, or end a trip early, for a covered reason and receive reimbursement for all unused, non refundable trip costs.
- Choice: Given their popularity, there are many comprehensive policies available to choose from, each with slightly different coverage limits, benefits, and premiums.
- Coverage Limits: Given the amount of options, it’s easy to find policies that offer very generous coverage limits, such as 100% Trip Cancellation coverage, $5,000 Travel Delay coverage, and up to $500,000 in Emergency Medical coverage.
Cons
- Cost: Comprehensive policies are the most expensive single-trip travel insurance option offered by travel insurance providers due to the fact that they require travelers to insure their total prepaid, nonrefundable trip costs. The average comprehensive policy can cost travelers roughly $400. These policies will typically cost 5-10% of your total insured trip cost.
- Overlaps in Coverage: Travelers may have existing coverage for cancellations, delays, and luggage through their credit card benefits.
Travel Medical
Travel medical insurance policies are single-trip plans designed for travelers whose primary concerns are getting unexpectedly ill or injured while traveling. Since most healthcare plans don’t provide international coverage, the cost of receiving medical treatment abroad can be expensive. Travel medical plans offer generous international coverage at affordable rates.
Most travel medical plans also offer some coverage for other travel disruptions, including delays and lost luggage. These plans are recommended for:
- International travelers
- Domestic travelers without existing health coverage
- Travelers that have existing cancellation coverage through their credit card
- Travelers worried about sustaining an illness or injury abroad
Pros
- Cost-Effective: Travel medical policies are significantly less expensive than comprehensive policies, with an average premium of roughly $95 in 2023.
- Compliments Existing Coverage: Most credit cards or other sources of travel insurance don’t include medical coverage, so a Travel Medical policy may fill in those gaps on coverage.
Cons
- No Cancellation Coverage: Travel Medical policies don’t offer Trip Cancellation or Trip Interruption coverage, which is an important benefit to many travelers.
- Less Options: While there are providers that strictly offer Travel Medical policies, there are still not as many policies available compared to Comprehensive Travel Insurance policies. This means that travelers may have limited plans to choose from when insuring their trip.
Annual
Annual policies are essentially Travel Medical policies that are designed to cover travelers for an entire year, regardless of how many trips they take. This is often cost-effective for frequent travelers that would otherwise purchase multiple single-trip policies.
Similar to Travel Medical policies, most Annual plans don’t include Trip Cancellation coverage but offer coverage for delays and lost luggage. Annual plans are recommended for:
- Frequent leisure or business travelers
- Travelers that prefer one policy for a year
Pros
- Convenience: Annual policies save the trouble of purchasing a policy each time you take a trip. Some travelers prefer the simplicity of one policy opposed to multiple single-trip policies.
- Cost-Effective: The average annual policy costs $420 in 2023. While this is more expensive than both Travel Medical, it does become cost effective for travelers taking more than four trips a year.
Cons
- Limited Cancellation Coverage: Most annual policies don’t offer Trip Cancellation or Trip Interruption coverage, which is an important benefit to many travelers.
- Less Options: Annual policies aren’t as common as other forms of insurance, which limits the amount of options travelers have.
- Cost: While the cost can also be a positive for frequent travelers, those that plan on taking four trips or less may benefit from purchasing multiple single-trip policies.
Other Types of Travel Insurance Policies
In addition to the policy types mentioned above, travel insurance providers may also build policies for specific trip types and travel situations. Below are a few additional policy types to consider as you prepare for your upcoming trip.
- Group Travel Insurance: Traveling with a large group? Group travel insurance can conveniently cover an parties of 10 or more travelers under one policy. They offer benefits that meet the most pressing traveler concerns, and are typically more cost-effective than purchasing multiple single-trip policies.
- Cruise Travel Insurance: Taking a cruise is a great way to visit multiple destinations in one trip, but also comes with its own risks. To meet the needs of cruisers, various providers offer policies that included benefits and coverage limits tailored their travel risks and concerns. This includes pre-departure cancellation coverage, generous evacuation benefits, and other valuable inclusions.
- Adventure Travel Insurance: Certain travel insurance providers offer policies built specifically for active travelers with action-packed itineraries. These policies typically cover potentially hazardous and dangerous activities usually excluded from most standard travel insurance plans. Adventure Travel Insurance policies also usually provide generous coverage for medical emergencies and sports equipment.
Compare Before You Buy
We recommend that all travelers considering travel insurance should take the time to find the policy that best fits their needs. Taking the time to compare policies, specifically their benefits and coverage limits, can make a big difference in the event your trip is disrupted.