How Does Travel Insurance Work?

How Does Travel Insurance Work?

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Travel insurance works as a means of reimbursement to protect travelers if something goes wrong before or during their trip. Most policies are built to provide protection for unexpected events that cause financial losses for a traveler, including trip cancellations, medical emergencies, travel delays, or lost luggage.

Travel insurance is designed to cover unforeseen events, so you can only be covered if you buy your policy before an event impacts your trip. Once an event takes place, it can no longer be covered by a new policy.

How Does Travel Insurance Work? Finding the Right Policy

Travel insurance is available through many different mediums, including the traveler’s airline, cruise line, travel agent, or tour provider. These companies typically partner with one travel insurance provider to offer an “out-of-the-box” insurance policy for travelers, with pre-selected benefits and pricing.

Travelers who would rather research coverage options and pricing can compare policies from every major provider on a comparison site like

These are the steps for buying a policy on Squaremouth:

  1. Squaremouth’s search form asks you a series of questions to generate a list of all available policies for your trip. These questions include the age of each traveler, your travel dates, trip cost, and the country you are traveling to.
  2. After completing the search form, you will be shown a list of all policies available for your trip. Squaremouth recommends sorting policies from least to most expensive to help travelers find the best coverage for the lowest price. A higher premium does not mean a policy is better.
  3. Once you’ve selected the policy you think is best for your trip, check the policy certificate for any exclusions or coverage amounts you may be worried about. The certificate lists all of the policy’s benefits and coverage amounts, what is covered, and what is excluded.
  4. You can buy a policy online immediately, or anytime up until the day before you leave for your trip.
  5. Your policy will become effective at midnight the day after you purchase, and coverage will last through the end of your trip.

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.