Trip Protection 101: How Does Travel Insurance Work?

If you’re planning an upcoming trip, travel insurance can be a worthwhile investment. Travel insurance allows you to recoup pre-paid travel expenses if your trip is cancelled or interrupted. Most plans also cover things like emergency medical expenses and lost luggage.

Here’s what you need to know about travel insurance, including how it works, what it covers, and how much it costs.

What is Travel Insurance?

Travel insurance provides financial protection for pre-paid and non-refundable travel costs, like flights and cruise tickets. If your trip gets cancelled or interrupted, travel insurance will reimburse you for the money you already spent, up to your policy’s limit.

People purchase travel insurance because it provides peace of mind. If something goes wrong before or during your trip, you can file an insurance claim and get reimbursed for your pre-paid expenses. Without travel insurance, those expenses would be lost.

What Does Travel Insurance Cover?

Travel insurance covers many of the most common issues that travelers can face. A standard travel insurance plan usually covers the following:

• Trip cancellations: If your trip gets cancelled because of a covered reason, like a named hurricane at your destination, your travel insurance will cover your pre-paid expenses under the Trip Cancellation benefit.
• Trip interruptions: Travel insurance will reimburse you for pre-paid travel costs if you have to interrupt a trip early due to a covered event, like the death of a family member.
• Emergency medical expenses: Travel insurance plans cover emergency medical expenses if you or a travel companion gets sick or injured on the trip.
• Emergency medical evacuation: If you need to be transported to a different hospital to receive adequate medical care, the Medical Evacuation benefit of travel insurance will cover the cost.
• Lost or damaged luggage: Standard travel insurance policies will reimburse you for the value of your belongings if your luggage gets lost, stolen, or damaged.
• Travel delays: Most travel insurance plans cover reasonable expenses if you experience travel delays, like an overnight hotel stay or restaurant meals in the airport.
• 24-hour emergency assistance: Travel insurance provides access to 24-hour emergency assistance if you need help with things like lost travel documents or finding the nearest medical facility.

What Doesn’t Standard Travel Insurance Cover?

Travel insurance policies don’t cover everything. These are some of the most common exclusions under a standard travel insurance plan:

• Cancellations For Any Reason: Travel insurance won’t reimburse your pre-paid expenses if you cancel your trip for any reason. For example, if you want to cancel a cruise because of rainy weather at the destination, it wouldn’t be covered. This is only covered if you add Cancel For Any Reason (CFAR) coverage to your plan.
• Interruptions For Any Reason: Your travel insurance policy won’t cover interruptions caused by any reason. For instance, if you decide to fly home from a trip early to attend a last-minute event, your policy wouldn’t reimburse your pre-paid expenses. This is only covered if you buy the Interruption For Any Reason benefit.
• High-risk activities: Travel insurance won’t cover your medical expenses or emergency medication evacuation if you get injured while participating in a high-risk activity, like skydiving, mountaineering, or rock climbing. If you’re planning on doing these types of activities, you should add sports and adventure coverage for more protection.
• Pre-existing medical conditions: Most travel insurance policies exclude coverage for pre-existing medical conditions. If you need medical care for a pre-existing condition while you’re traveling, your plan won’t cover the medical bills, unless you sign a pre-existing condition waiver.

How Do I Use My Travel Insurance?

If something unexpected happens before you leave for a trip or while traveling, you can file a claim with your insurance company to get reimbursed. While the exact process of filing a travel insurance claim depends on the insurer, here’s the general process you should follow:

• Contact your insurance company: Call your insurance company’s customer service or claims department to start a claim. Some insurers also allow you to file claims online.
• Gather your receipts: Collect the documentation you’ll need to submit the claim, like receipts from a hotel or an email from an airline confirming a flight cancellation.
• Complete claim forms: Fill out the necessary claim forms and include your receipts and other documents. Once you submit the claim, the insurer will review it.
• Get reimbursed: If your claim gets approved, you’ll receive reimbursement for the money you spent.

In case you need to file a claim, here are some best practices:

• Keep your receipts for flights, hotels, emergency medical visits, and excursions.
• Save official correspondence from airlines or cruise carriers for delays or cancellations.
• Understand your policy’s limits so you know how much is covered.
• File a police report for situations like accidents or stolen belongings.

How Much Does Travel Insurance Cost?

The average cost of comprehensive travel insurance in 2025 is $402, according to data from Squaremouth. You can expect your travel insurance premium to be roughly 4% to 10% of your total trip cost.

Medical travel insurance plans are much cheaper. In 2025, the average medical-only travel insurance policy costs $82. However, these policies don’t include coverage for things like cancellations and interruptions.

Tips for Choosing the Right Travel Insurance Policy

Every travel insurance policy is slightly different. The right plan for you depends on factors like your trip type and destination. Use these tips to select the best plan for your needs:

• Compare plans side-by-side: It’s a good idea to compare a few different travel insurance plans side-by-side. Consider the types of coverage and amounts of coverage available, and pick a plan that provides the best protection for the cost.
• Understand the exclusions: All travel insurance plans have some exclusions. Read the fine print of the policy to understand what’s not covered before you choose a plan. Many insurers offer add-ons that can fill the gaps if you need more coverage.
• Read online reviews: Reading travel insurance reviews can be helpful when researching the best travel insurance plans. You can use sites like TrustPilot and TripAdvisor to see what other travelers think about different insurance companies and their policies.

Conclusion

Travel insurance provides valuable financial protection in case something goes wrong before or during a trip. Standard travel insurance plans will reimburse you for unexpected events like trip cancellations, interruptions, lost baggage, and emergency medical expenses. To find the best travel insurance for your situation, it’s important to consider your coverage needs, compare multiple plans, and understand the exclusions.

Written by Elizabeth Rivelli