What is travel insurance?

If you’re a seasoned traveler, you might have experienced a few of the things that can go wrong during a trip—from flight delays and cancellations to lost luggage and more. And if you’re a new traveler, thinking about possible problems can make planning a trip even more daunting. 

These kinds of travel troubles aren’t just inconvenient; they can also be costly. That’s where travel insurance could help.

But what is travel insurance? What does it cover? And how do you decide what kind of travel insurance is right for you?

Key takeaways

• Travel insurance policies offer coverage for a variety of travel-related issues, like flight cancellations, lost baggage and rental car damage.
• Different kinds of travel insurance plans offer different types and levels of coverage. 
• Policy costs can vary depending on the type of coverage, the policyholder’s age and other factors, but they generally cost about 4%-10% of the total cost of the trip.

Travel insurance is a service people buy to protect themselves and their money before or during a trip. It offers a financial safety net if anything—from a minor inconvenience to a major issue—goes wrong.

Some travel insurance plans focus on specific things, like rental cars or health care. Others cover a wider variety of travel-related issues. Coverage can vary depending on the type of travel insurance and the plan, but here are some things travel insurance might include: 

• Flight cancellations or delays
• Trip cancellations due to injury or illness 
• Damaged or lost luggage 
• Medical emergencies while traveling 

Here are some of the most common types of travel insurance:

Comprehensive travel insurance plans offer a wide range of benefits under a single plan. These plans might include protections for things like trip interruptions or cancellations, baggage loss and even some medical expenses.

Sometimes things happen last minute that you can’t control, even if you plan well ahead. That’s where these forms of travel insurance can come in:

• Trip cancellation insurance reimburses some prepaid travel costs if you have to cancel your trip for covered reasons, which may include canceled flights, a traveler’s injury or illness, unforeseen natural disasters or a non-traveling loved one’s hospitalization or death. 
• Trip delay insurance covers the expenses you can incur during a significant delay, like food and lodging.
• Trip interruption coverage can compensate you for financial losses if you need to end your trip early. It might also cover expenses for the journey home.
• Cancel for any reason (CFAR) coverage is usually an add-on to trip cancellation insurance. These policies might cost more, but they cover cancellations for any reason.

If you’re traveling outside the U.S., health insurance plans and programs like Medicare and Medicaid might not cover medical care. Travel health insurance plans are designed to bridge the gap, providing short-term coverage in case of an accident or illness or even emergency evacuation to a medical facility.

Accidental death and dismemberment coverage can provide benefits to you or your beneficiaries if you lose a body part or die while on a trip.

Rental car insurance can help protect you from paying for things like collision damage, towing, repairs, theft or other problems. Some credit cards offer rental car insurance.

Baggage loss insurance is used to reimburse you if your luggage is lost, stolen, damaged or delayed.

Some things typically won’t be covered by travel insurance, even under a comprehensive plan. It’s important to check the limitations, exclusions and fine print of each policy. According to the National Association of Insurance Commissioners, exclusions commonly include:

• Preexisting medical conditions
• High-risk activities like bungee jumping
• Pregnancy and childbirth
• Pandemics
• Civil and political unrest at the destination

If you decide you’d be a good candidate for travel insurance, you can compare policies and providers, benefits and prices. Make sure you find out what’s not included as well as what is. 

You can buy travel insurance through insurance companies and brokers, travel agents, travel reservation sites, airlines or cruise lines. Some travel credit cards might offer certain travel insurance protections, too, so it’s a good idea to check what your credit card covers.

When you’re ready, you’ll fill out an application. The provider decides whether to issue you a policy and how much to charge.

As with all insurance policies, the cost of travel insurance can vary depending on the type of plan, coverage and policyholder. 

That said, charges are generally based on a percentage of the total cost of the trip. That trip total might include expenses for flights, hotels, rental cars, prepaid excursions and more. Typically, travel insurance costs about 4%-10% of the total trip cost. But additional coverage can be more expensive. 

Many card benefits include credit card travel insurance. For example, some Capital One rewards credit cards offer benefits like travel accident insurance and lost luggage reimbursement.*  

Coverage varies by card, issuer and network, so you’ll want to check what yours includes before you set off on your trip.

Traveling can be exciting. But going on a trip can be a major investment of time and money. Travel insurance might help protect that investment. Plus, it can give you some peace of mind knowing that if certain things go wrong during your travels, you might not have to absorb the extra cost yourself. 

Before you decide to get separate travel insurance, you can see whether your credit card already has you covered or get pre-approved for a credit card that might have travel insurance.