Travel Insurance: What It Covers and When to Buy It (2024)

In the wake of Covid, travel insurance sales have spiked with the rebound in travel as people seek to protect their investments against flight delays and cancellations, extreme weather events and the persistence of the virus. But travel insurance is complicated with a range of benefits, inclusions and prices. Here’s what you need to know before you buy.

Know what’s covered

Generally speaking, travel insurance covers unforeseen events, like an illness in the family, the loss of a job or a natural disaster, that force you to cancel or interrupt a trip. It can also apply in the event of a strike at a transportation company, a terrorist attack in your destination or when your travel provider goes bankrupt. These are known as covered reasons. Most polices also include medical coverage, which is useful abroad where your health insurance may not cover you.

While policy prices vary based on age, length of travel and type of coverage, expect to pay between 4 to 10 percent of your entire trip cost to get insured.

Insure nonrefundable expenses

Travel insurance was designed to protect expenses you can’t get back any other way when things go wrong. Think of nonrefundable Airbnb reservations or the cost of a cruise to the Galápagos.

If your hotel is refundable and you can get the value of your flights back in credits, you can skip travel insurance.

Buy close to booking

Travel insurers say the best time to buy travel insurance — which usually takes effect within a day of purchase — is just after making your travel plans to have the largest possible coverage window. A lot can happen between booking a Christmas market cruise in Europe in June and going in December.