What does travel insurance cover and should I buy it?

The worst bout of food poisoning I’ve ever gotten was on a late December trip to New York City. After a stroll in Central Park on New Year’s Eve, my boyfriend and I decided it would be a romantic idea to go eat at a questionable-looking sushi spot in Times Square, of all places. By the stroke of midnight, I was hunched over a toilet retching my spicy tuna in regret. I was sick for five whole days, and barely remember anything from that trip other than hotel beds, trash buckets, and my man asking, “Are you okay?” As a millennial with a hefty Sallie Mae bill, I never considered getting travel insurance for that trip — but if I did, I would’ve recouped some of the costs associated with my unforeseen illness. So I had to inquire, on all of our behalves, what does travel insurance cover and should we all be buying it when we travel?

What’s included when you buy travel insurance?

For those who never considered it an option, here’s a quick explanation for you: Travel insurance aims to cover you if you encounter certain unforeseen issues on a trip. “It allows you to file a claim for reimbursement for otherwise nonrefundable purchases, like flights, prepaid accommodations, cruise, tours, rail or rental cars,” says Cyrena Rockwell Dogan, an Alexandria, Virginia-based insurance sales associate. Just like car insurance covers (some of) that whopping bill when your car breaks down or has an accident, trip insurance helps you with the costs surrounding your sojourn in case something goes wrong — like bad sushi and subsequent marathon pukes.

I likely could have recouped the costs of an out-of-town urgent care visit if things had I gotten travel insurance. And, if I had decided to go home early, I could also have been reimbursed for the days I didn’t stay in my hotel room. Certain policies also allow for payment of travel costs associated with being sick, like having to fly home early. Travel insurance, in addition to covering sickness or injury costs can also cover nonrefundable reservations, lost or stolen baggage, car damage, and even helping finding a lawyer abroad.

How much does travel insurance cost, usually?

You might assume that travel insurance would be expensive, but there are some plans that cost less than $100, like Allianz Insurance, who offer partial coverage depending on the total cost of your trip. Also, certain credit cards include travel insurance that cover you in much the same way travel insurance does. Different credit cards have wildly different policies in that regard, so be sure to look at the fine print before you swipe that airfare to the vacation of your dreams.

I know some of those reading this put financial subjects like travel insurance in the same box as buying stock and vacation houses, assuming they are for a more financially liquid crowd, but that’s not always the case. Travel coverage might actually be a better plan for people with tighter budgets, as stressful and unexpected expenses like an out-of-country hospital stay during a trip could wipe out anyone’s savings. “Travel insurance can protect unforeseen circumstances such as job commitments or other unexpected changes in your life,” Rockwell states, adding that in this fast paced time, people are less likely to prepare themselves in case things go bad. For proof of this, just look at all of 2020. “If the insurance policy includes a wide range of covered reasons to cancel, getting insurance could protect you if your plans need to change,” she says.

What about cancellations, refunds and COVID-19?

Still, when it comes to travel insurance, whether or not to buy it depends a lot on what the cancellation or refund policy is. “If a hotel or flight is easily refundable with little notice for instance then insurance doesn’t make sense,” says Melissa Biggs Bradley, CEO and founder of Indagare, a travel experience company. “However if you are making a large advance deposit for something like a safari or yacht charter and the costs will become non refundable far in advance of the trip then I would always recommend trip insurance,” she says.

Due to the COVID-19 situation this year, many airlines have extremely lax cancellation policies, so for the time being, travellers can expect understanding when it comes to last minute changes. When it comes to travel insurance, however, things are way different. “There isn’t a blanket solution because some instances won’t be covered by insurance even if you have it. For example, global pandemics and closed borders have not been covered as many discovered the hard way this past spring,” Bradley continues, and suggests that the safest bet is to buy the typically more expensive Cancel For Any Reason insurance. CFAR insurance covers any reason you have for not taking a trip, including a fear of travel or a change of heart. “Unfortunately that type of policy has been harder to purchase recently,” she says. Gee, I wonder why!

So bottom line: It depends on the trip. Baltimore residents getting insurance to cover a weekend jaunt to Ocean City might be unnecessary, but flying to Iceland from the U.S. during this wild time we’re in might be a good idea. (And that’s not a joke — Americans can vacation in Iceland right now.) “The more expensive it is the more likely it is you should consider getting travel insurance,” Bradley continues. “It also requires understanding nuance — so read the fine print — but in many cases, it is a wise move.”