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What Is Travel Insurance?

Understanding travel insurance, how travel insurance works, comprehensive travel insurance.

• Trip Cancellation or Interruption

Damage and Baggage Losses Coverage

Rental insurance, travel health insurance.

• AD&D Coverage

Other Travel Insurance Coverage

How to get travel insurance, the bottom line.

• Personal Finance

What Is Travel Insurance, and What Does It Cover?

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

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Travel insurance is a type of insurance covering financial losses associated with traveling, and it can be useful protection for domestic or international travel. Whether you missed your flight to Florida, lost your bags in Berlin, or broke your ankle in Ankara, the best travel insurance companies can help remedy all kinds of travel mishap costs.

Key Takeaways

• Travel insurance can be purchased online, from your tour operator, or from other sources.
• The main categories of travel insurance include trip cancellation or interruption coverage, baggage and personal effects coverage, rental property and rental car coverage, medical coverage, and accidental death coverage.
• Coverage often includes 24/7 emergency services, such as replacing lost passports, cash wire assistance, and rebooking canceled flights. 
• It's important to understand what's covered and what's not, and any limitations on coverage amounts and coverage requirements.

Travel insurance helps cover financial losses associated with surprise circumstances that could ruin a trip, including illness, injury, accidents, flight or other transportation delays, and other issues. This insurance costs 4% to 10% of a trip's price. So, for a $10,000 trip, trip insurance could cost between $400 and $1,000.

Premiums—or the price you pay for coverage—are based on the coverage type, your age, destination, trip cost, and more. Specialized policy riders focus on the needs of business travelers, athletes, and expatriates .

You may already have travel insurance coverage from your homeowners or renters insurance or your credit cards. Call your insurance agent to find out about your current travel coverage, and your credit card company to find out about any benefits you get when you purchase air or train tickets, rent a car, or book a hotel using the card. Many travel rewards cards come with built-in travel insurance and other travel benefits.

Travel insurance may be sold online by travel agents, travel suppliers (airlines, cruise lines), private insurance companies, or insurance brokers when booking your flight, accommodations, or car.  Travel insurance companies include AIG Travel, Berkshire Hathaway Travel Protection, Generali Global Assistance, GeoBlue, Nationwide, and more.

Typically, you'll purchase coverage shortly after initial bookings for lodging, flights, or other transportation, activities, and rental cars. Some policies may require you to do so to retain full coverage. Here are some terms to know for travel insurance.

Primary and Secondary Coverage

If you buy travel insurance, you may have concurrent insurance coverage , meaning you're covered under more than one policy. When the travel coverage is primary, the travel insurance reimburses you first without needing to make a claim through another company—and sparing you potentially increased policy rates.

If the travel insurance coverage is secondary, you'll first need to attempt to file a claim with other coverage, such as an airline (lost baggage) or your own auto insurance (damaged car).

Coverage Requirements

There are usually stipulations spelled out on how you qualify for coverage. Your claim must fall under the types of coverage offered. For example, lost baggage insurance might include coverage for personal items, prescriptions, credit cards, and your passport or visa. You may also need to take extra steps to qualify for coverage, such as reporting the loss or theft to the police.

Policy Coverage Limits

This is the maximum amount you can receive for the claim. For example, you might only receive $500 per bag. You may not even receive more for expensive items such as jewelry or electronic devices. You might need to provide receipts for items over a certain amount. Without receipts, the insurer may only pay for repairs.

Some coverage might require you to pay a deductible, or flat amount, before covering the remainder of your claim up to the limit.

These are the conditions under which your coverage will not cover the loss. Each policy differs. For example, your baggage damage coverage may not cover losses caused by animals. It may exclude coverage of bicycles, hearing aids or other medical devices, keys, and tickets, or seizure by a government or customs official.

Pre-existing conditions may not be covered by travel medical insurance, or may only be covered if you buy a travel insurance plan within one to two weeks of booking your trip.

Comprehensive travel insurance includes many types of coverage listed below, bundled into one plan. Most commonly, comprehensive travel insurance bundles a 24-hour assistance line to help find doctors or get assistance in an emergency, reimburse you for trip cancellation , interruption and delay, baggage loss or delay, and medical expense and medical evacuation coverage.

Alternatively, you can purchase each coverage type separately. This may be wise if you already have coverage through other insurance or can cover your losses in many cases.

Trip Cancellation or Interruption Coverage

This insurance reimburses a traveler for some or all prepaid, nonrefundable travel expenses, and comes in the following forms:

• Trip cancellation : Reimburses you for paid travel expenses if you can't travel for a preapproved reason.
• Travel delay : Reimburses you for expenses if you can't travel because of a delay.
• Trip interruption : Reimburses you for travel costs if your trip is cut short.
• Cancel for any reason (CFAR) : Reimburses you for a portion of costs if you cancel the trip for any reason; typically more expensive than the other types listed above.

With most of the above, acceptable cancellation and interruption causes and reimbursement amounts vary by provider. Acceptable reasons for a claim might include the following:  

• Your illness
• Illness or death in your immediate family
• Sudden business conflicts
• Weather-related issues
• Legal obligations such as jury duty

You may need to pay more or meet more requirements to file a claim for a cancellation due to financial default, terrorism in your destination city, or work reasons.

When traveling, register your travel plans with the State Department through its free  travel registration website , the Smart Traveler Enrollment Program (STEP). The nearest embassy or consulate can contact you if there is a family, state, or national emergency.

Baggage and personal belongings being lost, stolen, or damaged is a frequent travel problem—and can quickly ruin a trip as you must shop for replacements. Baggage and personal effects coverage protects lost, stolen, or damaged belongings during travel to, in, and from a destination.

However, many travel insurance policies pay for belongings only after you exhaust all other available claims. Baggage coverage may have many restrictions and exclusions, such as only covering up to $500 per item and $250 for each additional item. You may be able to increase or decrease amounts, shop around for coverage, or increase limits by paying more.

For example, the insurance may not pay for lost and damaged luggage due to airline fault. Most carriers, such as airlines, reimburse travelers if baggage is lost or destroyed due to the airline's error. However, there may be limitations on reimbursement amounts, so baggage and personal effects coverage provide an additional layer of protection.

Vacation rental insurance covers costs from accidental damage to a vacation rental property. Some plans also offer trip cancellation and interruption to help reimburse costs when you can't use your vacation rental. Some of these reasons could include the following:

• Lost or stolen keys
• Unsanitary or unsafe vacation property
• Vacation rental wasn't as advertised
• The company oversold your vacation rental

Rental car insurance covers a rental car's damage or loss while on a trip, taking the place of the rental agency's collision damage waiver (CDW) or your regular car insurance policy. Policies vary and may cover collisions, theft, vandalism, and other incidents. Rental car insurance may be a secondary policy to your own car insurance. However, it doesn't cover your liability or legal responsibility for damage or injury you cause to others.

Medical coverage can help with unexpected international medical and dental expenses, and help with locating doctors and healthcare facilities abroad. As with other policies, coverage will vary by price and provider.

• Foreign travel medical coverage : These policies range from five days to one year or longer, and cover costs arising from illness and injuries while traveling.
• Medical evacuation: May cover airlift travel to a medical facility and medical evacuation to receive care.

Consult with your current medical insurers before purchasing a policy to determine whether a policy extends its coverage outside the country. Most health insurance companies pay “customary and reasonable” hospital costs if you become sick or injured while traveling, but few will pay for a medical evacuation.

The U.S. government doesn't insure citizens or pay for medical expenses abroad . Before purchasing a policy, read the provisions to see what exclusions, such as preexisting medical conditions, apply. Don't assume that the new coverage mirrors that of your existing plan. Routine medical care is typically excluded unless you buy a long-term medical plan intended for expatriates, missionaries, maritime crew members, or others abroad for extended periods.

Medicare or Medicaid generally don't cover medical costs overseas unless you have specific Medicare Advantage or Medigap plans covering emergency overseas care.

Accidental Death and Dismembership (AD&D) Coverage

If an accident results in death or serious injury, an AD&D policy pays a lump sum to surviving beneficiaries or you for an injury. The insurance usually offers three parts, providing coverage for accidents and fatalities:

• Flight accident insurance: Occurring during flights on a licensed commercial airliner. 
• Common carrier: Resulting from public transportation such as train, ferry, or bus travel.
• General travel: Occurring at any point during a trip.

Exclusions that may apply include death caused by drug overdose or sickness. In addition, only some injuries may be covered, specifically hand, foot, limb, or eyesight. There are stated amount limits per injury.

Accidental death coverage may not be necessary if you already have a  life insurance  policy. However, benefits paid by your travel insurance coverage may be in addition to those paid by your life insurance policy, leaving more money to your beneficiaries. 

Depending on your plan or package selected, you may be able to add the following travel insurance types:

• Identity theft resolution services
• School activity coverage
• Destination wedding coverage
• Adventure sports coverage
• Pet health as a reason for cancellation or delay
• Hunting or fishing activities as a reason for cancellation or delay
• Missed flight connections

Travel insurance varies in cost, exclusions, and coverage. Coverage is available for single, multiple, and yearly trips. To get travel insurance, you fill out an insurance company's application about your trip, including the following:

• Travelers going
• Destination
• Travel dates
• Date of first payment toward your trip

The insurance company reviews the information using underwriting guidelines to guide issuing a policy and the rate. If it accepts your application, the company will issue a policy covering your trip. If the company rejects your application, you can apply with another insurer.

When you receive your policy, you'll typically get a 10- to 15-day review period to review the contract's fine details. If you don't like the policy, you can return it for a refund. Read through the document and ensure the plan you purchased doesn't apply too many loopholes, and that it covers:

• Emergency medical care and transport back to the U.S.
• High enough limits to cover your costs or damages
• Regions you're traveling to
• Your trip duration or number of trips
• All activities you plan to enjoy
• Preexisting conditions and people of your age

Also, read through for any exclusions. For example, types of property covered, and whether property lost or damaged by the airline is covered, and how.

Do I Need Travel Insurance?

You might consider travel insurance if you can't afford to cancel and then rebook an expensive or long trip. You might also consider travel health insurance if your health insurance doesn't cover international costs. An alternative is to book an easily cancellable vacation—look for a pay-later hotel room and car rental options, flexible cancellation terms, and the ability to rebook without a fee.

What Is Not Covered by Travel Insurance?

Review the travel insurance policy to discover exclusions. According to NAIC, common travel policy exclusions are:

• A traveler's pre-existing health conditions
• Civil and political unrest at the traveler's destination
• Pregnancy and childbirth
• Coverage for those engaging in adventure or dangerous activities.

Pandemics may also be excluded from coverage.

How Can I Get Cheap Travel Insurance?

Your  homeowners  or renters insurance may provide some protection for personal belongings, and airlines and cruise lines are responsible for loss and damage to your baggage during transport. Also, credit cards may provide automatic protection for things like delays and luggage or rental car accidents if used for deposits or other trip-related expenses.

The main types of travel insurance include trip cancellation or interruption coverage, baggage and personal effects coverage, medical expense coverage, and accidental death or flight accident coverage. Before buying a policy, check to see if you already have coverage through your own health or car insurance or a credit card.

Mass.gov. " Travel Insurance. "

Minnesota Department of Commerce. " Travel Insurance ."

U.S. Travel Insurance Association. " Frequently Asked Questions ."

Texas Department of Insurance. " Should You Get Travel Insurance? "

National Association of Insurance Commissioners. “ Taking a Trip? Information about Travel Insurance You Should Know Before You Hit the Road .”

U.S. Department of State. “ Your Health Abroad. ”

Medicare.gov. " Medicare Coverage Outside the United States ." Page 4.

Medicare.gov. " Medigap & Travel. "

NAIC. " Travel Insurance ."

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Travel Insurance 101: How Travel Insurance Works

What is travel insurance?

Travel insurance is a plan you purchase that protects you from certain financial risks and losses that can occur while traveling. These losses can be minor, like a delayed suitcase, or significant, like a last-minute trip cancellation or a medical emergency overseas.

In addition to financial protection, the other huge benefit of travel insurance is access to assistance services , wherever you are in the world. Our elite team of travel and medical experts can arrange medical treatment in an emergency, monitor your care, serve as interpreters, help you replace lost passports and so much more. Sometimes, they even save travelers’ lives.

A few things you should know about travel insurance:

• Benefits vary by plan. It’s important to choose a plan that fits your needs, your budget and your travel plans. Here are definitions of all available travel insurance benefits.
• Travel insurance can’t cover every possible situation. Allianz Travel Insurance is  named perils  travel insurance, which means it covers only the specific situations, events, and losses included in your plan documents, and only under the conditions we describe.
• Travel insurance is designed to cover  unforeseeable events —not things you could easily see coming, or things within your control. If, for example,  you wait to buy insurance for your beach trip until after a named hurricane is hustling toward your destination, your losses wouldn’t be covered.

How does travel insurance work?

In most scenarios, travel insurance reimburses you for your covered financial losses after you file a claim and the claim is approved. Filing a claim means submitting proof of your loss to Allianz Global Assistance, so that we can verify what happened and reimburse you for your covered losses. You can  file a claim online , or do it on your phone with the  Allyz ® TravelSmart app .

How does this work in real life? Let’s say you purchase the OneTrip Prime Plan , which includes trip cancellation benefits, to protect your upcoming cruise to Cozumel. Two days before departure, you experience a high fever and chest pain. Your doctor diagnoses bacterial pneumonia and advises you to cancel the trip. When you notify the cruise line, they tell you it’s too late to receive a refund.

Without travel insurance, you’d lose the money you spent on your vacation. Fortunately, a serious, disabling illness can be considered a covered reason for trip cancellation , which means you can be reimbursed for your prepaid, nonrefundable trip costs. Once you’re feeling better, you gather the required documents—such as your airfare and cruise line receipts and information about any refunds you did or did not receive—and you file a claim . You can even choose to receive your reimbursement by direct deposit, to your debit card, or via check.

Sometimes, this process works a little differently. Travel insurance may pay your expenses upfront if you require emergency medical treatment or emergency transportation while traveling overseas. Or, with the  OneTrip Premier and OneTrip Prime plans, you may be eligible to receive a fixed payment of $100 per day for a covered travel delay or $100 for a covered baggage delay . No receipts for purchases are required; all you need is proof of your covered delay.

Many travelers are wondering: Can COVID-19 be considered a covered reason for trip cancellation? And can travel insurance help if you become seriously ill with COVID-19 while traveling? Most of our travel insurance plans now include epidemic-related covered reasons (benefits vary by plan and are not available in all jurisdictions). The Epidemic Coverage Endorsement adds covered reasons to select benefits for certain losses related to COVID-19 and any future epidemic. To see if your plan includes this endorsement and what it covers, please look for "Epidemic Coverage Endorsement" on your Declarations of Coverage or Letter of Confirmation. Terms, conditions and exclusions apply. Benefits may not cover the full cost of your loss. All benefits are subject to maximum limits of liability, which may in some cases be subject to sublimits and daily maximums.

> Learn more: Travel Insurance and COVID-19: The Epidemic Coverage Endorsement Explained

How to choose a travel insurance plan

There’s a wide range of Allianz Travel Insurance plans, each with different benefits and benefit limits. So how do you know which is best for you? To begin, get a quote for your upcoming trip. When you enter your age, trip costs and trip dates, we can recommend a few plans for you. Then, you can compare the costs and benefits of each.

If you’re a budget-conscious traveler who’s traveling in the U.S., you may like the OneTrip Cancellation Plus Plan . It includes trip cancellation, trip interruption and trip delay benefits.

If you want protection in case of medical emergencies overseas, but you have few pre-paid trip expenses, you may consider the OneTrip Emergency Medical Plan . This affordable plan includes emergency medical and emergency transportation benefits, as well as other post-departure benefits, but not trip cancellation/interruption.

If you want the reassurance of carrying substantial travel insurance benefits, the best fit may be the OneTrip Prime Plan . This plan also covers kids 17 and under for free when traveling with a parent or grandparent (not available on policies issued to Pennsylvania residents).

If you’re planning several trips in the next 12 months, consider annual travel insurance such as the AllTrips Prime Plan . It gives you affordable protection for a full year of travel, including benefits for trip cancellation and interruption; emergency medical care; lost/stolen or delayed baggage; and Rental Car Damage and theft protection (available to residents of most states).  

> Find the right travel insurance plan for you 

How to get the most from your travel insurance plan

Don’t wait too long to buy travel insurance! The best time to buy travel insurance is immediately after you’ve completed your travel arrangements. The earlier you buy insurance, the bigger your coverage window. Also, you must buy your plan within 14 days of making your initial trip deposit in order to be eligible for the pre-existing medical condition benefit (not available on all plans).

Read your plan documents before you leave. If you're not completely satisfied with your plan, you have 15 days (or more, depending on your state of residence) to request a refund, provided you haven't started your trip or initiated a claim. Premiums are non-refundable after this period.

Call us when you need help. If you have questions about how travel insurance works, or how to file a claim, or which benefits you need, please contact us ! Our representatives are available 24/7. If you’re already traveling, and you’re facing a travel crisis or just need some advice, call our emergency assistance hotline .

> Read more about how we can help

Related Articles

• What Does Travel Insurance Cover?
• How Travel Insurance Covers Family Members
• Trip Delay, Trip Interruption and Trip Cancellation Insurance Explained

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Insurance benefits underwritten by BCS Insurance Company (OH, Administrative Office: 2 Mid America Plaza, Suite 200, Oakbrook Terrace, IL 60181), rated “A” (Excellent) by A.M. Best Co., under BCS Form No. 52.201 series or 52.401 series, or Jefferson Insurance Company (NY, Administrative Office: 9950 Mayland Drive, Richmond, VA 23233), rated “A+” (Superior) by A.M. Best Co., under Jefferson Form No. 101-C series or 101-P series, depending on your state of residence and plan chosen. A+ (Superior) and A (Excellent) are the 2nd and 3rd highest, respectively, of A.M. Best's 13 Financial Strength Ratings. Plans only available to U.S. residents and may not be available in all jurisdictions. Allianz Global Assistance and Allianz Travel Insurance are marks of AGA Service Company dba Allianz Global Assistance or its affiliates. Allianz Travel Insurance products are distributed by Allianz Global Assistance, the licensed producer and administrator of these plans and an affiliate of Jefferson Insurance Company. The insured shall not receive any special benefit or advantage due to the affiliation between AGA Service Company and Jefferson Insurance Company. Plans include insurance benefits and assistance services. Any Non-Insurance Assistance services purchased are provided through AGA Service Company. Except as expressly provided under your plan, you are responsible for charges you incur from third parties. Contact AGA Service Company at  800-284-8300 or 9950 Mayland Drive, Richmond, VA 23233 or [email protected] .

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What Is Travel Insurance?

Trip Insurance Explained

Lorraine Roberte is an insurance writer for The Balance. As a personal finance writer, her expertise includes money management and insurance-related topics. She has written hundreds of reviews of insurance products.

Meredith Mangan is a senior editor for The Balance, focusing on insurance product reviews. She brings to the job 15 years of experience in finance, media, and financial markets. Prior to her editing career, Meredith was a licensed financial advisor and a licensed insurance agent in accident and health, variable, and life contracts. Meredith also spent five years as the managing editor for Money Crashers.

Definition and Examples of Travel Insurance

How travel insurance works, what does travel insurance cover.

• The Best Time To Buy Travel Insurance

How Much Does Travel Insurance Cost?

Alternatives to travel insurance, do i need travel insurance.

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Travel insurance guards against certain travel-related financial losses resulting from circumstances such as trip cancellations or delays, lost luggage, and even medical expenses while traveling.

Travel insurance is a popular type of policy that reimburses you for travel-associated expenses due to unforeseen events such as canceled flights, tours, cruises, and theme-park bookings. It can also cover medical emergencies and delayed suitcases .

Travel insurance policies typically have named-perils coverage, meaning they cover only specific instances and losses under certain conditions named in the policy.

• Alternate name : Trip insurance

Typically, your plan provider reimburses you for a covered financial loss after a claim approval. That means you usually pay for expenses out of pocket first, then receive your money back later.

Say you purchase travel insurance for your family vacation to the Bahamas in August. Three days after you arrive, a hurricane hits the island. Everyone is okay, but everything shuts down on the island while you’re there because of widespread flooding and power outages. Travel insurance covering trip interruption can reimburse you for nonrefundable prepaid expenses you weren’t able to use, and change fees to move up your flight.

You can purchase a plan through insurers, travel agents, travel insurance providers, travel suppliers, and internet aggregators.

In prior years, there weren’t industry standards for travel insurance policies. But in 2016, concerns were raised about the lack of regulation. As a result, a travel insurance working group was appointed to address this. Two years later, the National Association of Insurance Commissioners (NAIC) adopted a model law, which covers market regulation, rate regulation, and enforcement.

Travel insurance typically bundles three types of coverage: trip cancellation, interruption, and delays; medical insurance and evacuation coverage; and 24-hour assistance in case of emergency.

Trip Cancellation, Interruptions, and Delays

• Illness, injury, or death
• Uninhabitability of your destination from flooding, fire, and other natural disasters
• Work-related reasons, such as involuntary job loss
• Acts of terrorism
• Other reasons like jury duty, extended school year due to weather, and more

Baggage Loss, Delays, and Personal Effects

• Lost, stolen, or damaged bags up to your plan limits, such as 75% of actual cash value
• Cost of personal items due to delayed baggage

Travel Medical Insurance

• Injury and illness medical expenses while traveling
• May act as primary or secondary insurance, depending on the policy

Primary insurance means that you don’t need to use your own medical insurance for covered losses. Secondary means it will only cover medical expenses that your health insurance plan doesn’t cover.

Medical Evacuation Insurance

• Medical evacuation to the nearest hospital

Cancel for Any Reason (CFAR)

• Coverage for trip cancellations for any reason, up to a specified time frame
• May give partial refund of 50% to 75% of total price

Assistance Services

• Help arranging medical treatment in an emergency
• Monitoring your care
• Help replacing lost passports
• Interpretation services
• Help arranging accommodations in an emergency

Travel insurance may not offer coverage for:

• Preexisting health conditions
• Civil and political unrest at the destination
• Extreme sports such as snowboarding and bungee jumping
• Pregnancy and childbirth
• Fear of traveling to countries
• Medical travel

Each type of travel protection provided under a travel insurance policy has its coverage limitations and exclusions. Read your policy’s terms carefully to ensure you have the kind of coverage and amounts you think you do. Also, search for any conditions of coverage, such as needing to obtain approval before receiving medical care. 

When Is the Best Time to Buy Travel Insurance?

Many plans allow you to purchase coverage up until the day before you leave. But like other insurance, travel insurance is designed to protect against unforeseeable circumstances. So the best time to buy it is before you need it.

You don’t have to purchase travel insurance as soon as you book your cruise, but if you wait to buy it until a named hurricane starts heading toward your destination, any related losses wouldn’t be covered.

Some travel insurance providers may also provide bonus coverage if you buy within a certain window, such as within 15 days of making your first trip deposit.

Travel insurance may cost between 4% and 10% of your total trip cost. Factors influencing your price include:

• Total trip spending
• Coverage amounts
• Coverage add-ons
• Number of people covered
• Your destination location
• Number of days traveling

Discounts aren’t allowed with travel insurance. Providers must file rates with each state, and they cannot offer discounts off the filed pricing.

Before purchasing travel insurance, check to see if you already have it through other means. Some credit cards include a travel protection benefit when you make travel purchases on the card. Your card may cover trip cancellation, medical coverage, and baggage and personal-effects loss. It can also offer things like rental car damage coverage and death benefits .

Another place to look is your home or renters insurance, which can provide coverage if your personal belongings are lost or stolen while traveling. Depending on your policy, you may receive the item’s actual cash value or replacement cost value, up to your policy’s limits. Some common items, such as sunglasses, may be excluded.

Even if you have coverage for your personal effects under your home or renters insurance, it’s not always worth filing a claim because your deductible may be close to or above the value of what was lost. Your home insurance could even be canceled if you make more than two claims within five years.

Trip insurance can be a good investment if you can’t afford the costs of the following:

• Losing your prepaid vacation expenses due to unforeseen events
• A return flight home if you need to shorten your trip because of an emergency
• Medical expenses while away from home if your health insurance plan doesn’t cover foreign emergency care
• Lost or delayed baggage and canceled or delayed flights, such as an extra night at a hotel or replacing clothes and personal hygiene items

Consider that you may already have many of the major protections offered by travel insurance through a credit card. Decide whether that’s enough coverage for you or whether supplementing with travel insurance gives you greater peace of mind.

The U.S. Department of State urges consumers to consider their medical insurance options before traveling abroad, such as travel health insurance and medical evacuation insurance. U.S. citizens overseas aren’t provided medical insurance by the U.S. government. Your current health insurance provider may not extend coverage overseas either.

Key Takeaways

• Travel insurance is usually a comprehensive policy that bundles three types of coverage: trip cancellation, interruption, and delays; medical insurance and evacuation coverage; and 24-hour assistance in case of emergency.
• You may already have a credit card providing many of the same protections covered by travel insurance. Your homeowners' or renters' insurance may also protect your personal belongings.
• Travel insurance is best for people who don’t already have travel protections through other means. It’s also a good option for those who can’t afford the travel-related financial losses arising from unforeseen events.

U.S. Travel Insurance Association. " Frequently Asked Questions ."

National Association of Insurance Commissioners. " Travel Insurance ." See "Status."

U.S. Travel Insurance Association. " Frequently Asked Questions ." See "What Will It Cost?"

Berkshire Hathaway Travel Protection. " What Is Travel Insurance All About? " Pages 15-18.

Ohio Department of Insurance. " Guide to Homeowners Insurance ." Page 12.

U.S. Department of State. " Insurance Providers for Overseas Coverage ."

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What is Travel Insurance and How Does it Work?

Most people have some experience with car, home or health insurance, but not everyone is familiar with travel insurance and how it works. With interest in travel insurance at an all time high after the COVID pandemic, we thought it would be a good idea to explain what it really is.

To help you understand and educate yourself, we’ve answered common questions that people who are new to travel insurance often ask, like “ what is travel insurance? ,” “ what does travel insurance cover? ” and “ how does travel insurance work? ” 

What is Travel Insurance: The Basics

We’ve all heard about canceled flights and lost baggage, but most of us don’t automatically think “do we have insurance and are we covered?” Travel insurance helps protect you from certain kinds of unexpected events that can occur before or during your trip.

Unlike auto insurance, travel insurance is elective, which means it’s up to you to decide if you want it. Ultimately, it’s meant to help you travel with more peace of mind so you can worry less and focus on having a great trip.

Learn more about travel insurance: •  How Much Does Travel Insurance Cost? •  Top 5 Reasons to Get Travel Insurance •  Travel Insurance Comparison: How to Choose the Right Plan

What does travel insurance cover?

The coverage that most people are aware of is  trip cancellation , which provides reimbursement for unused, non-refundable, prepaid trip costs if you need to cancel your trip for a  covered reason , such as sickness, job loss,  flight cancellations  due to adverse weather and more. Similarly, with  coverage for trip interruption  you can recoup trip costs if you can’t continue your trip due to a covered event, and our plans provide reimbursement for additional transportation costs to return home or rejoin your group.

See our full list of travel insurance coverage details and covered reasons

Travel insurance can also include lesser known elements including travel delay, lost, damaged and delayed baggage, medical and emergency evacuation coverage. Different providers offer different plans with a mix of these coverages and more, so be sure to  educate yourself about all the options  before choosing one. One way to tackle this is to determine your specific needs and  find a plan that fits . Don’t be afraid to  ask  your travel insurance provider if you have questions.

Let’s use an example. If you are taking your family on vacation to Paris, then you would probably want a plan that included coverage for trip cancellation and  post-departure coverages  during your trip. These may include Baggage, Travel Delay, Medical and Dental, and Emergency Assistance and Transportation.

Generali Global Assistance offers a  variety of plans  and add-on coverages that will help protect your trip, whether it’s a weekend vacation rental stay or a month-long trek across Europe. Additionally, our  24-Hour Emergency Services, Concierge and ID Theft Resolution services  are included with our plans. These services round out the travel protection plans, so not only can you be reimbursed for certain costs if something goes wrong with your trip, but you can get assistance in real-time when you need it on your trip.

Read more about what travel insurance covers  and what it doesn't cover

How does travel insurance work?

The process for filing a travel insurance claim is similar to car or home insurance. If you get in a car accident or have a water leak in your bathroom, you file a claim.

If something happens during your trip and you need to use your travel insurance, you’ll need to file a claim to be reimbursed. We have a page that explains how to start a claim , a great resource for learning more about the claims process.

Let’s say your baggage is delayed and you need to buy clothes and toiletries, you would submit a claim to seek reimbursement. Travel insurance comes in handy in scenarios like this.

When you’re ready to buy a plan, you can purchase directly from the travel insurance company online . Oftentimes, travel insurance is offered when buying a cruise, airfare or booking a vacation rental . We encourage customers to pay attention to the fine print. For example, a cruise line’s travel insurance may not pay cash to cover a cancelled or interrupted cruise, but instead, offer credit towards a future cruise. If you prefer cash reimbursement, that’s reason to consider purchasing direct from a travel insurance provider instead. Also consider the type of trip you are taking. If you are taking a cruise, then you may want a plan that includes Missed Connection coverage, as our plans do.

Also read:  Why Travel Insurance is Crucial for Cruise Trips

Be sure to bring a print out of your plan documents with you. If you are affected by a storm and can’t get internet or lose power, you still know what number to call and what instructions to follow. 

  Learn more about: How does travel insurance work?

When to buy travel insurance

As with all things in life, timing is everything, especially when it comes to deciding when to buy travel insurance . Travel insurance is designed to protect you against unforeseen events, which means it is meant to be bought before an event occurs. For example, you would not want to buy travel insurance after you decided to cancel a trip, for the same reason that you can’t buy car insurance to cover an accident that has already occurred.

It’s best to buy your plan when you book your trip so you are eligible for coverages that apply prior to departure. For example, if you break your leg and need to postpone hiking in the Alps, then you could be covered. 

Get the right travel protection plan for you

Should you buy travel insurance?

Now that we’ve covered the basics, we can tackle the big question. Should you buy travel insurance? There are a few major factors to consider before determining if travel insurance is right for you: cost, destination and who is traveling.

If you can’t afford to lose the amount you’ve invested in your trip, then you should probably consider travel insurance. If you’re traveling far , maybe around the world, or to a remote area where the nearest hospital is many miles away, then a travel protection plan could help save the day. It’s impossible to know what might happen to you or a traveling companion that could throw a wrench in your travel plans, especially if travelers include children or the elderly , who might be more vulnerable, travel insurance may help you rest easier before and during your trip. 

Also read:  Do You Really Need Travel Insurance?

Travel Insurance Questions Answered

What is travel insurance?

• Is Travel Insurance Worth It? 3 Examples Where it Pays Off
• Guide to Understand, Purchase and Use Trip Insurance
• How Travel Insurance Can Help When You Fly
• See detailed answers to your travel insurance coverage questions
• Are You Protected? How Travel Insurance Can Help During Your Trip
• Travel insurance in the USA: Why insure your trip even if you're not leaving the country
• Does Travel Insurance Cover the Flu or Other Illness?
• Travel Insurance Comparison: How to Choose the Right Plan
• When to Buy Travel Insurance: Timing is Everything
• How Travel Insurance Covers You and Your Belongings While Away

Travel Resources

1.   U.S. Travel Insurance Association

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• Travel Advice
• General Information

What is Travel Insurance?

Last Updated: February 14, 2019 September 27, 2023

Travel insurance is designed to provide financial protection for unexpected events that impact a traveler’s trip. Popular benefits on a travel insurance policy include coverage for trip cancellations, medical emergencies, travel delays, and luggage. There are three different types of travel insurance policies: single trip, annual, and group.

Single Trip Travel Insurance Policies

Single trip travel insurance covers travelers for one trip, starting when they leave home and ending when they return. A single trip policy can cover up to 10 travelers on international or domestic trips.

Travelers who are concerned about having to cancel their trip should consider a single trip policy with Trip Cancellation coverage. This benefit reimburses insured trip expenses if a traveler is unable to travel for one of the policy’s covered reasons. Travelers must insure all or some of their trip cost to be eligible for this benefit. Single trip policies with Trip Cancellation are the most common type of travel insurance policy purchased.

Most cancellation-style policies are comprehensive, covering travelers for their trip payments, medical emergencies, travel delays, and luggage. This type of single trip policy typically costs between 4% and 10% of a traveler’s trip cost, depending on their age, the length of their trip, and their total trip cost.

Travelers who are not concerned about cancelling do not need to insure a trip cost, and can buy a single trip, non-cancellation style policy to cover medical emergencies, travel delays, and luggage. Because there is no insured trip cost, these policies are typically less expensive. However, except for Trip Cancellation coverage, the benefits included are usually the same.

Annual Travel Insurance Policies

Annual travel insurance policies are designed to cover travelers taking multiple short trips throughout a year. Travelers select a specific start date for an annual policy, which can be the departure date for their first trip. An annual policy will last one year from that date.

Annual policies typically limit how long one trip can last, and may have limits for how many trips can be taken throughout the year. The Maximum Trip Length ranges from 30-365 days, depending on the policy.

The coverage offered on an annual policy usually differs from a single trip policy. Most annual policies are primarily designed to provide medical coverage, offering  Emergency Medical and Medical Evacuation benefits. These policies typically do not include Trip Cancellation coverage.

Group Travel Insurance Policies

While a single trip policy can cover up to 10 travelers, group travel insurance allows parties of 10 or more travelers to purchase one policy for their trip. Group policies offer benefits similar to single trip policies, including coverage for cancellations, medical emergencies, travel delays, and luggage.

Purchasing a group travel insurance policy can be a more convenient and affordable option for organized groups traveling together. The premium of a group policy does not take the travelers’ ages into account. Therefore, because age is one of the main factors that determines a policy’s premium – along with trip cost and trip length – group policies can be significantly less expensive per traveler.

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What Is Travel Insurance and What Does It Cover?

By understanding what travel insurance is and what it covers, you can decide whether to buy it for your upcoming trips.

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Sarah Horvath is one of the home service industry’s most accomplished writers. Her specialties include writing about home warranties, insurance, home improvement and household finances. You can find her writing published through distributors like HouseMethod, Architectural Digest, Good Housekeeping and more. When not writing, she enjoys spending time in her home in Orlando with her fiance and parrot.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Travel insurance is a type of financial protection you can buy to reimburse a portion of prepaid, nonrefundable expenses if your trip gets interrupted or canceled. Travel insurance may cover medical bills incurred abroad, lost baggage, lost airline fare and more.

Read on to learn more about travel insurance and what it covers, and explore a few of our top-rated providers .

What Is Travel Insurance?

Travel insurance is a type of insurance coverage that protects you from financial loss when you travel. Depending on the type of policy you purchase, travel insurance usually covers emergency situations such as trip cancellation or interruption, accidents, illnesses and trip delays . 

Since your primary health insurance is not applicable abroad, many travelers will purchase travel health insurance to cover unexpected medical expenses.

The cost of a travel insurance policy depends on the age of the travelers, duration of the trip, location of the trip, how much the trip costs, policy tier selected and more. If you’re planning a trip and you’ve made a significant investment that you can’t afford to lose, you might need travel insurance.

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How Does Travel Insurance Work?

Like most types of insurance, travel insurance works on a reimbursement model. You pay for your travel first and if you experience a covered loss, apply for a reimbursement with your insurance provider later. For this reason, it is important to understand what a plan does and does not cover and how it works before you buy a policy. 

Primary vs. Secondary Insurance Coverage

If you purchase a travel insurance policy to supplement your standard health insurance, it is important to determine which policy will serve as the primary insurance. If your travel insurance provides the primary medical coverage, it will act as the first source of payment for eligible medical expenses. So if you incur medical bills abroad, primary medical insurance will cover your expenses without requiring you first to file a claim with your standard health insurance.

If your travel insurance offers secondary medical coverage, it will only kick in after other applicable insurance policies. In most cases, you must file a claim with your standard health insurance provider first before filing one with your travel insurance provider. Your travel medical coverage would then cover any remaining eligible expenses not covered by your primary insurance.

If you do not have health insurance, having travel insurance with secondary medical coverage is likely not as beneficial. Travel insurance policies are usually more affordable than primary medical coverage, and because you do not have backup insurance, can act as immediate primary coverage. 

However, some policies offering secondary coverage outline a minimum health insurance requirement for claim validity. So, read all the terms of your proposed travel policy before purchasing.

Coverage Limits and Requirements

Travel insurance policies have financial caps or dollar limits on covered situations. For example, if your policy offers $150,000 in emergency medical expenses, your provider will pay out a maximum of $150,000 toward covered expenses. If your expenses exceed $150,000, you are responsible for the extra costs. 

For trip interruption and cancellation protection, insurers usually calculate coverage as a percentage of your total trip cost. So, if interruption benefits include 125% coverage reimbursement on a trip with a total value of $5,000, you can claim up to $6,250 in benefits. For reference, most travel insurance plans include 100% trip cancellation coverage and a minimum of 125% trip interruption coverage to compensate for extra charges such as unexpected flight changes.

In addition to knowing coverage limits, noting any policy use restrictions before buying a plan is good practice. Your provider will likely require you to document all expenses incurred when you file a claim, such as if you buy clothing and cosmetics to replace lost baggage . Most travel insurers also ask you to contact a representative to request authorization before using a medical evacuation benefit, even after being hospitalized.  

What Does Travel Insurance Cover?

Travel insurance is a holistic insurance that covers you in multiple areas. Let’s look at the most common coverages you’re likely to find on your travel insurance policy. 

Trip Cancellation and Interruption

Most travel insurance plans include trip cancellation and interruption coverage to reimburse prepaid, nonrefundable expenses if your trip is canceled or delayed for a reason outlined in your policy. Valid reasons for cancellation usually involve extreme personal or financial hardship, such as:

• An illness, injury or hospitalization that prevents you from traveling
• Death of a family member or travel companion 
• Legal obligations, such as jury duty
• Natural disasters
• Acts of terrorism or war 

Trip interruption coverage offers financial protection if you must return home earlier than originally planned. If a family member gets sick back home while you’re abroad, your trip interruption coverage may cover a sudden return flight and reimburse unused trip expenses.

Specific reasons that qualify the use of trip cancellation and interruption benefits vary by insurance company. If you want to extend your benefits to cover more situations, consider buying cancel for any reason (CFAR) coverage , which lets you claim a partial reimbursement no matter why you cancel.

Baggage Loss or Delay

Benefits for lost or delayed baggage pay for the cost of belongings if an airline temporarily or permanently loses your luggage. However, baggage delay coverage usually has more limited benefits for temporary needs — such as clothing and toiletries — if a travel carrier sends your luggage to the wrong location. This coverage will also typically reimburse you for stolen belongings during a trip. 

To prove a loss or delay to your insurer, you usually need to provide documentation, such as receipts and a property irregularity report (PIR) from an airline. It is also important to note the financial limits on eligible claim items. For example, while most baggage loss policies cover jewelry, you may face a limitation of $100 or less for each lost piece of jewelry. You can also consider additional coverage riders for exceptionally high-value items, such as musical instruments and sporting equipment. 

Auto Rental Damage Coverage

If you plan to rent a vehicle while away, consider adding rental car coverage to your travel insurance policy. Travel insurance usually includes auto collision coverage, which usually pays for damage to a rental car. So if you total your rental car in an accident, collision insurance helps pay the cost of repairs.

Depending on your rental car provider and where you’re visiting, you may need liability coverage to drive legally. In the U.S., for example, each state sets liability requirements for drivers. Travel insurance with auto coverage usually does not supply the necessary liability insurance to drive, so consult with your rental car company to learn more about meeting local requirements.

Vacation Rental Coverage

Some insurance companies also have vacation rental coverage that pays for the cost of any damage done to a short-term rental property. For example, if you rent an Airbnb and your pet urinates on the carpet, the rental owner might charge you for the cost of cleaning or replacing the rug. Depending on your policy coverage, vacation rental insurance would cover this charge.

Travel insurers typically classify auto rental and vacation rental coverage as add-ons, meaning coverage is not included under most standard plans. If you select either add-on, your premium will increase. 

Emergency Evacuation and Transportation

If you’re visiting a remote area or taking a cruise , you might consider insurance to cover medical transportation. Emergency medical evacuation coverage can help you pay for the cost of transportation services if you are far from a local facility equipped to treat your injuries. 

Some policies also offer the ability to use emergency evacuation services because of civil unrest or a political emergency.

Travel Medical Insurance Coverage

Travel medical insurance helps cover medical bills you might incur while on a trip away from home. Many health insurance policies, including government-sponsored policies like Medicare , do not cover injuries and illnesses incurred abroad. A travel medical insurance plan can help you pay the medical bills if you need healthcare while traveling outside your primary health insurance plan’s service area. 

“Find out what, if anything, your domestic health insurance covers when you travel. Even if you do, it could be only for emergencies, and your health insurance company’s definition of an emergency might not be the same as yours. Because of this, we always recommend travel medical insurance for international travel.”

– Angela Borden, Product Marketing Specialist at Seven Corners

Travel Insurance Additional Benefits

Some travel insurance providers offer benefits beyond the above-listed standard inclusions, such as:

• Document replacement: If you lose your passport or personal ID card while abroad, you may need to visit a local consulate for a replacement. Travel insurance with document replacement coverage can help you cover the associated cost.
• Flight departure delay: Some insurers, such as Berkshire Hathaway , give you a credit if your flight gets delayed by more than two hours. You can use the credit to pay for refreshments or entertainment, such as Wi-Fi, during a delay.
• Tarmac delay: Some companies provide a set benefit if your flight is stuck on the tarmac for a specific number of hours. 
• Other benefits : Some insurance providers include additional benefits, such as rental car coverage or identity theft coverage.

What’s Not Covered by Travel Insurance?

Each travel insurance company creates its own policy packages, meaning exclusions vary from company to company. You should assume that any services not listed in your contract are excluded from coverage. Some of the most common circumstances when you cannot use your travel insurance coverage include the following:

Most travel insurance policies cover sudden travel expenses resulting from unexpected natural disasters, such as hurricanes and tropical storms. However, your coverage won’t apply to losses caused by storms that were already named when you booked your insurance.

If you’re traveling abroad to seek medical treatments, there’s always the chance of complications increasing the cost of your services. Medical tourism expenses are not covered under travel insurance policies.

Even if you purchase trip cancellation coverage, you cannot cancel your travel for any reason and still claim a refund. If you change your mind and don’t want to travel anymore, your travel insurance will not reimburse you for your expenses

Other standard exclusions include:

• Fear of flying
• Injuries incurred during extreme sports
• Preexisting conditions (on medical policies)
• Travel to high-risk destinations

How Much Does Travel Insurance Cost?

The price you pay for travel insurance depends on several factors, including:

• Your total trip cost: The amount you pay for your trip will impact your travel insurance quote, with more expensive trips usually costing more to insure due to the risk of higher payouts.
• Destination: Some countries have more robust government and healthcare infrastructures than others. The quality and average cost of medical services in the country you’re visiting will typically influence your insurance cost.
• Length of your vacation: The longer the duration of your trip, the more you will typically pay for travel insurance.
• Your age: Older travelers usually pay more for travel insurance because insurance companies assume they are more likely to get hurt, sick or experience an accident, such as a fall, while abroad.

To help give you an idea of what you might pay for travel insurance, the MarketWatch Guide team gathered a series of quotes for several sample trips. Here is the pricing for popular plans with our recommended providers. 

What Is the Cheapest Travel Insurance?

After extensive review, our team found the average cost of a basic travel insurance policy is between $91 and $108 . The least expensive travel insurance companies are Travelex, Faye and Nationwide, according to our review. 

Read more about the cheapest travel insurance providers in our review. 

How Do I Get Travel Insurance?

Are you thinking about buying a travel insurance policy for your upcoming trip ? Here’s how to start comparing policies to get the coverage you need.

Check Current Coverage

If you’re primarily concerned about buying travel insurance for medical expenses and already have health insurance, travel insurance might not be a necessary expense. Employer-sponsored medical coverage, for example, will provide health care coverage anywhere you travel within the United States. Companies that provide ACA-compliant health insurance plans are also legally required to cover emergency services administered at any medical facility in the United States.

If you’re traveling internationally, your health plan will likely have exclusions or limitations on treatments you receive abroad. For example, most Medicare plans don’t offer coverage for international treatments. Contact your health insurance provider to learn what, if anything, your plan will cover abroad.

You might also have additional protections you’re unaware of. Some credit card companies offer limited coverage for airline baggage delays, and life insurance coverage for accidental death and dismemberment still applies abroad.

Assess all your household coverages and consult with insurance providers you’re currently working with to see how much extra trip insurance you need.

Consider Individual Needs

The best travel protection for your upcoming trip will depend on what you’ve spent on the trip, where you’re going and how often you travel. You’ll also need to consider the types of coverage you might need, especially if you’re headed abroad. For example, if you have a chronic condition that requires regular medical care in professional settings, you should consider coverage for a medical evacuation.

Like every other type of insurance, no single travel insurance policy will cover all expenses you might incur. Coverage limits apply to every trip, with the upper limit as the maximum amount that your insurance will compensate you. The higher your coverage limit, the more you’ll pay for your travel insurance plan — but it’s essential to tell the truth about your trip cost to be sure that you have adequate coverage. 

You can often save money on your coverage by selecting a policy with a lower deductible .

Now that you understand the multiple travel insurance types available, it’s time to begin claiming free quotes from competing insurance providers. Though most travel insurance providers allow you to claim a quote online, you can also contact most companies’ representatives via phone or email if you prefer personal assistance.

Remember to get a free quote from multiple insurance providers before choosing the right policy.

How Do I Use My Travel Insurance?

If you’ve ever needed to file a claim with your car insurance or pet insurance provider, you’re already familiar with the process of filing a travel insurance claim. While you’ll need to cover any emergency expenses on your own at the time of service, you can file a claim with proof of your loss or expense to your insurance company. Your insurance company will then assess your claim to ensure that your situation is covered before reimbursing you according to your policy.

You’ll need to incur a travel cost or expense that’s specifically covered by your insurance policy to claim a reimbursement. Make sure you read the fine print on your insurance contract before signing up for coverage, and save all receipts from your trip to maximize your benefits.

Do I Need Travel Insurance?

While some countries or visa requirements require travel insurance, many countries do not require U.S. travelers to purchase a policy as a condition of entry. You also do not need travel insurance to travel within the U.S. or visit Canada. 

Whether you should purchase travel insurance depends on your circumstances. Travel insurance is typically most valuable for expensive trips because you can recoup a higher value of expenses. In other words, reimbursement eligibility scales with vacation value. You may find insurance for low-cost trips tougher to justify financially — especially if part of the trip is refundable or you already have some insurance benefits through a travel credit card . 

Travel insurance is potentially of value if your regular health insurance is limited or you’re traveling to an area with a limited medical infrastructure. Getting sick or hurt abroad often comes at a high expense, especially if you require medical evacuation services to a hospital. Travel insurance that covers medical expenses and evacuations can help cover these costs, especially if your primary health insurance does not extend abroad.

Is Travel Insurance Worth It?

If you’re preparing for a trip, is it worth purchasing travel insurance ? The answer to this question will vary depending on your unique circumstances. If you’re preparing for an expensive international vacation, it’s likely worth the money to insure your trip against cancellation. This is especially true for long-distance trips that require expensive airfare. 

You might also want to consider travel insurance if you have known medical conditions that might cause you to need last-minute trip adjustments. 

Even if you don’t think you’ll buy travel insurance, getting a free quote or two takes only a few minutes — coverage might be more affordable than you think.

Frequently Asked Questions About Travel Insurance

Is it necessary to have travel insurance.

No law mandates purchasing travel insurance when you go abroad. However, you will be financially liable for any money lost due to travel delays or cancellations if you don’t have insurance. If you’ve prepaid for your upcoming trip, you should at least consider a trip cancellation coverage package to recoup a portion of your funds in an emergency.

What are the benefits of travel insurance?

Travel insurance benefits can include reimbursement for lost baggage, medical expenses and other costs incurred when you cancel a trip or encounter a delay. Travel insurance can give you the peace of mind that comes with knowing you can recover a portion of the cost of your trip if something goes wrong or you have an emergency.

Where can I purchase travel insurance?

You can purchase travel insurance through independent insurance companies, many of which offer a range of insurance products. Some of the most well-known names in travel insurance include Allianz, Nationwide and AIG. If you booked your vacation through a travel agency, your agent might also be able to recommend and book travel insurance for your journey.

What is the difference between travel insurance and a medical plan?

Travel medical insurance is a limited type of health insurance coverage that can help you pay for treatments and emergency services you require abroad. While you likely have a medical plan in the form of health insurance through your employer, most insurance companies don’t extend benefits to international services. Travel insurance covers medical expenses like a domestic medical plan but allows you to file claims for specific services and treatments received abroad.

If you have questions about this page, please reach out to our editors at [email protected] .

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Is travel insurance worth it?

The right policy can protect your belongings, your bank account and your peace of mind..

Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.

On April 24, 2024, the White House established new rules for airlines , mandating automatic and timely refunds for passengers whose flights had been changed, delayed or canceled. That's a big relief to travelers, but there are still many unexpected situations where travel insurance can be a lifesaver before or during your trip.

"Travel insurance is often an overlooked investment until the unforeseen happens," says Beth Godlin, president of Aon Affinity Travel Practice . "It's designed to give travelers peace of mind and financial protection against travel risks."

A policy doesn't have to be expensive, according to Godlin, to add a layer of protection and security.

Getting travel insurance

How do i get travel insurance, what does travel insurance cover.

• New airline regulations in 2024

How much does travel insurance cost?

• Bottom line

There are many options in the travel insurance marketplace: Aggregator site Squaremouth lets you get price quotes from different carriers and, because it receives a commission from the insurance companies on its site, users aren't charged any additional fees.

Allianz has both single-trip and annual plans, with a Cancel For Any Reason (CFAR) policy that reimburses up to 80% of prepaid, non-refundable expenses. That's more than most similar plans on the market.

In addition to trip cancellation, Allianz's popular OneTrip Prime plan includes travel interruption, emergency medical care and emergency transportation. Children 17 and under are covered for free when traveling with a parent or grandparent.

AIG's Travel Guard® plans are great if you need to customize coverage: The mid-range Travel Guard Preferred plan pays out 100% for trip cancellation and 150% for trip interruption, with up to $50,000 in coverage for medical expenses and up to $500,000 for emergency evacuation. There's even a payout of up to $1,000 if you miss your connection.

Travel Guard® Travel Insurance

The best way to estimate your costs is to request a quote

Policy highlights

Travel Guard offers a variety of plans to suit travel ranging from road trips to long cruises. For air travelers, Travel Guard can help assist with tracking baggage or covering lost or delayed baggage.

24/7 assistance available

If you're booking a trip with an aggregator site like Expedia , review the details of any travel policy that's offered. Plans are usually based on the elements of the trip (hotel, flight, rental car, etc.) and can differ every time you book.

Travel insurance generally covers your expenses, your belongings and your well-being. When shopping for a policy, look for these benefits:

Trip cancellation

If your trip is canceled for a covered reason, a policy will often reimburse airline tickets, hotel rooms, rental cars, tours, cruises and other prepaid, non-refundable expenses. Covered situations can include illness or injury, the death of a family member or traveling companion, job loss, military deployment and even unplanned jury duty, according to Allianz's Daniel Durazo.

Cancellations can also be covered if a natural disaster, severe weather or airline strike prevents your carrier from getting you to your destination for at least 24 hours.

CFAR plans provide a lot more flexibility and typically reimburse 50% to 75% of your expenses. But they can bump up the cost by about 40%, said Durazo. Policyholders are also still usually required to cancel no later than 48 hours before their scheduled departure. 

Trip delay 

Should you experience a hiccup in your plans, your policy can provide some relief: Food, lodging and local transportation are usually covered if a delay is due to severe weather, airline maintenance or civil unrest.

"For a traveler to be eligible, they must be delayed for the minimum amount of time listed on their policy," said Squaremouth spokesperson Megan Moncrief. "Some policies are very lenient and provide benefits for any length delay, while others list a length requirement — usually somewhere between three to 12 hours."

Daily payout limits range from $150 to $250 per traveler, according to Moncrief, while the total policy limit can be anywhere from $500 to $2,000. Save any receipts to submit with your reimbursement claim.

Don't miss: The best credit cards with trip delay insurance

Trip interruption

Should you need to cut your trip short due to illness or injury, or if there's a family emergency back home, your policy may reimburse non-refundable expenses you forfeited.

It may also cover the cost of a one-way economy airline ticket home.

Baggage loss

Airlines are required to compensate passengers for luggage lost in transit, but a travel insurance policy may have a higher benefit limit. It could also cover you if your bags, passport or other possessions are lost, damaged or stolen once you've gotten to your destination., The Platinum plan from AXA Assistance USA has a $3,000 benefit limit for lost luggage, well beyond the $1,700 that airlines are required to provide on international flights. AXA has offices in more than 50 countries, with multilingual operators available 24 hours a day to help reschedule flights, book hotels and make other arrangements.

AXA Assistance USA Travel Insurance

AXA Assistance USA offers several travel insurance policies that include travel interruption, trip cancellation, and the option of cancel for any reason (CFAR) coverage.

Travel insurance doesn't cover every loss: Cash is not reimbursable and many policies won't reimburse for expensive jewelry or heirloom items. Read your policy carefully to see what is included.

Medical expenses and emergency evacuation

If you travel within the U.S., your health insurance should cover any illness or injury you sustain. If you're traveling abroad, though, your plan may provide little or no coverage. The right travel insurance should cover doctors' fees and hospital bills, Durazo said. 

The provider can also help coordinate care and ensure you're at a medical facility that's up to U.S. standards.

An emergency medical evacuation can cost anywhere from $15,000 to over $200,000, Durazo added.

New airline regulations in April 2024

The Biden administration announced on April 24, 2024 , that it had finalized new rules requiring airlines to issue cash refunds to passengers if their flights were canceled or significantly changed, their checked luggage was significantly delayed or if purchased services, like Wi-Fi, were not provided.

Refunds must be automatic and made via the same form of payment as the original purchase. Travelers must be reimbursed within seven business days if the refund is going to a credit card. (Other forms of payment can take 20 calendar days to be reimbursed.)   The new Department of Transportation regulations also require airlines and ticket agents to disclose upfront any fees for changing or canceling your reservation, seat selection, checked bags or carry-ons. The Biden administration has targeted junk fees across numerous industries, including credit card companies. It said the rule will help consumers avoid unneeded or surprise charges that can quickly add up and obscure the real cost of a seemingly inexpensive ticket.

A travel insurance policy typically costs between 4 and 10% of the overall price of your trip. The cost can vary:

• Plans with higher limits and more optional coverage cost more.
• A plan with a CFAR benefit can cost up to 40% more.
• Older travelers typically pay more because there's more of a likelihood of a claim being filed. 

Whichever plan you choose, read the fine print so you understand what you're paying for.

While regulations on airlines are becoming increasingly stringent about reimbursing travelers for delayed or canceled flights, that doesn't do you any good if it wasn't the airline that put a kink in your plans. Travel insurance covers numerous scenarios, from medical emergencies to tropical storms. It could be particularly useful if:

• You've spent a lot on prepaid, non-refundable expenses
• You're traveling internationally where your health insurance won't apply
• You're traveling to a remote area
• Your flight involves multiple connections or destinations

"When deciding if travel insurance is right for you, ask yourself how much you could stand to lose if you had to cancel at the last minute," said Godlin.

If you're not as concerned about risk, your credit card may offer built-in travel protection if you book with that card: Chase Sapphire Preferred® , Southwest Rapid Rewards® Plus Card and the  *American Express® Gold Card all come with trip cancellation and interruption coverage, among other benefits.

*Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

Chase Sapphire Reserve®

Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025

Welcome bonus

Earn 75,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,125 toward travel when you redeem through Chase Travel℠.

Regular APR

22.49% - 29.49% variable

Balance transfer fee

5%, minimum $5

Foreign transaction fee

Credit needed.

Terms apply.

Read our Chase Sapphire Reserve® review.

Southwest Rapid Rewards® Plus Credit Card

Earn 2X points on Southwest® purchases, 2X points on local transit and commuting, including rideshare; 2X points on internet, cable and phone services; select streaming. 1X points on all other purchases

Earn 50,000 bonus points after spending $1,000 on purchases in the first 3 months from account opening.

21.49% - 28.49% variable

Foreign transaction fees

Excellent/Good

American Express® Gold Card

4X Membership Rewards® points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases

Earn 60,000 Membership Rewards® points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

Not applicable

See Pay Over Time APR

See rates and fees , terms apply.

Read our American Express® Gold Card review .

Research your card's travel benefits before making any purchases related to your trip.

Policies vary, but most comprehensive plans cover travel cancellation and interruption, baggage loss, medical care and emergency transportation.

While the price for coverage varies, most policies cost between 4% and 10% of the trip's prepaid, non-refundable expenses.

When should I get travel insurance?

It's best to take out a policy within days of making your reservations.

Does travel insurance cover COVID-19?

If you contract COVID-19 before or on your trip, it may be covered by your policy's trip cancellation/interruption benefit . You'll likely have to confirm your test results with a diagnosis from a healthcare provider.

Bottom line 

Travel can be a wonderful experience, but it involves a lot of time, planning and money. Missing a single connection can have a cascade effect that impacts your flight, hotel room, dinner reservations and more. A good travel insurance policy can provide peace of mind so you can focus on your vacation.

Compare and find the best life insurance

Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox.  Sign up here .

Meet our experts

At CNBC Select, we work with experts with specialized knowledge and authority. For this story, we interviewed Beth Godlin, president of Aon, which provides custom travel insurance for tour operators, cruise lines, travel websites and others. We also spoke with former Squaremouth Megan Moncrief and Allianz communications director Daniel Durazo.

Why trust CNBC Select?

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance article is based on rigorous reporting by our team of expert writers and editors . While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage of  credit cards ,  banking  and  money , and follow us on  TikTok ,  Facebook ,  Instagram  and  Twitter  to stay up to date.

For rates and fees for the American Express® Gold Card , click here .

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Six Travel Mistakes to Avoid

No travel medical insurance? Unnecessary luggage and hotel fees? Here are the biggest travel mistakes people make and how you can avoid them.

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Even the most seasoned tourists can make travel mistakes when planning a vacation. Some blunders can be minor infractions, but others can cost travelers a lot of money and heartache. 

But there are steps you can take to avoid travel mistakes. Here are six slip ups that travelers may make this year, plus tips on how to avoid them.

1. Overlooking travel medical insurance

Christopher Elliott , a consumer advocate and founder of the nonprofit Elliott Advocacy , says many people don’t consider purchasing travel medical insurance . “People often think nothing bad will happen before or on their vacation, but then they get injured overseas and need to go to the hospital, and the next thing they’re looking at is a $10,000 hospital bill.” Indeed, nearly one in four Americans report they’ve experienced a medical issue while traveling abroad, according to a 2023 survey sponsored by GeoBlue, an international health insurance company. 

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Unfortunately, most U.S. healthcare plans — including employer group plans, Medicare and Affordable Care Act plans — offer limited or no medical coverage outside the U.S. 

How to avoid: One solution is to purchase a travel medical insurance policy, a type of insurance that provides coverage for a range of medical emergencies while traveling abroad, from minor injuries to major events like heart attacks and strokes, to medical evacuation and emergency transport in the case of severe emergencies. 

The average travel medical insurance plan costs $89, according to Squaremouth , a travel insurance comparison website. Squaremouth advises international travelers to obtain a policy that provides a minimum of $50,000 in emergency medical coverage and at least $100,000 in medical evacuation coverage. 

Note: Some travel insurance policies include emergency medical coverage and medical evacuation coverage up to certain limits.

2. Getting hit with unnecessary luggage fees

You may have heard that a number of airlines — including American Airlines , Delta , and JetBlue Airways — recently raised their prices for checked bags. But one thing a lot of travelers aren’t aware of, Elliott says, is that some are now charging customers more if they check a bag at the airport versus paying to check a bag in advance. For instance, JetBlue customers flying within the U.S., Latin America, the Caribbean and Canada can save up to $20 on their first two checked bags ($10 savings per bag) when they add them to their flight reservation at least 24 hours before departure.

How to avoid: Make sure to pay ahead of time for any bags that you plan to check.

3. Incurring hidden hotel fees

Wi-Fi fees, early check-in fees, gym fees—hotels today charge guests no shortage of extra fees and surcharges . It’s a widespread problem: In an April 2023 survey by Consumer Reports , nearly four out of 10 (37%) U.S. adults said they had experienced a hidden or unexpected hotel fee in the previous two years.

How to avoid: Many hotels offer to reduce or, in some cases, waive certain fees to guests who join their loyalty program, which is free in most cases. Also, sometimes simply asking an employee at check-in to waive certain fees could do the trick.

4. Not utilizing a key search feature on Airbnb

Like hotels, Airbnb rental property owners often tack on extra fees, such as cleaning fees, fees for additional guests beyond a certain number, and service fees. These additional costs can add hundreds of dollars to your bill.

How to avoid: Elliott praised Airbnb for introducing a feature in December 2022 that allows guests to view a stay’s total costs, before taxes, when searching for rental properties. But he says there’s a caveat: “If you’re in the U.S., you need to change a setting in order to see the full rate when you search for rentals.”

To enable the feature, click the slider on the upper right of the search page that says, “Display total before taxes.”

5. Paying full price for a rental car

First, the good news: “The rental vehicle shortage has improved,” Elliott says. That’s resulted in a stabilization of rates, with rental car prices recently averaging $42 a day, up only 3% from last year, according to a report from the travel search company Hopper. The bad news? Renting a car is still more expensive than it was before the pandemic, especially for travelers who pay full freight.

How to avoid: There are several ways you can avoid paying full price. Big-box stores such as Costco , BJ’s and Sam’s Club provide their members discounts on certain rental cars. AARP and AAA also offer their members discounted rates. ( AARP members save up to 30% on base rates at Avis and Budget Rent A Car; AAA members save up to 20% on Hertz rentals). In addition, a number of credit card companies offer certain cardholders rental car discounts when they book a vehicle from specific rental car companies.

You may also be able to nab a lower rate by prepaying when you book a reservation. And, some rental car companies offer limited-mileage plans at a lower cost, which could be a good option if you’re planning to take just a short trip.

Tip: See if your credit card offers rental car insurance before you pay for insurance from a rental car company.

6. Encountering sky-high hotel rates because of Taylor Swift’s European tour

When Taylor Swift performs a concert, sometimes tens of thousands of out-of-town fans descend on the city, causing hotel prices to spike. Consider: the median rate for a standard hotel room during an Eras Tour date in Europe this year is projected to jump by 44%, with average hotel room prices in Warsaw surging a staggering 154% during her tour date there, according to a recent study by Lighthouse , a travel and hospitality research company.

How to avoid: The simplest approach for Europe-bound travelers in 2024, Elliott says, is to avoid traveling to a destination during a Taylor Swift tour date in that city. “When Taylor Swift comes to town all of the hotels sell out, and it becomes very difficult to find a reasonably priced hotel,” he says.

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Daniel Bortz is a freelance writer based in Arlington, Va. His work has been published by The New York Times, The Washington Post, Consumer Reports, Newsweek, and Money magazine, among others.  

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The fundamentals of term life insurance

Why choose term life insurance, who is term life insurance best for.

• How to buy term life insurance 

Term Life Insurance: Simple, Affordable Protection

Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate insurance products to write unbiased product reviews.

• Term life insurance offers coverage for buyers who want to protect their family for a limited time.
• 99% of term policies never pay out due to conversion, expiration, or lapsed payments.
• Not all term life insurance policies can be converted to permanent life insurance.

Life insurance can financially make or break a family after an unexpected loss. Yet, many individuals don't prioritize it, especially while young and healthy. Ironically, the best time to buy life insurance is also the time when buyers are least likely to see the long-term value. "If you don't make it home and someone relies on your income to live, you need life insurance," says Mark Williams, CEO of Brokers International.

It may feel difficult to justify paying for another big monthly expense on top of housing, car payments, student loans, and retirement savings. But when it comes to protecting your family, if a devastating loss occurs, an extra $20 to $60 a month is a small price to pay. If you're buying term life insurance, the goal is to protect family members should you die unexpectedly within a pre-agreed term.

Term life insurance offers temporary coverage, usually over a 10-, 20-, or 30-year period. If you die during your term, your beneficiaries get your payout, known as the death benefit. Unlike permanent life insurance , which lasts your lifetime, term life insurance doesn't offer a cash value component . This feature allows you to earn interest on a portion of your premiums to grow your policy. 

The main appeal of this type of insurance policy is its affordability. The best term life insurance can keep costs down, especially for younger, healthy individuals. However, keep in mind that if you decide to renew your policy, your premiums will increase based on your age and health status. 

Cover specific needs

Many people only require life insurance to protect their dependents financially if they pass away. For example, say you have children who rely on your income or a spouse you share a mortgage with. Temporary coverage is ideal if you want protection for specific temporary needs until your children move out or the mortgage gets paid off. 

Flexibility

Term life insurance gives you the flexibility to select the coverage amount and the length of the term based on your family's needs and your budget. You can add a term life conversion rider to your policy (some policies already include this benefit). This add-on upgrades your term to a permanent policy if you opt to convert within a certain amount of time. 

Affordability

Term life insurance is ideal if you need substantial coverage but are working with a limited budget. According to Policygenius , the average monthly premium for a $500,000 policy is $27. Compare this to the average monthly cost of a $50,000 whole life insurance policy, which is $451. 

Term life insurance is best for anyone who requires temporary insurance and wants the most coverage at a competitive rate. Life insurance is particularly crucial for families with young children and those with an outstanding mortgage. It ensures your dependents can maintain their current lifestyle and pay off their debts. 

On the other hand, if you have long-term dependents, such as a child with a developmental disability or an elder parent with dementia, permanent life insurance may be a more suitable option.

How to buy term life insurance 

Term life insurance can be purchased through industry giants like New York Life Insurance , Guardian, and MassMutual Life Insurance . If you want a higher value policy, the option to convert at a later time, or term riders to temporarily increase the value of a whole life insurance policy, we'd recommend working with established giants. 

However, many online-only companies like Ethos and Ladder Life offer easy alternatives for people willing to accept less flexibility for a lower monthly premium. We've rated the best term life insurance companies based on coverage, price, service, and other key factors. Whatever you choose, we recommend shopping around. There are four steps to purchasing term life insurance:

Step 1: Apply

Some insurance companies allow you to obtain a term life insurance quote online. Others require you to speak to one of their insurance agents. Regardless, you'll typically have to take a health questionnaire and medical exam to qualify for a policy. If you have pre-existing health conditions that disqualify you from a traditional term life policy, consider looking into no medical exam life insurance .

You can find our guide on the best no medical exam life insurance here.

Step 2: Choose a term

According to Guardian Life Insurance , a good rule of thumb is to choose a term long enough to see your children out of the house and through college. You'll pay more monthly for a longer term, but it is better to be cautious because you don't know what the future holds. Also, getting insurance when you are young and in good health is usually easier.

Step 3: Decide a death benefit amount 

Ten times your annual salary is a rule of thumb, but you can decide what works for your family and financial situation. Work with an insurance agent or a financial advisor to determine how much coverage you need. 

Step 4: Name a beneficiary

A beneficiary is the person you select to receive the death benefit. You can pick multiple people, a trust you've set up, or a charity, according to the Insurance Information Institute . Most people select their spouse, partner, or trust created for a child.

Term life insurance FAQs

When your term ends, you no longer have coverage. If you die after your coverage ends, your beneficiaries won't receive a death benefit. To ensure continuity in coverage, you can purchase another term. Alternatively, many policies offer built-in conversions or conversion riders at an extra premium to upgrade your term into a permanent policy. 

It depends, but you'll likely see increased premiums . Some companies offer no medical exam life insurance, allowing you to obtain coverage despite your medical condition. However, these policies tend to have higher premiums for limited coverage. 

Roughly 10 to 15 times your income. However, this figure can vary based on your debts, income, mortgage, final expenses, and your children's future educational expenses. Work with an insurance agent or a financial advisor to accurately assess your term life insurance needs.

Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards .

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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Trip Cancellation Insurance Explained

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

Table of Contents

What is trip cancellation insurance?

Covered reasons for trip cancellation, what is not covered by trip cancellation insurance, cancel for any reason trip insurance, is trip cancellation insurance expensive, different ways to get trip cancellation insurance, which insurance coverage is best for me.

When booking travel, particularly expensive trips consisting of nonrefundable reservations, it makes sense to consider trip cancellation insurance since it can protect your deposit if your plans do not materialize due to unforeseen events. However, not every reason for canceling a trip will qualify for coverage, so you’ll want to familiarize yourself with the basics of trip cancellation insurance.

Trip cancellation coverage can be purchased as part of a comprehensive travel insurance policy , or you can receive it for free when you hold certain premium credit cards. The benefit is designed to protect prepaid, nonrefundable reservations, including flights, hotel reservations and other bookings if the trip is canceled due to an extraordinary circumstance. Each policy will state exactly which events are considered valid reasons for cancellations.

With COVID-19 still affecting travel plans, you’ll want to pay close attention to which reasons for cancellation due to the pandemic are valid. For example, wanting to cancel a trip you booked a while ago because your destination now has rising COVID-19 numbers and you’re afraid to travel is not likely a valid reason.

If you want to be able to cancel a trip for truly any reason, consider the Cancel For Any Reason supplemental upgrade when purchasing your insurance policy. CFAR will allow you to get up to 75% of your trip investment back as long as the trip is cancelled at least two days before departure.

» Learn more: Does my travel insurance cover the coronavirus?

Imagine you’ve booked a two-week vacation to Italy costing $5,000 ($1,000 flight, $3,500 hotel and $500 excursions), all of which is nonrefundable. Then, a week before your departure date, you fall and break your leg.

So, what does trip cancellation insurance cover?

If you have trip cancellation insurance, you’ll be able to get your entire prepaid, nonrefundable trip cost back (as long as the entire amount was insured), since injuries that necessitate medical treatment and prevent you from taking your trip qualify as a covered reason.

Other covered reasons include death of your traveling companion, inclement weather that results in disrupted service, jury duty, terrorist incident, job termination and other extraordinary events.

Although this is not an entire list of all the covered reasons, generally the cancellation must be due to unforeseen circumstances to qualify for a reimbursement. Review the fine print of your policy for the details of exactly which reasons are covered. When seeking reimbursement, you’ll need to submit claims to the insurance provider to substantiate your claim.

Although a wide range of reasons allow you to receive your prepaid, nonrefundable travel expenses back in the event of a trip cancellation, there are important exclusions to know about.

Trip cancellation insurance will not cover losses arising from self-harm, foreseeable events, acts of war, taking part in activities considered dangerous (e.g., skydiving, bungee jumping, endurance races, etc.), a felony, childbirth, dental treatment and more.

» Learn more: How to find the best travel insurance

So what if you want the flexibility to cancel your trip for reasons other than those covered by your policy? For that, you're going to need the CFAR insurance mentioned above.

CFAR is often available as an add-on to travel insurance policies, and while it can come in handy if you want to cancel your trip just because, you're not likely to get all your money back.

Most CFAR policies will only reimburse 75% of your nonrefundable travel expenditures.

» Learn more: Best travel insurance with Cancel For Any Reason Coverage

The price of trip cancellation insurance can vary based on the traveler’s age, destination, length of trip, cost of trip and insurance company.

Using the same $5,000, two-week trip to Italy as mentioned above, a search of policies on SquareMouth (a NerdWallet partner) ranged from $115 to $470, representing 2.3% to 9.4% of the total trip cost.

» Learn more: How much is travel insurance?

All policies provide 100% coverage of the trip cost, however the more expensive plans usually have higher limits on benefits like medical evacuation.

If you’re only looking for trip cancellation coverage and no other protections, a policy equating to 2.3% of the total trip expenses seems reasonable.

On your travel credit card

Trip cancellation coverage can be included as part of a comprehensive travel insurance plan or offered as a benefit on premium travel credit cards.

For example, the Chase Sapphire Reserve® will reimburse you or your immediate family members up to $10,000 per trip. The Business Platinum Card® from American Express and many other American Express cards also offer up to $10,000 in trip cancellation coverage. Terms apply.

These premium cards also offer other insurance benefits like trip interruption coverage, emergency assistance services, trip delay and more.

If you travel often and typically purchase trip cancellation coverage, consider applying for one of the cards that offer complimentary travel insurance . Not only will you get trip insurance benefits, but you will also get other travel perks and statement credits that can partly offset the annual fee.

Supplement by purchasing policies out-of-pocket

If the coverage limits offered on the cards aren’t sufficient or you’re looking for more protections (e.g., coverage for emergency medical expenses), you’d be better off with a travel insurance . Although you’d incur an additional cost for purchasing a comprehensive plan, you’d have many more benefits not commonly found in the insurance policies offered by the credit cards.

A comprehensive trip cancellation policy is likely to cover canceled flights so long as the flight or flights are nonrefundable and are a part of the total, prepaid expenses covered by your policy. Insurance provided by travel cards typically includes trip delay or cancellation coverage so long as you used that card to pay for your flight reservations.

If you're forced to cancel your trip due to extraordinary circumstances beyond your control, travel insurance will provide coverage for some or all of your nonrefundable travel expenditures, depending on your policy. Covered events will vary, so be sure to review the terms of any plan you intend to purchase.

Trip cancellation insurance is available for purchase from a wide range of companies and is often included as a benefit on travel credit cards. Under certain circumstances, it provides coverage for prepaid travel expenses in the event that you cannot complete your trip as planned.

A comprehensive trip cancellation policy is likely to cover canceled flights so long as the flight or flights are nonrefundable and are a part of the total, prepaid expenses covered by your policy.

Insurance provided by travel cards

typically includes trip delay or cancellation coverage so long as you used that card to pay for your flight reservations.

If you’re going on a trip consisting of costly flights, hotel reservations and excursions and would like to protect your prepaid, nonrefundable deposit but do not need any other coverage, a minimally priced trip cancellation insurance policy is a good choice.

If you have a premium travel credit card , check if you already have trip cancellation insurance as a benefit before you purchase a policy.

However, if you’re looking for additional coverage like travel medical insurance , and/or a basic plan doesn’t have adequate limits, consider a comprehensive travel insurance policy from providers such as AAA , Allianz , and AIG . Read NerdWallet's full analysis of the best travel insurance companies here .

How to maximize your rewards

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Developing an effective M&A blueprint for insurers

At its core, programmatic M&A  is not a volume play; it’s a strategy for systematically acquiring small to midsize businesses, services, and capabilities and for effectively integrating them as new businesses or capabilities. Companies that adopt this approach to deal making , including a select group of insurers in both the life and property and casualty (P&C) sectors, have generated superior excess TSR by focusing on a series of smaller acquisitions to diversify product offerings or add new capabilities—rather than traditional financial-sector M&A goals that emphasize building scale.

About the authors

This article is a collaborative effort by Alex D’Amico , Oliver Engert , Jay Gelb , Sean O’Connell , Kurt Strovink , and Liz Wol , representing views from McKinsey’s Insurance and Strategy & Corporate Finance Practices.

It’s an approach insurers should consider. Deal making in the sector is likely to be brisk in the coming years as insurers seek to grow and diversify their earnings. Life insurers face ongoing challenges to sustaining growth in core life and annuity businesses; they also remain focused on improving ROE profiles by divesting or reinsuring legacy blocks. Meanwhile, P&C carriers are likely to seek bolt-on deals of companies that enhance their presence in growth markets and offer attractive cross-cycle ROE.

To support a programmatic approach to M&A, acquirers need to canvass a large number of potential acquisitions—as many as two to three times more than they did several years ago. But in our experience, many insurance carriers are facing that volume of activity with little more than the most basic framework describing the how and why of their M&A strategy. In a recent informal poll of insurance executives who focus on strategy, business development, and M&A, 1 Our informal poll, completed in the fourth quarter of 2021, solicited input from 12 North American insurance executives, representing traditional carriers as well as newer entrants. Seven of the 12 respondents reported closing at least one or two deals per year over the past five years, with none of them characterized as large deals. we found that some believe they have relevant capabilities in place given their frequent engagement in M&A (Exhibit 1). Yet few of these rise to the level of what we would define as a fully developed M&A blueprint . Without such a blueprint, companies will find it hard to distinguish between through-cycle opportunities  (during both upcycles and downturns) that are consistent with their corporate strategy and low-hanging opportunistic deals available in the marketplace that are not. Furthermore, without a developed M&A blueprint, insurers are more likely to pursue ad hoc synergies around each target with hit-or-miss returns.

A robust M&A blueprint addresses where, why, and how a company will undertake a systematic program of acquisition. It lays out well-defined themes and criteria that are explicitly grounded in strategy, builds conviction and alignment of stakeholders, and sets clear boundaries and integration plans. The result is that companies can be both more proactive and more opportunistic at identifying potential acquisition targets and will be better prepared for negotiations and integration. As important, an effective M&A blueprint will be an invaluable tool for executives communicating a compelling story, both internally and to investors, about the company’s deal-making strategy and its vision for the future.

Where and why

The foundation of any M&A blueprint is an explicit articulation of how M&A aligns with and furthers a company’s growth strategy. Companies that acquire businesses expecting to refine the strategic rationale later are unlikely to reap the rewards of programmatic deal making. So are those that see smaller acquisitions as malleable building blocks to be pieced together ad hoc, that take an opportunistic approach to M&A, or that proceed without a pressure-tested integration playbook.

For companies considering acquisitions, an M&A blueprint should target specific growth themes and boundary conditions that reflect a comprehensive self-assessment of a company’s competitive advantages as well as the compelling strategy requirements for its business model that make it well suited to pursue M&A in a specific area. For example, a personal lines P&C carrier’s corporate strategy included enhancing customer growth through a digital engagement platform. Confident in the company’s ability to rapidly scale new businesses, managers decided that a program of M&A to acquire the various components of an integrated, direct-to-consumer platform would be the best way to accelerate domestic growth and support international expansion.

Identifying growth themes

An effective blueprint for programmatic M&A identifies at most three actionable M&A growth themes. 2 Even experienced programmatic acquirers are often unable to focus on more than three M&A themes. Even so, companies with highly distinct business units, such as life and P&C insurance, could identify more than three themes. But in general, for carriers new to this approach, focusing on one or two M&A growth themes to start with could be more beneficial. These themes should be areas where the company can add value to targets and needs M&A to deliver its strategy. They might include, for example, themes leading to superior product manufacturing capabilities across life and annuities as well as personal and commercial P&C lines, the ability to operate effectively in multiple international markets—which can be difficult to achieve through organic growth—or opportunities to target smaller companies with differentiated offerings and niche areas, including asset management or specialty commercial P&C lines.

A vague M&A blueprint with an unclear link to strategy tends to lead to overly broad objectives for deal making. “Increasing our digital focus,” for example, is not specific enough to help executives identify potential M&A targets. A more actionable objective might be framed as “improving underwriting methodology by acquiring companies with expertise in areas such as data analytics, intelligent pricing, antifraud, and telematics.”

Converging around the top one to three areas where M&A can most substantially advance the organization’s strategy takes some planning. Getting a group of executives to agree on a shortlist of M&A themes is bound to evoke some friction. If you were to go around the table at the next strategy meeting and ask your company’s senior leadership team to identify the organization’s top M&A themes, you’d likely end up with a long list of ideas. That’s acceptable, at first, because such an exercise can serve as a mechanism that compels everyone to take a closer look at their data, assumptions, and biases—a process that elevates awareness and understanding. But eventually, the most effective M&A blueprints also reflect alignment and conviction among senior leadership (including business unit leadership and the business development team) around a shortlist of M&A themes.

Among the North American insurance industry M&A executives we polled, the two most common objectives of pursuing deals are the acquisition of new capabilities and the expansion of product and service offerings. Less relevant acquisition rationales included expanding geographically, realizing economies of scale, and acquiring undervalued companies.

The CFO of one leading insurance company successfully focuses the carrier’s M&A agenda around a prioritized set of growth and capability themes. Close collaboration between the CFO’s team and business unit leaders enables the company to identify top acquisition candidates—which is a big factor in their success at conducting due diligence on dozens of potential targets each year. This company successfully completes multiple bolt-on deals per year, many of which are privately negotiated transactions cultivated through proactive sourcing rather than well-known opportunities in the marketplace. In addition, the CFO’s team uses its playbook to create value and meet integration targets, which maintains capabilities, improves the cost structure, and typically includes a boundary condition of achieving earnings accretion within 12 months.

Setting boundary conditions

One aspect of this assessment that is often overlooked is an explicit acknowledgment of the market and organizational forces that define the boundaries of a company’s deal making in terms of size, type, and pace. The most concrete boundary is probably how much capital an insurer has on hand or can raise to fund a program of acquisitions—including capital not just for funding acquisitions but also for integrating and scaling each asset.

Boundary conditions might also include financial metrics such as those reflecting an insurer’s growth targets, margins, earnings, or ROE. If a carrier is only anchored on certain return metrics, such as ROE or ROIC, to track ongoing performance of an acquired asset, then high-growth, early-stage companies often look less attractive. Alternatively, if an insurer is willing to look at an array of metrics based on the asset profile—such as ROE or ROIC for mature assets versus top-line growth for early-stage innovators—then it will have a greater degree of freedom for deal making. Finally, even softer assessments of organizational and cultural fit, financial limitations, or regulatory boundaries can further narrow the scope of potential targets.

Establishing these boundary conditions early—with explicit agreement from the CFO and the board—can help put teeth into investment commitments and align everyone on negotiable and nonnegotiable terms. Consider, for example, the case of one personal lines carrier. Over the years, the company had a generally successful track record of acquiring large insurers to add new brands and customer segments. However, these acquisitions were seldom fully integrated, resulting in unwieldy productivity metrics and a collection of separately maintained corporate functions, such as finance and HR. This M&A strategy worked reasonably well until the company realized its loose approach was not scalable. The insurer addressed this issue by resetting both its organizational and M&A approaches and refining its methodology to implement a series of boundary conditions for acquisitions linked to tightened integration parameters. These included centralized corporate functions that created additional efficiencies, rather than maintaining separate corporate functions for each company it acquired. As a result, the company is now able to effectively pursue growth through M&A.

Programmatic acquirers must give careful thought to how they plan to pursue M&A—a critical part of the M&A blueprint to advance their strategic plans.

How: A foundation for action

Programmatic acquirers must give careful thought to how they plan to pursue M&A—a critical part of the M&A blueprint to advance their strategic plans. This process includes constructing a high-level business case to identify the objectives and preliminary integration plans for each area. It also includes identifying the right capabilities and resources for each part of the deal-making process, as well as plans for tailoring the approach for each specific deal. Plans may need adjustments to reflect each deal’s sources of risk and whether value opportunities will come from consolidation, capability building, or new business opportunities, for example.

Business case to identify objectives

Once priority M&A themes and boundary conditions are established, the next critical step is to develop a granular road map for execution. The road map should identify how an acquisition would create value and create screening criteria to prioritize potential targets—within the boundary conditions of feasibility and availability.

Once the business case is developed at the theme level, carriers need to develop a plan for each identified acquisition candidate, including a top-down growth plan, capital and cost synergy assumptions, risk mitigation, and a determination of the investment needed to scale the asset. An effective business plan should be continuously refined based on the target’s relative size, its level of similarity with the acquiring business, and, as acquirers learn more about an asset, its working culture.

It is important to recognize that in a seller’s market, buyers face the risk of overpaying for an attractive asset. A critical way to reduce this risk is to apply the discipline of developing an M&A blueprint inclusive of a theme-level business case. This process is designed to enhance the due-diligence process and allow organizations to avoid making costly mistakes that are inconsistent with their growth strategies.

Capabilities and execution

Part of the self-assessment involved in developing an M&A blueprint is a review of the company’s internal talent; its capabilities; and the time needed to evaluate, pursue, and execute M&A deals, both before and after a transaction. If there are unknowns, what are the gaps that need to be addressed?

We recommend that companies develop a comprehensive integration playbook as part of the overall blueprint, including key activities for each area (such as value capture, cultural integration, and revenue synergies) and specific leadership roles that must be filled for a successful transaction. This includes senior sponsors in the organization, ideally business unit leaders who own initiatives and assign working teams against them.

At least half of the carriers we polled have playbooks centered on the initial stages of a deal, including target identification, due diligence, valuation, and integration planning checklists. But most of them lack guidelines about tailoring execution—a critical factor in the most effective acquisitions  (Exhibit 2). In particular, based on different deal archetypes in insurance, acquirers might have different perspectives on who leads across five critical design areas of merger integration:

• Governance: Who leads the overall value creation planning and business case development and review, and how they do it?
• Leadership: Who coordinates the integration and organization effort across ideation, business case development, approval, and rigorous tracking?
• Scope: What do we integrate, and to what extent, to realize the value aspiration?
• Speed and pace: How fast should we go, and how coordinated should the effort be?
• Culture and talent: How will we handle people?

One leading global player with a history of delivering strong M&A returns employs a highly disciplined, sponsor-oriented approach to deal making. The CFO assigns leadership roles to specific executives, who have ultimate responsibility for deal execution and integration. This approach ensures speedy decision making, which unblocks pain points and helps deliver a deal’s full value.

Building conviction

Embarking on a program of M&A requires conviction, commitment, and buy-in from internal and external stakeholders alike. An effective M&A blueprint, when developed collaboratively, can ensure that competing viewpoints are heard inside the company and that risks and opportunities are thoroughly vetted. This better prepares the CEO to communicate with the board but also enables the acquisition team to seek the support of its acquisition targets.

Embarking on a program of M&A requires conviction, commitment, and buy-in from internal and external stakeholders alike.

Drafting the M&A blueprint

An M&A blueprint isn’t something a single executive can draft—and it isn’t much use if it’s developed after the fact to confirm the hypotheses supporting an exciting deal. The best blueprints reflect senior-level coordination between corporate-strategy and corporate-development executives whose collective alignment helps build conviction in their decision to commit capital to transactions. When alignment is established, the process becomes efficient because executives are not debating which types of deals to target. This alignment occurs in no small part due to a transparent and unambiguous approach from the CEO.

After one deal failed to cross the finish line, a mutual insurer’s CEO and head of M&A conducted a six-week exercise to assess and strengthen the company’s M&A approach. As a result, the company aligned its growth themes and developed a process to scan for broadened opportunities—enhancements that led to a threefold increase in the number of potential acquisition candidates. The new blueprint increased the company’s confidence in deal making and ultimately led to multiple equity investments in companies that generated substantial financial returns and turbocharged capabilities.

Your reputation as an acquirer

For programmatic acquirers, today’s competitive M&A landscape has characteristics of a seller’s market. Small and midsize companies with innovative technology, next-generation products, undeveloped intellectual assets, or even well-honed capabilities in underserved markets can have multiple suitors—and they’re often interested in more than just the bottom-line sale price. As a result, acquirers need to make longer-term investments to build conviction in acquisition targets. Yet nearly half the carriers we polled lack a clear owner for proactive target cultivation, and only one-third of carriers regularly establish relationships with potential M&A targets.

Some acquirers maintain lists of potential acquisition targets and cultivate relationships with them, and we expect more companies to begin following suit in the next year or two. This development will change the job responsibilities of carriers’ most senior executives, including the CEO. For example, one global insurance industry leader keeps an extended list of close to 100 potential acquisition candidates. Executives update this list quarterly and actively reach out to candidates to cultivate them for potential fit and deals. Senior leaders will need to allocate greater portions of their time to cultivating acquisition candidates. As a result, they need to have time blocks (appropriately leveraged in coordination and collaboration with others) focused on developing long-term relationships with targets that might ultimately lead to acquisitions.

The most successful acquirers also take the long view on establishing and supporting their brand identity as a desirable buyer. Companies known for treating people fairly after an acquisition—as well as caring about the knowledge they bring to the enterprise—often enjoy an advantaged position among competing acquirers. A robust M&A blueprint should explicitly address a company’s reputation as a buyer, how that reputation will play out in the acquisition process, and how the acquisition team might use the blueprint as a screening criterion in cultivating acquisition candidates.

Programmatic M&A is a strategy for systematically building new businesses, services, and capabilities and effectively integrating them to build something that did not exist before. The companies that use a programmatic approach create deal flow linked to their conviction in their corporate strategy, understanding of their competitive advantage, and confidence in their capacity to execute.

Alex D’Amico and Kurt Strovink are senior partners in McKinsey’s New York office, where Jay Gelb , Sean O’Connell , and Liz Wol are partners; Oliver Engert is a senior partner in the Miami office.

The authors wish to thank Shaun Ayrton, Cristian Boldan, Alok Bothra, Deniz Lenger, Aria Mason, Yves Vontobel, and Andy West for their contributions to this article.

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Cancun without the crowds: Meet Isla Mujeres, a quieter Mexican getaway

As soon as I arrived at Isla Mujeres, I knew I was going to experience a completely different side of Cancun.

With turquoise-blue waters, soft sand beaches and ancient Mayan ruins, Cancun is one of the top travel destinations for Americans seeking out a tropical getaway. Located on the Yucatán Penisula, the city drew 30 million visitors in 2022. It’s an easy place to visit and offers visitors the most hotels in the country . 

A gorgeous beach locale? Definitely. Peaceful? Not exactly.

But looking out to the bright blue horizon, you’ll see the secluded haven I’m going to instead: Impression Isla Mujeres by Secrets . 

Those looking to escape the loud parties and crowds of Cancun but still bask in the Yucatan’s natural beauty should consider Isla Mujeres, a small island 8 miles northeast of Cancun. In 2022, Isla Mujeres saw only 20% of Cancun’s tourist numbers , which makes it a more serene beach vacation.  

Learn more: Best travel insurance

Impression Isla Mujeres by Secrets is a newly opened all-inclusive luxury resort that caters to a quieter Mexican getaway. A personal butler, four levels of infinity pools and even private boat transfers to and from Cancun are just a few of the amenities guests at the luxurious adults-only resort can take advantage of.

Here’s what it’s like to vacation at Impression Isla Mujeres by Secrets. 

What makes Isla Mujeres so special?

Isla Mujeres translates to “Island of Women,” and it is said to be where the Mayan goddess Ixchel resides. The only way to reach the island is by boat, a 15-minute ride from Cancun.

Like Cancun, Isla Mujeres has pristine beaches but with a more laid-back vibe. Think of the island as a less overwhelming, more intimate version of the tourist hub. There is a downtown square, but it’s nothing like Cancun’s party block, which I found overwhelming the last time I visited. 

Here’s what Isla Mujeres has to offer visitors: 

• On display is Isla Mujeres’ natural beauty. The island is surrounded by an azure sea so vivid it looks as if it were dyed. The calm waters invite travelers to spend most of their time there, and the island is known for flourishing marine life – it’s sometimes called the whale shark capital. If you don’t spot one of these docile sea creatures, whose population has declined more than 50% over the past 75 years, there are still plenty of fish and giant shells to see below the surface. Even the resort pays tribute to the gentle giants by being the home base for shark conservation nonprofit Saving Our Sharks Foundation. A portion of each stay at Impressions Isla Mujeres by Secrets goes to the local organization, meaning guests are supporting “marine biodiversity conservation, promoting sustainable fishing practices, conservation efforts and responsible tourism,” Erica Doyne, senor vice president of marketing and communications at Hyatt Hotels Corp., told USA TODAY.
• As for non-living sea wonders, the island is home to the Museo Subacuático de Arte , one of fewer than 10 underwater art museums worldwide. Since 2010, visitors have been able to swim among the more than 500 life-size submerged sculptures, which also add biomass to the reef system. If going below the surface isn’t your thing, you can book a tour by glass-bottom boat.
• Though the most popular of ancient Mayan temples, Chichén-Itza, is on the peninsula, Isla Mujeres has its share of cultural and historical sites. Visitors can make their way to the Mayan Temple of Ixchel, perched atop a striking seaside cliff in Punta Sur on the most southern point of the island, a short distance from the resort. On the mornings of the new year, Isla Mujeres residents gather here to greet the first rays of sunlight. 

What is it like to stay at Impressions Isla Mujeres?

Relaxing and recharging are the focal points of the adults-only resort, which opened in 2023 as the second property in the Impression by Secrets brand, run by World of Hyatt. You can skip the front desk; check-in is done on the boat. Upon arrival at the dock, guests are greeted with a welcome drink and their personal butler, who is easily reachable via WhatsApp. During my stay, I often forgot I was in Cancun and not some private island in the Caribbean (or at least, how I imagine that would be like).

The property: The ocean is the resort's centerpiece, and its vistas are prioritized, from the rooftop infinity pool to the oceanfront rooms with their private terrace complete with an outdoor hot tub. Woven throughout the property are subtle reminders of the sea and the creatures within, such as sculptures of whale sharks by Mexican artist César Menchaca using upcycled plastic and elegant lobby seating echoing the shape of a starfish. 

The property was once an abandoned hotel, but you’d never know it. Looking up, you can see how the whitewashed resort pays tribute to its location by resembling a seashell. Its cliffside location, tucked-away courtyards and archways give it a Santorini architectural feel. 

“Built into the natural landscape atop a coastal cliff, the development of Impression Isla Mujeres by Secrets was designed with purpose and inspired by a profound respect for the natural beauty and cultural richness of Isla Mujeres,” Doyne said.

A dock wraps around the 125-room resort’s beachfront, providing plenty of cabana space for guests to hunker down in and enclosing a swimming oasis. Hammocks hang off the dock, inches above the water, inviting you in for a daytime nap. 

With spring break around the corner, it'll cost two adults during the week of April 5-12 about $1,100 a night for an ocean-view room with two double beds, or one king bed and a sofa area. This rate includes a terrace, free laundry service, boat transfers, all amenities, and, of course, food and beverage. You can also use World of Hyatt points to book, and there’s a member rate.

The same week at fellow Isla Mujeres high-end resort Hotel Privilege Aluxes Isla Mujeres will run you more than $4,190 a night for an ocean-view suite, which has a large living area, food and beverage and similar amenities. (Although this seems a high rate, it is cheaper later in the year. A normal room is $1,949 in September, but there’s no terrace or promised ocean views.)

Eating well: The all-inclusive food and drink at Impression Isla Mujeres were top-notch, with eight dining options to choose from, ranging from Italian to Japanese cuisine and nine bars and lounges. My favorite restaurant was the breezy La Vista, which served Mexican fare to outdoor tables overlooking the water. 

It was my first time at an all-inclusive resort, and I indulged almost daily in the unlimited room service, with help from an in-room touchscreen tablet. If I didn’t hear the doorbell, staff would place the food in a two-way cabinet, lending to my peace and quiet.

To do: Besides the difficult choice between lounging by the pool or beach, guests can participate in robust daily programming, from wellness offerings to cultural enrichment workshops. I attended a smoke-cleansing session during sunset, and not only were the views breathtaking but I learned more about the Indigenous spiritual practice. Those who want more of a thrill can try out the four-story waterslide that empties into the ocean, go snorkeling or take one of the free bikes out for a ride. It takes only about 40 minutes to cruise the entire island. 

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected] .

What is full coverage car insurance?

T here’s an old saying that the only certain things in life are death and taxes, but for vehicle owners, the list can be expanded to include car insurance . Every driver in the United States is required to have it, though the amount and coverage requirements vary from state to state. One term you might have heard is “full coverage,” but the definition is inconsistent between insurers , and it can be confusing to figure out what is and isn’t included in the policy. Let’s take a closer look at full coverage, what it is, and what it may include.

Liability coverage is the baseline

Liability coverage is the most basic insurance available , and it’s required in all 50 states. It protects you against financial ruin for the damage you cause to others in a crash, including their property or person. The amount of liability coverage varies between states, but it’s a requirement everywhere. Though the idea is to keep you from ravaging other peoples’ property and not be able to pay for it.

What does full coverage insurance cover?

Here’s where things get tricky. There’s no legally required definition of full coverage insurance, and some insurers or agents might refer to it as comprehensive coverage. In general , full coverage includes liability, collision, and comprehensive coverage, but some insurance policies may include uninsured motorist protection, GAP insurance, and other benefits. It’s important to note that states don’t require full coverage insurance, but if you finance your car, your lender or bank may require it.

It can also be tempting to cut extra insurance coverage to save money, but doing so could leave you vulnerable to a range of expenses after a wreck, including but not limited to replacing your vehicle, repairing or replacing the other person’s vehicle, and paying for medical expenses. It’s also important to note that even if your loan doesn’t require GAP insurance, paying the small fee for coverage can be a great idea. GAP covers you for the difference between what you owe for a vehicle and its actual value, which can prevent having to make a lump sum payment after a crash to settle your tab with the bank.

How much is full coverage insurance?

Full coverage insurance and all other auto insurance costs depend heavily on you, how you drive, what you drive, and where you live. Factors like your driving record and credit score can impact your charges, and insurance companies sometimes charge more for newer, more expensive vehicles. According to Bankrate , the national average for car insurance is $2,014 for full coverage and $622 for liability. Your costs may vary wildly from that amount, but the best ways to save money on car insurance are to shop around and try to keep your driving record as clean as possible. 

• How much does car insurance cost in 2023?

What is comprehensive car insurance coverage?

Comprehensive coverage has your back for damage not caused by a wreck. This can include weather events, floods, theft, vandalism, animal damage, and other special cases. Like full coverage insurance, your lender may require that you have comprehensive coverage during a loan or lease , but it’s not required under state laws and might not be worth the money on older, less valuable car models. At the same time, comprehensive coverage is an extra layer of protection and can significantly boost your peace of mind, especially if you live anywhere near nature (hint: We all do).

What is collision insurance?

Collision insurance covers your vehicle for damage caused during a crash. That can include hitting another vehicle or a stationary object like a tree, fence, or road sign. Carrying collision insurance on newer, more expensive cars is a good idea, as the repair or replacement costs can quickly add up. You may also be required to have collision coverage while you’re paying on a loan or lease.

Other types of auto insurance

Depending on your insurer, you may have access to several other types of coverage that can bolster your financial protection after a crash. Uninsured and underinsured motorist insurance protects you if the other person in the accident lacks enough coverage for the damage they caused. Some states require it, so it’s a good idea to know where you stand. Personal injury protection covers your medical bills and sometimes lost earnings, and some states require that motorists have personal injury protection insurance (PIP).

Full coverage insurance provides solid financial protection and can save you from a desperately costly situation after a crash. Still, it’s not required and is not best for every vehicle or situation. Liberty Mutual estimates that a full coverage policy costs 64 percent more than liability coverage alone, so it’s best to understand what you need and don’t have to pay for. Most insurers allow policyholders to purchase coverage a la carte, so it’s possible to piece together insurance coverage that meets your exact needs.

What is full coverage car insurance? originally appeared on Autoblog on Sat, 17 Jun 2023 09:00:00 EDT. Please see our terms for use of feeds.