After booking airfare and locking down your accommodations for that big trip, spending money on travel insurance is probably the last thing you want to do. But the additional expense of purchasing a policy could save you big time in certain circumstances, and depending on the details of your trip, it’s borderline financially irresponsible not to pick up some coverage. CNBC Select explains what travel insurance covers, when it makes sense to get a policy, and what alternatives to explore if you want some protection without purchasing insurance.
What is travel insurance and what does it cover?
Travel insurance is a type of coverage designed to protect against risks and financial losses before and during your trip. These risks often include unforeseen events like missed airline connections, delayed luggage, injuries or minor illness. The typical price of a travel insurance policy is between 4% – 10% of your prepaid, non-refundable trip costs, but you can expect to pay more (or less) than this depending on your exact policy and what it covers. AXA Assistance USA, CNBC Select’s pick for best overall travel insurance company, offers three different tiers of coverage and our runner-up, Travel Guard, also excels in providing flexible plans that work with a wide variety of travel needs.
AXA Assistance USA Travel Insurance Learn More Cost The best way to estimate your costs is to request a quote
Policy highlights AXA Assistance USA offers several travel insurance policies that include travel interruption, trip cancellation, and the option of cancel for any reason (CFAR) coverage.
24/7 assistance available Yes Pros Three tiers of plans available
Highly rated for financial strength Cons Cancel for any reason only available on highest-tier coverage Learn More View More
Travel Guard® Travel Insurance Learn More Cost
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 Yes Pros A variety of plans are available to help cover different types of trips Cons Not all products are available for purchase online Learn More View More
Trip Cancellation You usually can’t get a refund for airfare or hotel bookings if you have to cancel, which is where travel insurance with trip cancellation coverage helps. You may not get your money back from the airline or hotel, but your policy will reimburse you if you need to cancel your plans for covered reasons. Travel insurance will typically cover trips canceled because of: Unexpected illness, injury or death of a family member
Suffering an injury or illness yourself
An unforeseen natural disaster either at your point of departure or destination
Legal obligations such as jury duty
There’s also an add-on coverage known as “cancel for any reason” travel insurance (CFAR) which lets you cancel a trip and receive partial reimbursement as long as you cancel 48 hours before your scheduled departure. Flight cancellations Flight canceled by the airline? Federal law generally mandates that airlines refund your ticket cost if your flight gets canceled and you choose not to travel. If the airline delays your flight, you can possibly still get a refund, but you’ll have to take it up with the Department of Transportation and get a ruling whether the delay was “significant” enough. On the other hand, travel insurance with flight cancellation coverage will typically reimburse you for any delay lasting three to 12 hours (after 12 hours, the insurance might consider your flight canceled and reimburse you for that reason). Travel insurance also covers other prepaid and nonrefundable costs caused by the covered delay or cancelation. So, if you’ve already booked a vacation rental or activity at your destination and the airline has rebooked your next flight for the next day, travel insurance would cover the cost of your accommodation. Travel medical insurance for emergencies Travel medical insurance should not be confused with travel health insurance, which covers routine health expenses for people who frequently travel abroad. Travel medical insurance is meant for emergency medical expenses such as treating a sudden injury or evacuating you to a medical care facility. Coverage may include specific family members that are traveling with you such as your spouse, children, siblings, parents, grandparents and more. Many US health plans don’t offer coverage outside the country, so you don’t want to assume your plan will cover the cost of getting you to a hospital while abroad. Check your health insurance policy and if it doesn’t cover these types of expenses, seriously consider travel medical insurance for your next trip overseas. Missed connections You can save a lot of money on airfare if you book a connecting flight, but missing that connection can add both stress and additional expenses to your trip. Missed connection travel insurance, however, will reimburse you if you miss a departure for a reason listed in its policy. The reimbursement would typically compensate for a travel delay of three to 12 hours caused by mechanical failure or weather. Baggage insurance The possibility of your luggage being lost, stolen or damaged is another headache that a travel insurance policy with baggage insurance can cover. Baggage insurance also covers personal possessions, so you can file a claim if someone steals your belongings. However, it’s important to note that the insurance does not fully compensate you for brand-new versions of your lost items. Instead, it covers the depreciated value of your belongings, meaning the amount your luggage and personal belongings are worth now — not when you first bought them (as determined by the insurance company). There are also exclusions and caps on certain items. According to InsureMyTrip, items such as expensive jewelry, watches or high-end technology are likely worth more than the per-item limit or specific item limits of a typical baggage policy.
What does travel insurance not cover?
Travel insurance only covers you if your plans get derailed by a situation covered by your policy. If you’ve decided to cancel your trip simply because you changed your mind, you would need to find a policy that allows for CFAR coverage. You’ll typically get about 75% of your prepaid, nonrefundable trip expenses back, although terms and conditions vary by policy. Because of the variety of exclusions and terms that travel insurance providers offer, it’s essential to read the fine print so you’re aware of what your plan provides. For example, some plans don’t cover accidents that occur while taking part in activities. Also, expenses caused by a pre-existing condition, such as diabetes or arthritis, are seldom covered by trip insurance. However, some policies do cover such needs if specific criteria are met. If any of these apply to you, check for a plan that includes them and if your current health insurance covers medical expenses while traveling.
When is travel insurance worth it?
Travel insurance is worth considering in many cases when it comes to protecting your health when traveling internationally and protecting your overall trip if, for example, you’re traveling to a destination with weather-related issues. Here are a few things to consider when deciding whether travel insurance is a good idea for you. Are you traveling internationally?
Does your trip include many prepaid, non-refundable tours, day trips or activities?
Are you traveling to a remote area with limited healthcare facilities?
Does your trip involve connecting flights or multiple destinations?
Are you looking to be partially reimbursed if you cancel your trip or return home early for any reason? Overall, if all of your reservations can be canceled without penalty, then travel insurance may not be the best option for you. Also, if you have a US-based health insurance policy and you’re traveling domestically, you probably already have sufficient coverage for medical concerns.
Credit card travel protection alternatives
While travel insurance can be helpful for various reasons, many travel credit cards also offer coverage for lost luggage and delays or flight cancellations and delays. For example, the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve® offer trip cancellation and interruption insurance, as well as baggage and trip delay insurance. And the American Express® Gold Card has a *baggage insurance plan that covers up to $1,250 for carry-on baggage and up to $500 for checked baggage that is damaged, lost or stolen. Terms apply.
Chase Sapphire Preferred® Card Learn More On Chase’s secure site Rewards $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X points on all other purchases
Welcome bonus Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.
Annual fee $95
Intro APR None
Regular APR 21.24% – 28.24% variable on purchases and balance transfers
Balance transfer fee Either $5 or 5% of the amount of each transfer, whichever is greater
Foreign transaction fee None
Credit needed Excellent/Good Terms apply.
American Express® Gold Card Learn More On the American Express secure site Rewards 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
Welcome bonus Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases within the first 6 months of card membership
Annual fee $250
Intro APR Not applicable
Regular APR See Pay Over Time APR
Balance transfer fee N/A
Foreign transaction fee None
Credit needed Excellent/Good See rates and fees, terms apply.
However, credit card benefits don’t typically protect you in case you are injured or get sick during your trip, so be sure to weigh your options carefully.
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Bottom line
When trying to decide if travel insurance is a good choice for you, think about where you’re going, your planned activities and how much it’s costing you. If you’re paying for lots of prepaid, non-refundable activities, it may be worth considering investing in a travel insurance plan with sufficient coverage. 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.
*Baggage Insurance Plan coverage can be in effect for Eligible Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier (e.g. plane, train, ship, or bus) when the entire fare for a Common Carrier Vehicle ticket for the trip (one-way or round-trip) is charged to an eligible Account. Coverage can be provided for up to $1,250 for carry-on Baggage and up to $500 for checked Baggage, in excess of coverage provided by the Common Carrier (e.g. plane, train, ship, or bus). For New York State residents, there is a $10,000 aggregate maximum limit for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. For rates and fees of the American Express® Gold Card, click here.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Is Travel Insurance Worth It?
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