Travel Insurance Explained: When It’s Worth It and What You’re Covered For
*Updated October 28th, 2025
Even the best-planned trips can unravel due to illness, weather delays, lost luggage, or emergencies far from home. Travel insurance exists to protect you from those unexpected travel risks and the financial fallout that comes with canceled flights or medical emergencies abroad. This guide to travel insurance explains how travel insurance works, what it covers, when you truly need travel insurance, and how to choose the right insurance plan for your trip.
What Is Travel Insurance?
Travel insurance is a type of insurance product that provides financial protection and emergency support before or during a trip. A travel insurance plan often includes trip cancellation and trip interruption coverage, medical coverage, baggage insurance, and 24/7 assistance services to help travelers during urgent situations.
Most travel insurance policies are either:
• Primary coverage, where the travel insurer pays first
• Secondary coverage, where your regular health insurance or other providers pay before reimbursement
Either way, travel insurance protects travelers from major out-of-pocket costs that would otherwise ruin a trip.
What Does Travel Insurance Cover?
There are several types of travel insurance designed to address common travel problems. While travel insurance coverage varies by insurance company, most comprehensive travel insurance policies include:
Trip Cancellation and Interruption
If you need to cancel the trip before departure due to a covered reason, trip cancellation benefits help you recover prepaid, nonrefundable travel expenses such as flights, tours, and lodging.
If you must return home early, trip interruption protection reimburses unused portions of travel plus transportation costs to get home.
Covered reasons often include:
• Sudden illness or injury
• Death in the family
• Job loss or required work duty
• Severe weather preventing travel
• Certain travel accidents
Emergency Medical and Evacuation Coverage
If you experience medical emergencies abroad, travel medical insurance helps pay for medical care, hospital stays, and prescription drugs. This matters because health insurance doesn’t cover many international medical costs.
In serious cases, medical evacuation benefits cover transportation to a medical facility able to treat you — a service that can cost tens of thousands of dollars without travel insurance.
Baggage and Travel Delay Coverage
If your luggage is lost, stolen, or delayed, travel insurance coverage reimburses replacing essential personal items.
Travel delay benefits help with meals, hotels, and transportation if your flight is delayed long enough to disrupt your plans.
Other Standard Protections
Many plans include:
• Rental car protection
• Travel document replacement
• 24/7 global travel assistance
These benefits help smooth out trip disruptions when you need quick solutions.
When Do You Need Travel Insurance?
Not everyone needs travel insurance for every trip. But it offers major value in situations such as:
High-Value Trips
If you’ve prepaid for a luxury itinerary, cruises, tours, or group trips, trip cancellation coverage can prevent major financial losses.
International Travel
Most medical insurance does not cover treatment abroad, and medical evacuation costs can be extreme. Some countries even require you to buy travel insurance for entry.
Pre-Existing Medical Considerations
If you have a pre-existing medical condition, a policy with a pre-existing condition waiver may be essential to ensure insurance covers related medical treatment.
Adventure or Risk-Prone Travel
Travel to remote or politically unstable areas increases the chance you’ll need emergency medical or interruption insurance.
When You Might Not Need Travel Insurance
Some travelers can skip coverage if:
• All bookings are fully refundable
• Your credit card includes built-in travel insurance
• You’re taking a low-risk road trip with minimal prepaid expenses
Still, always review your travel benefits from other sources to ensure you’re adequately protected.
How Much Does Travel Insurance Cost?
Travel insurance cost is typically 4%–10% of your total trip cost.
Pricing primarily depends on:
• Age of travelers
• Trip length and destination
• Total trip cancellation exposure
• Health status and risk factors
• Type of coverage selected
For example:
• Medical-only policies average under $100
• Comprehensive travel insurance plans average $200–$500
• Cancel for Any Reason upgrades can increase premiums by 40%–50%
Older travelers often pay more due to higher likelihood of claims.
What Travel Insurance Might Not Cover
Even the best travel insurance has limits. Common exclusions include:
• Canceling simply because you changed your mind
• Extreme sports or dangerous activities (unless named in the policy)
• Emotional stress without documented illness
• Pre-existing medical issues not disclosed
• Known storms or events when buying the policy
When in doubt, ask the insurance provider to explain what circumstances are covered by travel insurance and which may not cover your situation.
How to Choose the Right Travel Insurance Plan
Picking the right insurance plan comes down to matching coverage with your needs.
Tips include:
• Compare travel insurance companies and read reviews
• Look for policies that offer trip cancellation and interruption benefits
• Consider extra medical coverage for international travel
• Check how an insurance company handles claims
• Buy travel insurance soon after booking to maximize benefits
If you’re unsure, an agent or travel advisor can help get travel insurance that fits your destination, health needs, and budget.
Travel Insurance FAQs
Does travel insurance generally cover COVID-19?
Most policies now treat COVID-19 like any illness, but terms vary.
Can I cancel for any reason?
Yes — but only if you purchase Cancel for Any Reason coverage.
Is travel insurance worth it for domestic or international travel?
International — almost always. Domestic — depends on your risk level and trip value.
How do I buy travel insurance?
You can buy travel insurance online from reputable insurers, through airlines when you buy travel, or via major travel insurance companies like AIG Travel.
Final Takeaway: Why Consider Travel Insurance?
Travel insurance helps protect your financial investment and provides support during stressful disruptions. It ensures you won’t pay out-of-pocket for medical emergencies, last-minute itinerary issues, or lost luggage far from home.
If you’re planning a big adventure — whether domestic or international travel — consider travel insurance as safety net coverage that keeps the trip on track.
Before you go, compare quotes to find insurance options that match your destination, trip value, and comfort level. The right travel insurance policy can turn an unexpected travel disaster into a manageable hiccup, keeping you focused on enjoying the journey ahead.