You’ve booked your dream vacation, but you’re not sure about buying travel insurance. Here are what travel experts advise and it may surprise you.

You’ve booked your trip to dream vacation, but you’re just not sure about buying travel insurance. After all, it seems like an added expense and how do you know which is the best travel insurance for your trip anyway?

Let’s stop right there. You need travel insurance when you travel, unless you are so wealthy you can afford your own medical expenses and possibly the expense of medical transport back home. Just like buying renters insurance, homeowners insurance, health insurance and car insurance, travel insurance covers unexpected expenses and, like others, is something you hope to never use.

We spoke with travel safety expert Phil Sylvester, who told us, “Even in countries where the medical and hospital system is considered ‘cheap,’ bills can run into many thousands of dollars for complex cases. All it takes is a vehicle accident and some serious injuries that need serious treatment.”

“And it’s not just about the bills,” says Sylvester. “Good travel insurance will also ensure you get the best appropriate treatment. Consider being injured and requiring complex hospital treatment in some remote backwater of Laos. The specialist surgeons you need are not available there, they’re hundreds of miles away in a medical center. Are you going to drag yourself onto a chicken bus with your injuries? Of course not, but travel insurance can pay for and arrange your transportation to a facility where you will get the best care available (and that might mean going all the way home rather than to the nearest city).”

Is travel insurance just about medical coverage?

Medical coverage for emergencies is perhaps the most important component of buying travel insurance. But there are really four essential parts to a good travel insurance policy:

1. Coverage of emergency medical costs and emergency medical evacuation.
2. Replacement coverage for the loss or theft of luggage or belongings in your luggage (there are typically limits for high-value items such as jewelry, computers, cameras, etc.).
3. Coverage for the cancellation of a trip or for a travel delay.
4. Coverage to recoup unexpected additional expenses such as emergency prescription drug refills, eyeglass replacement, legal assistance, etc. (check the fine print of your policy to determine exactly what will and will not be covered in every case).

“Travel insurance is for unforeseen circumstances, and sadly those circumstances often have unpredictable outcomes and immeasurable costs associated with them,” says Sylvester.

But I have travel insurance through my travel credit card

Maybe you do, but certainly, the coverage is not at the same level of individualized travel insurance coverage provided by companies who specialize in writing travel insurance such as Travelex, World Nomads or Global Rescue for example.

“The No.1 mistake people make with travel insurance is assuming they are covered — for everything. You need to check and understand exactly what is covered,” says Sylvester.

Be sure to thoroughly check the insurance provided by your credit card and determine if you’re happy with the level of coverage. Also check to see if that coverage will meet your circumstances, the type of travel you do, the activities you will undertake, AND you also meet the eligibility criteria. That last part can be tricky as some premium travel credit cards require you to purchase at least a portion of your travel on their card while some require you to purchase most of your travel, and still others require you to purchase all of your travel on their card. You’ll also want to determine if your travel companions will be covered fully too.

What should a good travel insurance policy include?

• The coverage should be global.
• It needs to cover the expenses of a medical emergency (illness or injury) up to at least $250,000.
• It needs to provide for comprehensive emergency rescue and evacuation services (Read our story, “Travel Medical Evacuation Insurance Coverage – Do I Really Need It?”)
• It needs to provide 24-hour emergency services and assistance.
• Its coverage should include reimbursement for lost, damaged or stolen items including clothing, jewelry, luggage, computers, documents (passports, etc.), and cameras.
• It should reimburse you for trip cancellations if you have a death in the family, sudden illness or other emergency that causes you to have to cancel hotel bookings, flights, and other transportation.
• Cover other emergencies, such as natural disasters or unrest in a country you are visiting that would cause you to head home early.
• And it should cover you should any company you are relying on during your vacation (cruise line, bus, train, etc.) goes bankrupt and you are stuck in another country as a result.

HITT Tip: We like travel insurance that offers options for both “cancel for any reason” (CFAR) AND “interrupt for reason” add-ons. And if you have CFAR option added, we have written about a unique airfare hack that allows you to buy a non-refundable airline ticket instead of opting for the vastly more expensive fully refundable airline ticket. This little maneuver can save you significant sums of money if you want or need a ticket refund. Read our story, “Travel Insurance Airfare Hack: Make any ticket refundable.” 

What won’t even the best travel insurance cover?

Even the best travel insurance will not cover you for being an idiot. If you needlessly put yourself in harm’s way, you can be pretty sure the insurance company will reject your claim. Nor will an insurance company cover illegal activity or you acting against the advice or instructions of local authorities.

Jump a pedestrian barrier and get hit by a car running across a busy road because you thought you saw the Pope in a café in Rome? Probably not going to pay your medical bills on that. Miss your flight in Mozambique because you’re in prison after being caught with illegal drugs? Yeah, don’t think travel insurance is going to be much help. Police order an evacuation ahead of a typhoon but you stay, or you enter the area to capture that once-in-a-lifetime selfie and get injured? TikTok, Facebook and Instagram followers might love you, but travel insurance, not so much.

Also, be VERY sure your travel insurance policy will cover you for whatever activity it is you might be pursuing on your adventure. Most standard policies specifically exclude many so-called “high risk” adventures, such as scuba diving, climbing, parasailing, etc. You might want to take a look at purchasing on-demand accident insurance that will cover most high-risk activities, even when you are adventuring close to home.

HITT Tip:  Though you are always advised to keep your valuables with you and in carryon luggage, sometimes you may have no choice but to check some items. Even gate checking may mean some valuables are no longer in your immediate control and at a greater risk for damage or theft. In the case of theft or a loss of luggage at the airport, do not forget to get a Property Irregularity Report (PIR) from the airline before leaving the airport since you will need this to file a claim. One travel insurance company we know, for example, will pay U.S. travelers a maximum benefit of $1,000 with a limit of $500 for any one article on a standard plan and up to $3,000 total with a per-item limit of $1,500 on a premium plan — still not good enough to replace both a stolen or damaged high-end laptop and a camera, but better than nothing. Read our story, “9 Tips to Help You Keep Your Valuables Safe When Traveling.” [/box]

Even the best travel insurance will not cover you for a “loss of enjoyment” on your planned holiday. “This is the most contentious aspect of travel insurance, and misunderstanding of this (or poor communication by the industry) is the leading reason for complaints,” Sylvester says.

Travel insurance is insurance against a loss, it is not compensation for a trip not going as you perfectly imagined.

“A typhoon causes your flight to be canceled and the holiday island resort is closed due to damage, and pre-paid excursions are canceled. That would be covered,” says Sylvester.

“A few days later flights have resumed, the resort has opened but there’s damage on other parts of the island, the beach is strewn with debris and the weather is not sunny. The excursions are running but the beauty spots you’d expected to see are damaged,” he says. “The vacation is no longer everything you had hoped it would be. Travel insurance does not cover this — the services you pre-paid for have been provided.”