How to Choose the Best Travel Insurance for Your Next Trip

All policies come with exclusions and limitations you should be aware of so you know you're spending your money where you need it the most. When it comes to travel insurance, one size certainly doesn't fit all. Different policies cater to various needs.

Before you begin searching for travel insurance, look at your homeowner's policy, car insurance policy, and credit card to see if you have any coverage already available and if you do, note what it covers.

For example, your homeowner's policy may cover theft, your car insurance may cover car rentals, and your credit card may cover trip cancellation and baggage delays.

Then, consider what other coverage you might need for financial protection in case something goes wrong.

Types of Travel Insurance

Trip cancellation or trip interruption insurance

Trip cancellation insurance and trip interruption insurance can be lifesavers if your trip is halted due to unforeseen events.

We had a big road trip through Canada organized when my mother passed away. Sending a death certificate to hotels and the car rental agency worked to get us all our money back, along with condolences.

On the other hand,  we recently had to cancel a hotel because of a medical issue that popped up. Not even a doctor's note or medical report would get us our money back. So 'ya never know! (Guess what hotel we're not staying at again!)

We never bothered with travel insurance when we were younger, but starting in our mid-50s, we've added it when we travel, especially when we travel out of the U.S. Stuff happens. 🫤

Trip cancellation coverage allows you to cancel your trip for a covered reason before the trip begins. This can include things such as a medical emergency (you'll need a doctor's letter), a natural disaster, or legal obligations. Trip cancellation insurance also typically provides coverage due to weather or the accidental death of you, your traveling companion, or a family member, among other things.

On the other hand, trip interruption insurance provides coverage once you've started your trip. For example, if you become ill or injured, and the doctor says you need to return home, or a disaster causes your trip to be canceled.

Cancel for Any Reason insurance (CFAR)

This type of coverage can be a game-changer if you want maximum flexibility. CFAR insurance partially reimburses you if cancel your trip for any reason at a set time (usually 48 hours) before the trip starts.

For example, you may learn about a new grandbaby making its appearance, and you've paid for your trip. Or let's say you have a cruise planned to Alaska June 20-27, and you win an all-expense paid trip to London on Wheel of Fortune for the exact same dates. (Go, you! 🙌)

With CFAR coverage, you would receive back a portion of your prepaid expenses, usually 60- 75%. This type of coverage adds quite a bit more to your costs—an average of 50%—but it provides great peace of mind that you'll have financial protection no matter what.

As you review various travel insurance providers, you may also see "Interruption for Any Reason" insurance. This is similar insurance but covers events after you've started on your trip. For example, you could get a last-minute deal on an inside cabin on a cruise ship and find out you have claustrophobia. Or you decide to visit Bali and realize you can't deal with the humidity.

Travel delay insurance

Have you flown lately? Oy! Gone are the days of airlines offering you a ride to a nice hotel to stay overnight while they fix the plane.

Travel delay insurance typically covers a hotel room, food, and transportation to your hotel or home if your flight is delayed.

Missed connection insurance

Imagine starting your exciting (and expensive) holiday by missing your connection at the airport or arriving at the dock only to wave goodbye as your cruise ship leaves the harbor.

Missed connection insurance covers you if miss a connection because of one of the reasons covered in the policy and need to catch up to a tour or cruise.

Unfortunately, things happen. It takes longer to get through security than you thought. The plane has mechanical problems. There is a weather delay. You can't clear customs in time to make your transfer when you arrive.

Emergency travel medical insurance

With the rising cost of health care, many insurance companies are canceling or cutting back their coverage for care outside the U.S. And as noted above, if you're 65+, you have virtually no coverage outside the U.S. (Yep! I know, you probably read that earlier, but it's so important, I need to repeat it.)

Make note of what is covered in your policy and what your portion of the medical expenses will be. Are doctor visits covered? Hospitalizations? Lab tests? Medication? How much will you pay for each? What is the limit on medical emergencies?

If you're traveling overseas and your U.S. policy does offer coverage outside the U.S., note how much of the bill you will have to pay before you're reimbursed.

In most cases, without travel insurance, you'll need to settle the bill first, then submit receipts to your insurance company for reimbursement. That can add up to quite a bit if you have a serious illness or injury, especially if you need to be hospitalized.

Now's the time to read the fine print to see if there are pre-existing conditions that aren't covered. These vary from company to company, and in some cases, you may be able to get a waiver or your pre-existing condition.

Evacuation and repatriation insurance

Imagine you're on your dream vacation, and you end up suffering a stroke from a pulmonary embolism. (Don't forget to wear your support hose on the plane!)

Guess how much it costs for an emergency evacuation to a hospital or to be brought back home? Figure at least $100,000! A friend broke his leg in Italy recently and was advised not to put any weight on it for 6 weeks. Thankfully, he had the proper insurance, as it cost $27,000 just for the medical attendant to fly with him.

Medical evacuation insurance covers transportation to the closest hospital that provides suitable treatment and transportation home if your medical condition requires it. It also covers the cost of travel for a companion, as well as a medical escort if that's needed. We almost always add this to our coverage when we're outside the U.S.

Baggage and personal belongings insurance

Losing your luggage can be a nightmare. I know! Let me not bore you with the story of how we had to wear the same clothes for 3 days in the jungles of Brazil. Whuuff!!👃

As we all get older (and wiser!), we usually start traveling with less luggage. So if something does go missing, it's a bigger impact than if we had another suitcase to dig into.

You'll want to be sure your policy covers lost and delayed baggage and personal belongings and note any limits or restrictions.

Buyer Beware - Policy Exclusions and Limitations

Take the time to read what's covered and what's not in detail so you understand what you're buying. Know what is and what isn't covered. Benefits differ between policies, and you want to choose the best plan for your next trip.

For example, there may be restrictions for certain pre-existing medical conditions, extreme sports, and geographical limitations. The policy may not cover your trip if it's canceled or interrupted due to strikes or terrorism. And it may not cover your tour operator going out of business. 😱