What Does It Cover and Is It Worth It?

0

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

In April 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, says Godlin, to add a layer of protection and security.

What does travel insurance cover?

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.

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.,

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.

How much does travel insurance cost?

Best travel insurance companies

SquareMouth Travel Insurance

  • Cost

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

  • Policy highlights

    While not an insurer itself, SquareMouth is a travel insurance marketplace where you can compare costs and coverage options from dozens of providers. It offers annual and single-trip policies from top providers including Berkshire Hathaway, Tin Leg and Generali.

  • 24/7 assistance available

Pros

  • Includes more than 30 travel insurance companies
  • You can compare providers side-by-side on the website
  • SquareMouth doesn’t add additional markups or fees
  • Carriers that don’t adequately address a customer complaint are removed

Cons

  • Doesn’t provide travel insurance policies of its own

American Express has standalone travel insurance policies with coverage not available as part of its usual cardholder benefits — including emergency medical and dental coverage, medical evacuation and travel accident protection in cases of death or dismemberment.

The company is known for its customizable policies, flexible rates and strong record of customer service.

American Express Travel Insurance

  • Cost

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

  • Policy highlights

    American Express Travel Insurance offers four standard plans and a “build your own” plan, with coverage options including travel interruption, trip cancellation and baggage protection. While American Express cardholders enjoy some travel protections, a standalone policy can also include emergency medical and dental coverage, medical evacuation and travel accident protection in cases of death or dismemberment while traveling.

  • 24/7 assistance available

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

  • 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

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

  • 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

Alternatives to travel insurance

Chase Sapphire Preferred® Card

  • Rewards

    Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, and $50 annual Chase Travel Hotel Credit, plus more.

  • 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 Travel℠.

  • Annual fee

  • Intro APR

  • Regular APR

    21.49% – 28.49% 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

  • Credit needed

Southwest Rapid Rewards® Plus Credit Card

  • Rewards

    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

  • Welcome bonus

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

  • Annual fee

  • Intro APR

  • Regular APR

  • Balance transfer fee

  • Foreign transaction fees

  • Credit needed

American Express® Gold Card

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 $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

  • Annual fee

  • Intro APR

  • Regular APR

  • Balance transfer fee

  • Foreign transaction fee

  • Credit needed

*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.

Is travel insurance worth it?

While government regulations 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 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 or for an extended period
  • You have an existing health condition
  • You’ve scheduled adventure activities such as skiing, bungee jumping or hang-gliding
  • 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.

FAQs

What does travel insurance cover?

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

How much does travel insurance cost?

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?

Compare and find the best life insurance

Meet our experts

Why trust CNBC Select?

For rates and fees for 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.


link

Leave a Reply

Your email address will not be published. Required fields are marked *