Types of Travel Insurance
There are multiple types of travel insurance, and the type you choose will determine when you can use your benefits. Most travel insurance companies include multiple protection types rolled into a single package plan. You can customize your travel insurance with riders that extend coverage in specific areas.
The following are some of the most common types of travel insurance you’ll encounter.
Trip Cancellation or Interruption
Travel cancellation insurance reimburses you for prepaid travel expenses if you’re forced to cancel your trip. This coverage can help you pay for nonrefundable expenses, such as air travel and prepaid excursions.
Typically, travel insurance policies include a list of covered circumstances when you are eligible for compensation. To qualify for a trip cancellation reimbursement, your travel insurance provider must cover the situation that forced you to cancel your trip.
Some of the most common examples of situations when you can use your trip cancellation coverage include:
- A legal obligation such as jury duty
- Death of a family member or travel companion
- Serious injuries or medical conditions that make it impossible for you to travel
- Unforeseen natural disasters
Your travel insurance provider will require you to submit proof of a covered circumstance to claim your reimbursement. For example, if you must cancel your trip to attend a family member’s funeral, you might only qualify for reimbursement after submitting a copy of your loved one’s death certificate to your insurer.
Travel insurance also includes coverage for trip interruptions. If there’s an emergency and you’re forced to return home from your trip earlier than expected, trip interruption coverage reimburses you for the portion of your trip you couldn’t enjoy. Trip interruption coverage can also help cover increased travel costs incurred when you must rush home on short notice.
Travel Medical Insurance
Travel medical insurance provides reimbursements for emergency medical services you receive abroad. Only emergency medical expenses are covered under travel insurance — elective procedures and planned medical tourism excursions do not qualify for coverage.
Unlike your standard health insurance plan, your travel insurance will not pay for your treatment at the time of service. You must submit an invoice with proof of any payments made to your travel insurance provider, which will reimburse you up to your policy limit if you qualify.
Your travel insurance may also reimburse you for the cost of last-minute return travel if you’re severely injured and need to cancel the remainder of your trip.
Cancel for Any Reason
As the name suggests, cancel for any reason (CFAR) travel insurance allows you to claim a reimbursement for pre vacation paid expenses for any reason. CFAR insurance doesn’t require you to provide documentation of extenuating circumstances to qualify for a reimbursement, so you can use your benefits any time before you travel.
CAR insurance is sold as an add-on in most cases. This means you can add CFAR coverage for an additional fee when you purchase your standard travel insurance policy. However, you can usually only buy CFAR coverage for a few weeks after you enroll in coverage.
CFAR insurance will only cover up to a stated percentage of your total trip cost. For example, if you’re insuring a $5,000 trip to France and you sign onto a CFAR policy with an 80% reimbursement limit, you’d receive a maximum of $4,000 you should use your coverage.