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Americans insure their health, their homes, their cars, and their lives, so why not their vacations? A study conducted by Princeton Survey Research Associates found that only 21% of respondents had ever purchased some type of travel insurance and only 7% said they purchase it regularly. Considering the wide array of product offerings and coverage options, this relatively unknown and underutilized market segment may be more useful than it appears.

When discussing travel insurance as a whole, it must be noted just how divergent the specific coverage options within this category can be. Although many travel insurers offer ‘bundle’ plans that offer comprehensive coverage, there are also many specialized plans that cover only one or two scenarios. One subset of coverage, often referred to as Trip Cancellation Insurance, reimburses would-be travelers for their prepaid, non-refundable fees should they have to cancel under certain circumstances. For more basic coverage, these circumstances are typically limited to the hospitalization of a traveler or a non-traveling immediate family member, unforeseen natural disasters, or legal obligations such as jury duty. More comprehensive reimbursement coverage options are available, though these premiums rise accordingly. According to cardrates.com, about 15% of credit cards (including many American Express cards and the Chase Sapphire Preferred card) come with at least some form of trip cancellation insurance, so it is wise to check with your card company before purchasing this type of policy, as there is a chance you may already be covered.

The other subset, which includes Travel Medical, Travel Accident, and Medical Evacuation Insurance, covers much more serious events such as illness, injury, or even death. This type of travel insurance is more like a substitute for an individual’s life and health insurance policies, which often do not provide coverage outside of the United States. It is important to know exactly what you are buying here, as some of these policies may cover medical but not dental care, cover accidents but not illnesses, or even refuse to pay for evacuation to an American medical facility.

With over 25 companies offering at least one form of travel insurance, navigating the market can be exhausting, even after you have determined exactly what coverage options you want. Thankfully, there are a number of comparison sites that allow you to compare the costs and benefits of plans from many of these insurers side by side. As an added bonus, some of these services will even act as your advocate should a dispute arise with the insurer, as long as you found that insurer through their selection service.


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