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Why, when and how to buy trip insurance post Covid

May 11, 2022

Look, I am a travel cheapskate. I’m not forking over extra cash for another quarter inch of legroom. My garden view is just fine, thanks. But recently, I’ve started insuring my international trips. Why? For one, my city is impacted by increasingly horrific hurricane seasons. But mostly it’s because Covid adds too many uncertainties to trip planning. What if I get sick and have to quarantine overseas? What if my travel buddy has to cancel because they catch it? I recently did a deep dive into the topic for a magazine piece. And here’s what I tell friends when they ask whether to buy trip insurance. 

What is trip insurance?

It’s an insurance policy that refunds pre-paid travel expenses should your trip be canceled or interrupted for a list of permissible reasons. (At the start of the pandemic, that list didn’t include “global pandemic” and a lot of travelers got screwed. But, thankfully, that’s changed for many policies.) Trip insurance can also include coverage for things like lost luggage, emergency evacuation, overseas medical care and more.

How does it work?

In some ways, it’s like car insurance: You pick and choose what coverages to include and to what level. And, you have to purchase it before you need it. (For example, before you depart, before you test positive for COVID and/or before there’s a named storm in the Gulf of Mexico, if you’re traveling to storm-prone destinations.) With trip insurance, you pay your expenses in real time and then file for reimbursement afterward. 

How much does it cost?

Expect to pay between 4-10% of your pre-paid travel cost when you buy trip insurance. 

When should I insure?

I insure when it’s a high-dollar vacation and many of my expenses are non-refundable. So, if I’ve booked a 2-week tour through Croatia with a no-cancellation policy, I’m insuring it. If I’m visiting my mom for a week in Florida, it’s not worth it. My airfare isn’t costly, and Mom has a very generous refund policy 😉 

How do I choose a policy?

Be prepared to spend some time on this. You really have to read the fine print. Squaremouth has a great UI for comparing insurance plans across multiple companies. And InsureMyTrip.com may be a little clunky, but it’s been around for two decades and boasts 100,000+ user reviews. 

What coverages do I look for?

There are three main types of coverage that pertain to traveling during Covid. Pay extra close attention to what triggers this coverage in your policy.

  • Travel Medical: This covers local medical costs and hospitalization if you become ill on your trip. FYI, some destinations require travelers to show proof of this type of coverage upon arrival. 
  • Trip Cancellation: This generally refunds up to 100% of the non-refundable costs you’ve already paid for your trip. Be sure your policy includes you, a family member or a travel companion catching Covid as a “cancellation” trigger. 
  • Trip Interruption: This generally refunds up to 150% of your non-refundable, pre-paid costs. Be sure the “trip interruption” portion of your policy pays out if you test positive abroad and can’t return to the U.S. as scheduled. That way, you won’t be stuck footing the entire bill for extra hotel nights and a new flight home on your own. 

What about the other coverages?

Emergency medical evacuation is great if you lose a limb rock climbing. But if you catch Covid, they can’t bring you back into the US until you test negative or quarantine anyway. Lost baggage is generally hard to take advantage of, and some credit cards include it as part of your perks. When I buy trip insurance, I don’t worry about maxing out these coverages. But you do you 😉

What’s not covered? 

Lots. It’s the nature of insurance. If your destination closes its borders to travelers, most policies will not kick in. Likewise, if there’s a spike in Covid cases or a new CDC warning against visiting your destination, nada. 

What are CFAR policies? 

There are policies that will let you Cancel For Any Reason, even if you’re just freaked out and don’t want to go. These are expensive, and they only refund between 50-75% of your costs. Don’t get them. 

Where can I read more about trip insurance?

My personal fave, Nerd Wallet, breaks down trip insurance in much more detail. And Consumer Reports has an FAQ page about trip insurance that includes reviews of insurers. 

The caveat here, of course, is that every policy is going to be a little different. Every insurer handles claims differently. The advice above is how this generally works and how I buy trip insurance. And, fortunately, I’ve not yet had to make a claim. Good luck and safe travels!

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