Travel Insurance Basics

Vawter Financial |

As we ease back into long-distance vacations, there is going to be an uneasy period where there are greater than normal numbers of cancellations, delays and (though we hope this never happens) the need for medical care in a foreign destination.   


Enter travel insurance.  A recent article on the NerdWallet website tells us that the price of a travel insurance policy ranges from 4% to 8% of the trip cost, depending on the length of the trip, the cost of medical care in your foreign destination and your age.  (The older you are, the more expensive the policy.) 


The most common benefit is trip cancellation coverage, which covers prepaid, nonrefundable reservations like flights, hotels and other bookings if the trip is cancelled because of an unforeseen event.  The covered reasons might include extreme weather, job termination, jury duty, of you incur a serious injury or hospitalization before the trip.  Due to the disruption in air travel, there may simply be situations where the airline has cancelled the flight. 


These provisions are spelled out in the contract, but if you want more coverage, there are “cancel for any reason” policies that allow you to cancel your trip for any reason and get at least a partial refund of your nonrefundable deposit.  Typically, you have to invoke the clause at least two days in advance of the trip date.  The article suggests that some travelers might back out of an upcoming trip because they’re nervous about catching the COVID virus, which would not be a covered reason under a normal policy. 


Some people already have cancellation coverage through a premium travel credit card, or they may have made reservations that are refundable.  If they’re traveling internationally, they could purchase a supplement like standalone travel medical insurance, which specifically protects you in the event of unexpected injuries or illnesses while you’re abroad. 


Which policies are best?  The ConsumersAdvocate website lists policies for each state, with links to its top-rated providers, including, Trawick InternationalSquareMouth Travel InsuranceRoamRight and General Global Assistance. and SquareMouth allow you to compare plans from major insurers in one place; the others provide their own policies.  You list the cost of your trip, your destination, number of travelers, ages and your country of residence, and the sites give you a quote.  And even if you’re not shopping for coverage, these sites also offer updated Coronavirus advisories on potential travel destinations. 




The opinions expressed in our blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this blog is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.