Travel Insurance: What Does It Actually Cover?

Travel insurance is one of those things that is easy to ignore when everything goes smoothly. You book your flights, choose your hotel, pack your bags and start thinking about the trip.

Then something goes wrong. A flight is cancelled. Your luggage does not arrive. You get sick abroad. You have to cancel the trip unexpectedly.

I have always thought of travel insurance as something you hope you never need, but you will be very glad you have if you do.

What does travel insurance usually cover?

Most travel insurance policies can include several different types of cover.

Medical expenses

This is probably the most important part of travel insurance, particularly when travelling outside your home country.

If you become ill or have an accident while travelling, your policy may cover medical treatment, hospital costs, medication or emergency transportation, depending on the policy.

But there is an important detail here: check the maximum medical cover and the exclusions before you buy the policy.

Some activities, existing medical conditions or particular destinations may require additional cover.

Trip cancellation

You may have spent a significant amount of money on flights, hotels, tours and other arrangements before your trip even starts. If you suddenly cannot travel for a reason covered by your policy, cancellation insurance may reimburse some of those non-refundable costs.

However, cancellation cover does not usually mean you can cancel your holiday simply because you changed your mind.

The reason for cancelling needs to fall within the conditions of the policy.

This is why I always recommend reading the cancellation section carefully rather than simply looking at the price of the insurance.

Delayed or cancelled flights

Depending on the policy, you may be covered for expenses caused by a significant travel delay, such as meals, accommodation or additional transportation.

There can be minimum delay periods, maximum reimbursement amounts and specific conditions, so do not assume that every delay automatically means you can claim.

For example, if your flight is delayed for several hours and you have to buy food at the airport, your policy may reimburse you if the delay meets the policy requirements.

Keep your receipts. You may need them later.

Lost, stolen or damaged baggage

If your luggage is lost, stolen or damaged in circumstances covered by your policy, you may be able to claim compensation.

This is particularly important if you are travelling with an expensive camera, laptop or other valuable equipment. A policy might have a general baggage limit, but also a much lower limit for individual items.

So if you are carrying expensive electronics, jewellery or photography equipment, check the valuables section carefully.

Baggage delays

There is a difference between your luggage being permanently lost and simply arriving late.

Some policies provide compensation if your checked baggage is delayed for a certain number of hours. This can help you buy essential clothing, toiletries or other necessities while waiting for your suitcase.

It is one of those benefits you might not think about until you are standing at baggage reclaim watching everyone else collect their suitcases.

Emergency assistance and repatriation

If you become seriously ill or are injured abroad, travel insurance can potentially cover emergency transportation, evacuation or repatriation, depending on the circumstances and the policy.

This is something I would never overlook when choosing travel insurance.

The cheapest policy is not necessarily the best policy if it leaves you with inadequate emergency medical or repatriation cover.

What travel insurance usually does NOT cover

People sometimes buy travel insurance assuming that almost anything that goes wrong will be covered.

Policies usually have exclusions.

For example, you may not be covered if:

• You travel despite government or medical advice not to travel
• You cancel simply because you no longer want to go
• You lose your belongings because you left them unattended
• You participate in an activity that is excluded from the policy
• You fail to declare relevant information when purchasing the policy
• Your claim relates to an existing condition that is excluded
• You are under the influence of alcohol or drugs when an incident occurs

The exact exclusions depend on the insurer and the policy, so these should always be checked before travelling.

A personal example

One thing I have learned from years of travelling is that the problems you expect are not always the ones that happen.

You can spend hours planning flights, comparing hotels and deciding what to see, but sometimes the biggest problem is something completely outside your control.

Imagine booking a two-week holiday with non-refundable flights, hotels and activities. A few days before departure, you have an unexpected situation that means you cannot travel.

Without cancellation cover, you could potentially lose a significant amount of money.

With appropriate cancellation cover, you may be able to recover some of those costs, provided the reason for cancelling is covered by the policy.

That is the part people sometimes forget. Travel insurance is not about getting your money back whenever your plans change. It is about protecting you against specific unexpected events listed in the policy.

So, is travel insurance worth it?

For me, the answer is usually yes.

I would rather include the cost of a good travel insurance policy in my holiday budget than worry about what could happen if something goes wrong.

Before buying, I would look at:

• Medical cover: How much is covered?
• Repatriation: Is emergency transportation or repatriation included?
• Cancellation: What reasons are actually covered?
• Baggage: What are the total and per-item limits?
• Excess: How much would you have to pay yourself when making a claim?
• Activities: Are the activities you are planning covered?
• Exclusions: Are there any restrictions that could affect your trip?
• Destination: Is the country or region covered?

Most importantly, do not wait until the last minute to look at your insurance.

Travel insurance is not the most exciting part of planning a holiday, but understanding what you are covered for can give you one less thing to worry about while you are away.

And hopefully, you will never need to use it.