Travel Insurance: A Complete Guide

Travel Insurance: A Complete Guide

What does it cover, where to buy it, do you really need it, single or multi-trip... Learn everything you need to know about travel insurance!

11 min read
The ClaimCompass Blog
Thomas Busson
Thomas Busson
Tarifa, Spain

When you’re planning a vacation or a business trip abroad, you first book your flight tickets and accommodation, right?

But what about travel insurance? Do you even consider it?

Since you’re here, I assume that it DID cross your mind at some point.

There’s no denying that travel insurance has a bad rep.

It’s that thing you buy while hoping you won’t need it.

It’s that thing you buy and up not needing when your trip goes smoothly (which happens most of the time).

It’s also that thing you hate paying for, but you’re infinitely glad you did when you do need it.

That being said, not all trips require travel insurance!

In this post, we’ll answer your most burning questions:

  • Do you need travel insurance?
  • What does it cover?
  • Where to buy it?
  • Is it worth the price?

Let’s dive in!

Disclosure: Bear in mind that some links in this post are affiliate links, and if you go through them to make a purchase, we will earn a commission at no extra cost to you. Keep in mind that we link these companies because we believe in the quality of their service.


Are you looking for travel insurance for your trip? With Heymondo, tailor coverage to your need, get 24/7 assistance 365 days a year, and say no to out-of-pocket expenses when things go awry!


Do I Need Travel Insurance?

First of all, unless stated otherwise by your airline or tour agency, travel insurance is NOT a legal requirement.

What travel insurance does is minimise financial and health risks when you’re travelling overseas and offer you peace of mind.

Your potential loss varies based on the proportion of your trip that is prepaid, whether your airline ticket is refundable, your health condition, your destination, the level of coverage you already have with your other insurances.
I would argue that (almost) all travellers need travel insurance. It’s just a matter of choosing the right cover for you and your trip.

When should I buy travel insurance?

There are situations for which getting travel insurance is a no-brainer. When you’re planning a trip somewhere remote, it’d be irresponsible to leave without dedicated coverage.

Often, the situation warrants travel insurance but people are reluctant to pay the price because, “what are the odds of anything bad happening, right?”. And most of them indeed would have paid for nothing - but 100% of those who didn’t regret it. Those travellers are usually:

  • People who leave on an organized tour which involves prepaid expenses
  • People who travel with valuables
  • People whose health isn’t at its best (especially those with pre-existing conditions)

When wondering whether you should buy travel insurance purely based on your destination, common travel advice recommends travel insurance to people heading out of Europe and the United States. But even when travelling to Europe and the USA, getting travel insurance is a good idea. Perhaps even more so sometimes, considering that medical bills are higher than in the rest of the world.

In Europe, local authorities generally recommend travellers to apply for a European Health Insurance Card (EHIC). While this isn’t a substitute for travel insurance, it does provide coverage for emergency medical care in public hospitals (the equivalent of an NHS hospital in the UK). We still recommend that you consider purchasing separate travel insurance for more ample protection.

When can I skip travel insurance?

Domestic travel is perhaps the only type of trip for which travel insurance isn’t necessary. More often than not, you already have medical insurance that will take care of your expenses at home. People also spend less on domestic trips than international travel, which means that the perspective of financial loss isn’t as daunting.

Most credit card providers also include some form of travel insurance as a perk, rendering any complementary insurance redundant. In particular, several cards offer protection against flight cancellations and trip interruptions, so if that’s the main reason why you were considering buying insurance, you can skip it. Not to mention that if the airline cancels your flight, knowing your passenger rights is usually enough: ClaimCompass helps you claim compensation for your disrupted flight.

Finally, if the only reason you’re considering purchasing travel insurance is to keep your options open and potentially cancel your trip at the last minute, you shouldn’t buy it. In that case, try to book a hotel room with a free cancellation policy. For air tickets, check your airline’s cancellation policy: you may be able to cancel your tickets for free.

What Does Travel Insurance Cover?

Travel insurance policies state the provider’s level of coverage in 5 areas:

  • Trip disruptions
  • Flights
  • Medical
  • Evacuation
  • Luggage

In addition to those insurance basics, you may purchase complementary insurance to cover specific concerns such as:

  • Personal liability
  • Identity theft
  • Political evacuation

More often than not, you would buy insurance as a package which includes several of the above, rather than purchase each of them individually (say, only flight insurance, or only medical and evacuation insurance).

Comprehensive insurance packages include protection for all areas above, as well as additional coverage in the event of flight disruptions like flight delays, missed connections, and changes of itinerary.

Let’s get into a bit more details - but be warned: those are only guidelines. The details of each policy vary from one provider to the next. Even within the same company, the level of coverage changes based on the type of insurance that you purchased.

Trip cancellation insurance

This type of insurance allows you to get a refund on the expenses you made in anticipation of your trip, like upfront payment for a tour or accommodation at your destination.

It kicks in when you decide to cancel your trip and covers the non-refundable losses and penalties that you incur as a result.

However, for the insurance to kick in, you do need to interrupt your trip for a valid reason. Those acceptable motives include, for instance, the sickness of your travel partner, a family member or yourself; the bankruptcy of your tour agency or airline; an emergency at home that prevents you from leaving.

This insurance also comes in handy when you have to interrupt your trip. This may happen if you have an accident during your trip. For example, if you get sick on day 2 of the tour that’s supposed to last for a week, you may get a refund for the portion of the trip that you cannot complete.

Medical insurance

Most people already have medical insurance as part of their country’s healthcare system, whether they travel or not. However, those insurances rarely have full coverage when you’re going abroad. Before purchasing additional coverage, contact your medical insurance provider and inquire about the extent of their coverage overseas.

Even if your usual health insurance company does offer some protection, consider supplementing it with additional medical cover. It will usually complement whatever your usual health plan doesn’t. That’s called “secondary coverage”; primary coverage covers your expenses up to a certain amount.

Because medical bills (especially hospital ones) are usually expensive, it’s common for your medical travel insurance provider to work directly with the hospital to handle bills - but hospitals typically don’t, so if you forego that additional insurance, you’ll likely need to pay upfront first, and get reimbursed later. Whatever the case may be, make sure to contact your insurance provider as soon as you know you’ll have medical expenses abroad.

You should definitely buy medical travel insurance if you’re heading to a destination that your country has determined to be at risk, because your typical insurance would likely not kick in.

Flight insurance

The type of protection you get with flight insurance is extremely variable from one insurer  to another. For some, it’s little more than a rip-off, since it acts as life insurance in the event of a plane crash. For others, it includes protection against flight cancellations and delays, as well as involuntary boarding denials.

Keep in mind that in most cases, flight insurance doesn’t cover luggage issues. If you didn’t purchase a comprehensive package that also includes luggage insurance, you won’t be refunded the value of your baggage.

Evacuation insurance

Evacuation insurance covers the cost of getting you to the nearest location where you can receive appropriate medical treatment should an emergency arise.

It’s one that you should definitely consider if you’re travelling to a remote destination. However, make sure to read the fine print if you’re planning some extreme sports activities such as bungee-jumping, skydiving, or even scuba-diving, skiing, and other winter sports: some insurance carrier will cover the costs of getting you to the nearest hospital if you have an accident during these activities, but most won’t and you’ll have to purchase additional sports-adventure coverage

Keep in mind that the cost of evacuating you because of a medical emergency may skyrocket, since in some cases, it is done by helicopter or private jet. Especially if you need repatriation instead of a “simple” transit to the nearest hospital.

This is NOT insurance that all travelers should purchase. But if you’re heading to an isolated place with difficult access to proper medical facilities, examine whether it’s worth getting coverage with your insurance carrier.

Luggage insurance

Most comprehensive travel insurance policies cover delayed, damaged, and lost luggage - because unfortunately, it happens quite often.

The airline already offers some form of protection in the event of a baggage issue, but their liability limit is rather low. If you’re travelling with particularly valuable items, consider additional luggage insurance. If it isn’t included in your comprehensive package, you may buy it from the airline.

What if you already have homeowner insurance? Your personal possessions are generally covered, no matter where you travel. But it’s still worth considering additional coverage for the items that are NOT included in your homeowner policy. Deductibles are also covered by luggage insurance. More generally, if the upfront expenses aren’t too expensive, don’t get travel insurance.

Does travel insurance cover flight cancellations?

You need to check with your insurance provider as each has their own policy on the matter, but as a rule of thumb, you are not covered when the airline cancels your flight.

You may buy cancellation cover in case this happens as a complementary to your comprehensive package. Flight cancellation insurance is sometimes included as a perk of your credit card.

But keep in mind that you may not need travel insurance if your flight is cancelled: in Europe, you can get up to 600€ per passenger in compensation for your cancelled flight, if the airline was responsible for cancelling your flight.

Does travel insurance cover pandemics like coronavirus?

The 2020 COVID-19 pandemic has led insurance providers to adapt their policies. Most of them now specify explicitly whether medical expenses or flight cancellations caused by coronavirus are covered.

In general, however, you won’t be covered when travelling to a destination that the national health authority of your country has deemed at-risk because of the coronavirus outbreak and for which they have advised against non-essential travel.

Many countries have eased lockdown and other travel restrictions, but new policies regarding coverage of expenses incurred by the pandemic change as fast as your travel plans in those troubled times.

Not all is lost, though! You may get a full refund (or a voucher) if the airline cancelled your flight because of the coronavirus pandemic.

Where to buy travel insurance?

There are plenty of travel insurance carriers out there, so make sure to choose one that cares for YOUR need. Consider factors such as:

  • Your destination
  • The length of your trip (an annual policy may be preferable to single-trip)
  • The type of trip you’re planning
  • Your age
  • Your medical condition
  • How many people need to be insured
  • Whether you’re looking for insurance for a single trip or yearly coverage

Note that travel agents may sell you travel insurance, but they are not “insurance agents”: if you need to contact your insurance, be it for a question or because you actually need their services, contact the insurance directly - not the travel agent who sold you the insurance.

At ClaimCompass, we usually recommend Heymondo. Getting a quote with them is fast and easy; they offer 24/7 assistance; coverage is customized; they pay for your expenses rather than let you incur out-of-pocket expenses. We’ve found that with their app, Heymondo offers the peace of mind that we’re all looking for when going on a trip, be it:

Of course, feel free to do your own research and compare insurance providers to find the one that’ll work for you!

Some providers specialize in annual multi-trip cover, while others will serve you best with a single trip policy. Some specialize in insuring you for specific destinations, while others provide coverage for worldwide travel. Backpackers on a gap year may prefer one insurer over another that is favored by families going on a tour.

In any case, be sure to be mindful of the policy wording and to read the fine print. Consider getting travel insurance quotes from different providers before purchasing anything.

Is Travel Insurance Worth the Money?

As the saying goes, “you can’t afford to travel if you can’t afford travel insurance”.

With insurance, you need to consider the worst-case scenario options. Medical costs are rising worldwide and easily reach the thousands, if not tens of thousands of pounds, euros, or dollars.

If you want to avoid out-of-pocket expenses and having to submit a travel insurance claim when you’re back, travel insurances that take care of your expenses without asking questions first can be a major asset to your trip, largely contributing to your peace of mind. This is not negligible when you have to pay hefty hospital bills, for instance.

Travel insurance prices vary based on several criteria, but the main ones are:

  • The desired level of cover
  • The age of the insured party

As a rule of thumb, the more coverage and the older the policyholder, the more expensive the insurance package.

Conclusion

According to the Association of British Travel Agents (ABTA), 1 in 5 Brits has needed some kind of medical treatment while abroad. In 2017, the Association of British Insurers (ABI) estimated the cost of medical treatment overseas at over £1,300, and this number has undoubtedly increased since then.

And yet, over 10 millions travelers leave without proper travel insurance.

Considering how easy it is to modulate your travel insurance to have it tailored to your needs, I’d say that it’s wise to consider extra cover as one of the most important expenses of your trip, if only for the peace of mind that it gives you. Once you’ve purchased it, you can fully enjoy your trip without having to worry as much.