fbpx
Call Us Now!
(833)819-5009

Travel Insurance: Do You Really Need It, What It Covers and When It Is Worth It?

Corey Elsasser
11 December 2025
Travel Insurance - Banner Image for What is Travel Insurance and Who Should Get It Blog

Travel always involves some risk. Flights get canceled, luggage goes missing, people get sick, and storms or strikes can derail your plans with little warning.

Travel insurance is meant to absorb many of those financial shocks so you do not have to handle them alone. You might skip it for a simple, flexible weekend trip. But for expensive or international travel, it can be the difference between an annoying delay and a serious financial hit.

Table of Contents

What Is Travel Insurance in 2025?

Travel insurance is short term coverage that protects you for a specific trip, or for multiple trips within a set period. Most policies focus on one or more of these areas:

  • Trip costs you already paid and cannot get back
  • Emergency medical care and evacuation while you are away from home
  • Lost, stolen, or delayed baggage and personal items
  • Travel delays and missed connections
  • Accidental death or serious injury while traveling
  • Special risks such as rental cars, cruises, or adventure sports

In 2025, most policies are sold as:

  • Comprehensive or “package” plans that combine many coverages
  • Travel medical and evacuation plans focused on health costs and transport
  • Annual or multi-trip plans for frequent travelers
  • Add-ons for specific risks, such as Cancel For Any Reason (CFAR) or adventure sports

The key idea: you pay a relatively small premium to protect yourself from losing a much larger amount if something goes wrong.

What Does Travel Insurance Usually Cover?

Coverage varies by company and plan, so you should always read the policy wording. The sections below summarize what is common in the market in late 2025.

Trip Cancellation and Trip Interruption

These protections apply to prepaid, nonrefundable trip costs, such as flights, tours, hotels, and cruise fares.

Trip cancellation helps when you have to cancel before departure for a reason listed in the policy. Typical covered reasons (which can vary by insurer) include:

  • Serious illness or injury to you, a travel companion, or a close family member
  • Death in the family
  • Certain natural disasters affecting your home or destination
  • Jury duty or certain work conflicts, such as an involuntary layoff
  • Your travel supplier going bankrupt or defaulting, when that supplier and benefit are listed in the policy

Important: Not every plan covers supplier bankruptcy or default, and when it is covered there are often timing and other conditions. Always check the policy details.

Trip interruption helps when you must cut your trip short for a covered reason. It can:

  • Reimburse the unused portion of your trip
  • Pay for extra transportation to get you home or to catch up with your group

Many plans also include trip delay coverage. This can reimburse meals, lodging, and essential items when you are stuck for a certain number of hours due to a covered delay, such as severe weather, airline mechanical issues, or certain strikes.

Emergency Medical Care and Medical Evacuation

For many travelers, this is the single most important part of a policy.

  • Many U.S. health plans have limited coverage outside the country or treat care abroad as out-of-network.
  • Original Medicare generally does not cover routine care outside the United States, with only narrow emergency exceptions.
  • Some employer and ACA marketplace plans offer emergency coverage abroad, but limits and rules vary widely, so you must check your specific plan.

A good travel medical policy typically includes:

  • Emergency doctor and hospital care
  • Prescription drugs during the trip
  • Emergency dental treatment for injury
  • Medical evacuation to the nearest suitable facility or, when medically necessary and covered, back home

Many experts now suggest at least $100,000 of emergency medical coverage and $250,000 or more for evacuation, especially for cruises or remote destinations where evacuation is complex and expensive.

Some policies also:

  • Offer coverage for pre-existing conditions if you buy the policy soon after your first trip payment and meet set conditions
  • Cover long trips, such as several months abroad, or multiple trips over a year
  • Provide a 24/7 assistance line that can help locate doctors and coordinate care

In practice, insurers and their assistance partners sometimes arrange direct payment to hospitals, especially for serious emergencies. However, in some countries you may still need to pay upfront and seek reimbursement later.

Baggage and Personal Belongings

Airlines and other carriers have limited responsibility when your bags are delayed, damaged, or lost.

In the United States, the Department of Transportation sets a minimum liability limit for checked baggage on domestic flights. As of early 2025, airlines can cap their liability at a maximum of $4,700 per passenger on U.S. domestic flights. They are allowed to pay more, but they do not have to.

Key points about baggage coverage under travel insurance:

  • Policies can reimburse you for lost, stolen, or damaged baggage and personal items, often after any airline compensation.
  • They can also cover essential items you must buy when your bags are delayed longer than a set number of hours.
  • Coverage usually has per-item limits, overall maximums, and sub-limits for electronics, jewelry, and sports equipment.
  • You typically must report the loss quickly (for example, to the airline or local police) and keep receipts for claims.

This part of a policy is especially useful if you travel with laptops, cameras, or specialized gear. For high-value items, you may also want separate coverage under a homeowners, renters, or valuable articles policy.

Accidental Death and Travel Accident Benefits

Accidental death and dismemberment (AD&D) or travel accident benefits pay a lump sum to your chosen beneficiary if you die or suffer certain serious injuries while traveling on a covered trip.

  • This coverage is meant to supplement your life insurance, not replace it.
  • Benefits are often higher for accidents on common carriers, such as airplanes, trains, or buses.
  • It can be appealing for families who want additional protection when multiple members travel together.

Other Common Add-Ons

Depending on the insurer and plan, you can often add:

  • Rental car damage coverage if your rental car is damaged or stolen (subject to vehicle type, location, and policy rules).
  • Adventure sports or hazardous activities coverage if you plan to scuba dive, climb, ski off piste, or do other higher-risk activities often excluded from standard policies.
  • Cruise-specific benefits, such as missed ports, itinerary changes, or shipboard quarantine.
  • Annual or multi-trip coverage if you travel several times a year and want one policy instead of many single-trip plans.

How Does Travel Insurance Handle Health Coverage Abroad?

For many U.S. travelers, the biggest financial risk is not the cost of the trip itself. It is the cost of an unexpected medical emergency far from home.

Why Your Regular Health Plan May Not Be Enough

  • Original Medicare: Usually does not cover care outside the U.S. and its territories, with only narrow emergency exceptions.
  • Medigap plans: Some Medigap (Medicare Supplement) plans include a limited amount of emergency medical coverage abroad, typically with a deductible, a time limit from your departure date, and a lifetime cap.
  • Medicare Advantage: Some plans offer emergency coverage when you travel internationally, but details vary widely by plan.
  • Employer or individual plans: Some offer worldwide emergency coverage; others pay only at out-of-network rates or require you to pay upfront and submit a claim later.

Hospitals in many countries expect proof of payment or insurance before providing non-life-threatening treatment, especially for tourists.

A strong travel medical policy with evacuation benefits can:

  • Help arrange or guarantee payment to hospitals in many cases
  • Coordinate care and transport through a 24/7 assistance center
  • Move you to a facility that can handle complex care if needed, or in some cases transport you back home when medically necessary and covered

For older travelers or people with existing health conditions, this protection is often more important than trip cancellation coverage.

How Do COVID-19 and Other Known Events Affect Coverage?

COVID-19 still affects how travel insurance works in 2025, but not in the same emergency way it did in 2020.

What Has Changed Since the Pandemic Began

  • COVID-19 is treated as a “known event” by most insurers, similar to other widely known risks.
  • Fear of travel or concern about rising case numbers is usually not a covered reason for trip cancellation.
  • Government travel warnings, border closures, or broad lockdowns are generally excluded unless your policy specifically lists epidemics and those situations as covered reasons.

Many comprehensive travel insurance plans now treat you actually contracting COVID-19 like any other covered illness:

  • If you test positive and a doctor says you are unfit to travel, trip cancellation or interruption benefits may apply, within the policy limits.
  • Emergency medical and evacuation benefits can apply if you need treatment while abroad.

Practical Takeaways for Travelers

  • If you are worried about changing border rules, new variants, or future restrictions (rather than getting sick yourself), you likely need CFAR coverage to cancel and recover part of your trip cost.
  • If you mainly want protection in case you or a travel companion becomes sick with COVID-19 or another serious illness, a well-designed comprehensive policy can help, as long as you meet the policy conditions.

What Is Cancel For Any Reason (CFAR) Coverage?

Cancel For Any Reason (CFAR) coverage is an optional upgrade that gives you flexibility to cancel a trip for reasons not listed in standard trip cancellation coverage.

Common CFAR features in 2025:

  • You can cancel for almost any reason, such as concerns about outbreaks, unrest, changes in your comfort level, or simply changing your mind.
  • You typically receive 50%–75% of your insured, nonrefundable trip costs back (not 100%).

CFAR comes with strict conditions:

  • You usually must add CFAR soon after your first trip payment (often within 10–21 days).
  • You are often required to insure 100% of your prepaid, nonrefundable trip costs.
  • You must usually cancel at least 2 days before your scheduled departure.
  • It adds a noticeable amount to the cost of a standard plan and is not available in every state or on every policy.

CFAR is most attractive when you have:

  • Very expensive, nonrefundable bookings
  • Destinations with higher political or health uncertainty
  • Strict work or family situations where plans change often

When Is Travel Insurance Actually Worth the Cost?

You do not need travel insurance for every trip. Use these questions to guide your decision.

Trips Where Insurance Often Makes Sense

Travel insurance is usually worth strong consideration when:

  • Your trip is expensive and nonrefundable (cruises, safaris, international tours, destination weddings).
  • You are traveling outside the United States, especially where health care is expensive or hospitals require payment up front.
  • You or a travel companion are older or have health conditions that could flare up.
  • You are going on a cruise or visiting remote regions where medical evacuation is complicated.
  • Your itinerary is complex, with multiple flights, trains, or tour segments.
  • You are traveling during storm seasons or to regions known for strikes, wildfires, or other disruptions.

Trips Where You May Be Able to Skip It

You might decide to “self-insure” (accept the risk yourself) rather than buy a policy if:

  • Your trip is low cost and mostly refundable.
  • You are traveling close to home with strong local health coverage.
  • You booked fully refundable airline tickets and hotel rates.
  • You can comfortably handle the financial loss if things go wrong.

Even in these cases, some travelers still choose a low-cost medical-only or evacuation-only plan for peace of mind, especially when leaving the country.

How To Choose the Right Type of Travel Insurance

Start by checking what you already have so you don’t pay twice for the same protection:

  • Your health insurance benefits abroad (including Medicare, Medigap, and Medicare Advantage if applicable)
  • Credit card travel protections, such as trip cancellation, trip delay, lost luggage, and rental car damage
  • Airline, cruise line, and hotel change and cancellation policies
  • Existing personal policies (like umbrella or homeowners) that may extend some protections

Then match a travel insurance plan to your risk. The table below gives a simple overview.

Plan type Best for Key benefits Things to watch
Comprehensive “package” plan Big or complex trips where you want broad protection Trip cancellation and interruption, delay, baggage, medical, evacuation, 24/7 assistance Check covered reasons, exclusions, baggage limits, and pre-existing condition rules
Travel medical plus evacuation plan Long trips abroad or travelers most concerned about health costs Emergency medical care, evacuation, some assistance services Often does not include trip cancellation coverage for prepaid costs
Evacuation-only plan Travelers who already have good health coverage but want help getting to a suitable facility or back home Transport to an appropriate medical facility or, when covered, back home if medically necessary Limited or no coverage for regular medical bills or trip costs
Annual or multi-trip plan Frequent travelers who take several trips per year Coverage for multiple trips up to a maximum trip length per journey Often has lower trip cost limits and may have stricter pre-existing condition rules than some single-trip plans
Specialty add-ons (rental car, adventure sports, cruise options) Travelers with specific, known risks (car rentals, diving, skiing, long cruises) Tailored protection for a narrow risk you know you will face Check exclusions, covered activities, vehicle types, age limits, and country restrictions

Higher Demand and More Complex Risks

In recent years, travelers have faced:

  • Airline and airport disruptions, including mass delays and cancellations
  • Extreme weather, wildfires, and storms causing more interruptions
  • Ongoing health concerns, geopolitical tensions, and technology failures

As a result, more people are choosing higher-tier travel insurance plans and optional upgrades like CFAR to protect large, nonrefundable trips. Premium policies with stronger medical and disruption coverage have become more popular.

Parametric and Instant Payout Products

Some companies now offer parametric insurance. Instead of waiting for you to file a claim with receipts, these products:

  • Pay a set amount automatically when a specific trigger occurs (such as a flight delay longer than a certain number of hours, or severe bad weather at your destination).
  • Use objective data (for example, airline or weather records) to confirm the event.

Parametric products are becoming more common for weather-related risks and service disruptions, and they are designed to be simple and fast.

Updated Airline Baggage Limits

In early 2025, the U.S. Department of Transportation raised the minimum baggage liability limit for domestic flights. Airlines can now cap their liability at a higher amount, currently $4,700 per passenger for checked baggage on U.S. domestic flights.

This change helps some travelers recover more of the value of their belongings when bags are lost or damaged. However, it still may not cover high-value items or all of your inconvenience. Travel insurance can help fill that gap and may also apply in situations not covered by airline rules, such as theft away from the airport.

How Does All of This Affect Travelers in Practical Terms?

For most people, the core questions are simple:

  • If something goes wrong, will I be able to afford to fix it?
  • Will I be stuck trying to solve problems in another country on my own?

Travel insurance aims to:

  • Protect your budget, so a single disruption does not wipe out your savings.
  • Protect your health, with access to emergency care and evacuation options.
  • Protect your time and sanity, by giving you access to 24/7 assistance that can help rebook flights, locate care, or replace documents.

This protection is often most valuable for:

  • Families traveling with children or older relatives
  • Homeowners and small business owners whose trips are tied to important events
  • Retirees finally taking long-planned trips abroad
  • Students and young adults with limited savings but big travel plans

How Inszone Insurance Can Help You Plan Safer Trips

Every traveler has a different risk profile. A family road trip to a nearby state is not the same as a two-week cruise or a semester abroad, and your insurance should reflect that.

Inszone Insurance Services can help you:

  • Review the coverage you already have through home, auto, umbrella, and health insurance.
  • Identify gaps that travel insurance and related products can fill.
  • Choose options that match how often you travel, where you go, and how much you are putting at risk.

If you travel to Mexico or drive across the border, Inszone already offers Mexico travel insurance. These policies combine medical coverage, trip protection, and auto coverage structured for Mexican law and local requirements, which differ from U.S. rules.

You can also explore Inszone’s broader personal and specialty insurance options, such as umbrella and identity theft coverage, which may complement your travel protection and help safeguard your overall financial picture.

If you have an upcoming trip, consider:

  • Visiting Inszone’s Personal Insurance section to request a quote and discuss your travel risks.
  • Contacting an Inszone agent directly to review your situation and build a protection plan that fits both your itinerary and your budget.

Sources and Further Reading

Corey Elsasser

Senior Commercial Lines Account Manager

Corey Elsasser is a Senior Commercial Lines Account Manager at Inszone Insurance Services. He holds a Bachelor of Arts degree in Communications from Cal State University, Fullerton. Corey joined the Inszone team in 2019 after being drawn to the insurance industry as a result of his extensive experience in customer service.

He uses his Communications degree on a daily basis to develop strong working relationships with those in need of personal insurance. His extensive background in organized sports has created an incredibly strong work ethic, which allows him to deliver the highest level of customer service.

In his time off, Corey enjoys snowboarding, the beach, and spending time with family.

GET A QUOTE

Popular Posts

Change Contrast
Change Font Size
Reset to Default Settings
Close the Toolbar