A guide to travel insurance: The new rules for 2022

There are three major types of travel insurance to choose from.

Insurance policies go by many names. The three most common categories are trip insurance, travel medical insurance and international health insurance. 

Trip insurance covers a range of unforeseen problems and concerns such as trip interruptions (say for a death in the family), lost or damaged baggage, stolen possessions, canceled flights, accommodations, cruises, pre-paid event purchases, etc. 

Travel medical insurance covers your costs in case of emergencies or accidents that occur outside of your home country or health network. It can be purchased as stand-alone insurance or as part of an all-inclusive plan.

Meanwhile, international health insurance (like GeoBlue’s Xplorer Essential plan) offers extensive coverage for long-term travelers, ex-pats, or digital nomads working remotely. It basically replaces the health insurance you would have had in your home country and includes routine doctor’s visits, preventive care, prescriptions and more in 100+ nations. Some plans include coverage for chiropractor/acupuncture sessions and mental health support.

“It is important to buy trip insurance given what’s happening in our current environment where we are dealing with a lot of flight cancellations, shortage of staff and pilots, and other external factors,” says Omar Kaywan, co-founder of Goose Insurance. “But it is extremely important to cover yourself medically as these emergencies can run you thousands of dollars. For example, if you are hospitalized during your vacation and have to seek medical attention, you can easily be spending $5,000+ per night just for the hospital bed. So if you have to choose, it is highly recommended to purchase travel medical insurance over trip insurance.”

A comprehensive plan is likely your best bet due to the pandemic.

Some companies offer plans that combine trip insurance and travel medical insurance for the best of both worlds. For instance, World Nomads offers comprehensive trip insurance (even your electronics and gear are protected) with 24-hour assistance, emergency medical and evacuation benefits, plus coverage of adventure sports and high-risk expeditions for more active travelers. 

Or, consider SafetyWing, a more affordable start-up that covers medical and non-medical issues with a quick, easy-to-use system for submitting claims. Although it was designed for nomads and remote workers, it has short-term plans that any traveler, including adrenaline junkies, can use too. Bonus: SafetyWing also covers accidents that could happen while visiting your home country after you’ve been abroad for 90 days—a rare perk for travel insurance. (This medical coverage is available during a 15-day return trip to the US for Americans and 30 days if you live elsewhere.)

For anxious travelers, a Cancel for Any Reason benefit will soothe your worries.

Changing, postponing, or canceling your trip due to the fear of getting COVID-19 (but not actually testing positive for it) is usually excluded in the fine print. Luckily, there’s a loophole. “The popular Cancel for Any Reason (CFAR) benefit may be added to a comprehensive policy at the time of purchase (if available),” says Meghan Walch, director of product for InsureMyTrip. “This coverage can give you the flexibility to cancel your trip, at least two days prior to departure, for something other than a covered reason—such as fear of travel.” Reimbursement collected ranges between 50 to 75 percent of your prepaid, non-refundable trip cost. But an important caveat: to qualify for this coverage, you must purchase CFAR within two to three weeks after making the first payment toward your trip.”

Your destination heavily determines which kind of insurance you will need.

The risk of your trip varies whether you want an easy weekend escape close to home or an excursion to far-flung lands. “If you are flying to a domestic destination and the hotel has a good refund policy and the airline has a generous credit transfer policy, then you don’t need insurance as much as you would if you are going abroad for adventure tourism with a big up-front deposit,” says InsuranceQuotes.com analyst Michael Giusti. Additionally, if you’re going somewhere domestic, most American health insurance plans will cover medical bills from other states, so you likely would not need additional travel medical insurance. But always be sure to read the fine print of your own policies. 

Even people on shorter vacations have been saved by travel insurance policies. “I have the premium annual coverage through Allianz and more than recover the premium each year,” says traveler Sucheta Rawal, who I spoke with while researching this article. “From a canceled cruise to delayed flights, doctor visits to hotel stays, Allianz has always come through, though now the claims processing takes longer than usual.”

Another pro tip? Watch out for high-level travel advisories in the region you’re visiting as that might invalidate your insurance. “It is highly recommended to ensure your destination is covered as some policies do have exclusions on destinations based on global affairs or sometimes may limit the benefits due to high costs of treatment,” Kaywan says.

Some countries actually require insurance, particularly for unvaccinated visitors, so if they catch COVID-19, their quarantine or care would be covered. To double-check the rules for your next vacation, use InsureMyTrip’s International Travel Restrictions & Visa Requirements tool and select the country to which you’re traveling and when you are leaving/returning.

Travel insurance—of any kind—is not as pricey as you may think.

“Purchasing travel insurance is the best way to protect yourself with confidence and travel with peace of mind,” Kaywan says. “Many Americans believe travel medical insurance is expensive, but in fact, it is the contrary. For example, a Goose Insurance policy for up to $5 million of travel medical insurance coverage would cost around $30 for a 35-year-old American on a two-week international trip.” That’s pennies compared to what you could owe in a worst-case scenario.

You should buy travel insurance immediately after booking your trip.

If you’re traveling this summer or fall, don’t wait until the last minute to buy travel insurance. “As travel costs continue to rise with demand, travelers can maximize their travel insurance benefits by buying early,” Walch says. Plus, purchasing early after booking a trip allows you to take advantage of time-sensitive travel insurance benefits, like Cancel for Any Reason (CFAR), financial default, or a pre-existing medical conditions exclusion waiver.

According to Walch, you become ineligible for these time-sensitive benefits in as little as 10 days after a trip deposit is made. “Travelers should also buy early to boost potential coverage for unforeseen events,” she says. “Once an event is considered known (like when a hurricane is named), travel insurance will not cover any losses related to the event.”

Even if you don’t think you’ll need insurance, you never know when an issue or accident could arise. And the last way you want to wrap up your vacation is by standing in a mile-long customer service queue at the airport or paying triple the trip cost for an urgent care bill. So to be safe, start ahead of time by comparing quotes for your upcoming journey.

In the end, I chose a trip/health insurance combo that’s worked for me, and I’m glad I did. It’s a comfort knowing that no matter what wild activity I do, I have a Plan B in case things don’t go according to Plan A. Surfing in El Salvador? Horseback riding in Nicaragua? Hiking active volcanoes in Guatemala? No worries, I’ve got it covered.