Planning a big trip for the holidays? How to make sense of travel insurance.

Those who had travel plans for 2020 and 2021 that they booked before the pandemic know all too well the disappointment of not being able to travel until this year or even 2023 in some cases.

Choosing travel insurance depends on your risk aversion, the cost of travel and your willingness to pay for travel insurance.

If the traveler spends an average of $5,500 on a two-person trip, they’re buying travel insurance, says Megan Moncrief, chief marketing officer of SquareMouth.com, a travel insurance aggregator site. That total dollar amount for the trip has been “fairly constant” but has only fallen slightly since the pandemic.

“Travel insurance has become increasingly popular and in demand,” says Moncrief. Travelers want to book offers, “but they want extra protection”.

Travel insurance typically costs 4% to 10% of the total cost of a trip, according to Moncrief, and insurance policies vary, so it’s best to consider your needs carefully.

Read: When to get travel insurance and when to skip it

Air travel has recovered to some extent this year, according to data from Transportation Security Administration checkpoints comparing August 16, 2019 to the same dates for 2020, 2021 and 2022. The figures for 2022 are 1.99 million compared to 2.25 million travelers for 2019. For 2021, 1.61 million travelers came through TSA, while in 2020 only 566,000 were screened.

The cruise industry is coming back, but at a slower pace. According to the Cruise Lines International Association, an industry body, more than 75% of members’ ocean-going capacity has returned to service, and nearly 100% should be operational by August 2022. Some cruise ships are operating at full capacity, while others are gradually increasing capacity from the 50% capacity restrictions in place at the start of the pandemic.

Janet, who is in her 70s, booked a long-awaited cruise around Norway back in 2019 and she and her husband still haven’t made the trip, partly because they were reluctant to travel abroad this year.

Her original trip was scheduled for June 2020. This year, “cruise lines canceled everything,” says Janet, so they rebooked on voyages in 2021 with credit for 125% of the voyage. They could use the additional credit to upgrade their stateroom or apply it towards shore excursion costs. “We took the 125% and rebooked for 2021.”

In 2021, however, they were reluctant to travel. Since they had two years to use the coupons, they decided to push the date back to 2022. Still reluctant to travel abroad for fear of missing out if they contracted COVID-19, they are 125% booked for 2023.

They had travel insurance with an independent insurance company as their trip included pre- and post-cruise travel. The insurance cost them $1,400 for the $20,000 trip, about 7% of the total cost, and they thought it was worth the expense. “We just wanted to be safe,” says Janet.

Since they postponed their trip, the insurance company reimbursed them in full. They now have the voucher for a cruise in 2023 and need to reconsider taking out insurance for the entire trip.

Though the couple still have two years to go on their cruise, they are determined to leave in 2023. “I want to go next year,” says Janet. Her reasoning: “Let’s just go. We still have our health.”

For their travel insurance with a separate insurance company, the couple chose the “high-end” insurance, she says, because they wanted to cover the cost of their trip while also getting strong evacuation coverage. “We knew that if we wanted to be flown home, we wanted to book (that)” in case they got sick.

The trend now is for travelers to buy cancellation insurance, medical insurance and travel delay insurance, Moncrief says. Cancellation Protection provides reimbursement of prepaid and non-refundable trip payments if your trip is canceled due to illness, injury or death, inclement weather, duty to work or loss of employment. Travel Delay Insurance reimburses the cost of food and lodging if your trip is delayed.

However, if you want more coverage that allows you to cancel for reasons such as fear of contracting COVID-19, experts advise purchasing additional coverage that includes “cancellation for any reason.”

“If you are “scared, not feeling well (when traveling) or a border is closed” you are typically not covered by travel insurance which will cover you for trip cancellation, trip interruption or medical insurance. “The anxiety aspects of COVID are not covered by standard cancellation insurance,” says Moncrief. “Canceling for any reason is a much broader coverage.”

It usually increases your insurance costs by about 40%. In addition, cancellation for any reason coverage typically reimburses up to 75% of the cost of your trip.

Travel insurance typically includes trip cancellation and post-trip benefits, says Syed Rizvi, chief of specialty insurance at Nationwide.​ “The bigger cost is the cost of trip cancellation,” he says.

His estimate of the cost of travel insurance is 2% to 4% of travel expenses. Trip cancellation insurance provides reimbursement for prepaid, non-refundable expenses if you cancel your trip for a covered reason. Post-departure benefits include medical insurance, evacuation, lost luggage and travel delay. It is possible to purchase evacuation insurance separately, but not all companies offer it as a separate purchase.

Most of the time, when you buy travel insurance, you’re getting what’s called secondary insurance, or “excess insurance,” meaning the insurance is secondary to any other insurance you already have, experts say.

This means that the travel insurance company will first check what other insurance you have, e.g. B. health insurance. However, if Medicare is your primary health insurance coverage, it doesn’t cover you if you travel outside of the United States. However, if you have a Medicare gap or supplement plan, it can cover 80% of international travel, e.g. B. with a $500 deductible. When planning a trip abroad, it is best to check what health insurance you already have as you will decide what type of travel insurance you need. Also, check your credit cards to see what type of travel insurance coverage they hold, if any. Cards with broader coverage tend to have a higher annual fee.

Buying primary emergency medical services means the travel insurance company will be the first to pay or reimburse for those services instead of going through another health plan you may have, says Daniel Durazo, director of external communications at Allianz Partners USA.

The scope of insurance required for services after departure varies. “It’s really a personal choice,” said Erma Crock, senior director of product management, operations and underwriting at Nationwide Specialty.

Consider how healthy you are, what type of travel you take in terms of activities and how strenuous they are, whether you are on Medicare and whether you are traveling only within the US or internationally as well as on a cruise that includes US and US International Ports. “It depends on where you’re going and what kind of trip you’re doing,” says Crock. “Most (travel insurance) policies take into account what the average person needs,” she says.

For example, most have $1 million in evacuation insurance and $250,000 to $500,000 in medical benefits, she says. Check the fine print to see what a policy you are considering entails. Some evacuation covers may be lower, so decide if you want higher coverage before purchasing.

If you want to be sure you’re covered for pre-existing conditions that might arise before your trip, get travel insurance within 10 to 14 days of paying your deposit, Crock says, or purchase it at the time of your deposit make sure you are insured.​

How do you know if your deposit/deposit is refundable or non? “Before posting a vacation deposit, be sure to check or ask what the terms and conditions say about canceling and getting your money back,” says Allianz Partners USA’s Durazo. “Since the pandemic began, many travel companies have increased transparency about non-refundable fees, particularly when booking online, and ensured that the booking terms and conditions are in a strategic place that customers can’t overlook during the checkout process.”

If you see a good deal on travel in December, January or February, paying a deposit can get you a price that may not be available later.

If you are concerned that you may change your mind the deposit is fully refundable up until a certain date in the autumn, after which cancellation charges will start to apply. Instead of booking online, speak to someone over the phone, whether it’s a travel company representative or an independent travel consultant, who can explain your options to you. Another way to protect a deposit is to buy a refundable trip, which will cost you a little more but keep your deposit fully refundable until a certain date. Not everyone buys travel insurance, but those who do like the security.

“When something happens, you wish you had it,” says SquareMouth.com’s Moncrief.