Travel insurance explained

Travel insurance covers risks that come with a trip, such as a cancellation, a delay or lost luggage. A policy generally covers travel in the U.S. and abroad. As of 2026, it usually costs 5% to 10% of the trip's total price. The rate depends on the season, where you leave from, where you're going, your age and other factors.

The main kinds of cover

• Trip cancellation, interruption and delay reimburses prepaid, nonrefundable travel costs if you can't take all or part of a trip. It may also pay back part of a trip if you become seriously ill or injured, or a flight delay forces a night in a hotel.
• Baggage loss and delay covers lost, stolen or damaged bags and belongings. It's secondary cover. You may already have some cover for bags through a homeowners policy or a credit card, and a baggage policy can fill the gaps.
• Travel medical pays for illness or injury on a trip. Most U.S. health plans and Medicare likely won't cover care abroad, and many countries, including most of the European Union, may ask for proof of medical insurance before issuing a visa.
• Medical evacuation pays for emergency transport to a medical facility, and can be bought on its own or as part of a travel health policy. Most U.S. health insurers won't pay to fly you home or to the nearest suitable hospital from overseas.

Trip cancellation cover may not pay for any medical care you need overseas.

Cancel for any reason

Cancel for any reason (CFAR) cover is added to a trip cancellation policy. It pays back part of the trip, typically 50% to 75% of the total price, when you cancel for a reason the base policy doesn't cover. It usually comes with conditions:

• Buying it within a set time frame
• Insuring the full cost of the trip
• Canceling 48 hours or more before you leave

As of 2026, CFAR adds close to 50% to the cost of the travel insurance, and the pricier the trip, the more it costs.

What's often excluded

These are among the most common exclusions:

• Pre-existing health conditions
• Pandemics
• Civil and political unrest where you're going
• Pregnancy and childbirth
• Risky activities, such as bungee jumping or backcountry skiing

What isn't insurance

A travel policy is often sold in a package with products that aren't insurance. Only the insurance part is overseen by state insurance departments. The two most common extras are cancellation fee waivers, which cover the fees for canceling travel plans, and travel assistance services, which help with translation, medical referrals, lost luggage and travel documents.

What to check in your policy

• Emergency medical care, and transport back to the U.S.
• Travel and lodging costs
• A contact line that answers around the clock
• The regions and length of travel it covers
• How it treats pre-existing conditions
• The activities you plan to do
• Whether it pays a hospital directly or pays you back

An annotated example

What to do next

Find out whether your own health plan covers emergencies abroad, and read what any travel policy excludes before you rely on it.