Now that Americans returning from overseas to the United States are no longer required to test for COVID-19 before boarding a plane, you may be wondering whether to pay to insure your trip. Travel insurance often seems like an unnecessary cost, especially when fares are refundable or you don’t have to pay a change fee. But there are times when you have to have it, as well as times when it’s not necessary but worth paying for.
What travel insurance covers
Some credit cards offer insurance, but coverage is limited. In contrast, comprehensive travel insurance policies cover a wide range of expenses. A comprehensive travel policy typically covers damage to rental cars, trip cancellation, lost luggage and medical expenses while you are abroad.
Most comprehensive travel insurance policies now also include cancellation and medical benefits related to the contraction of COVID-19. But for other COVID-related issues, such as border closures, quarantine restrictions, or fear of contracting coronavirus, you’ll likely have to pay for what’s called a “cancellation for any reason,” or CFAR. , an upgrade. CFAR travel insurance can add 50% more to the cost of travel insurance, but it offers better protection for travelers facing the kinds of interruptions the pandemic has made commonplace.
Some plans with quarantine coverage will also pay for certain expenses if you need to stay in place for additional days. Coverage is generally limited; for example, you could be reimbursed $200 per day for two additional days of accommodation if you need to quarantine overseas.
How much does travel insurance cost
On average, a travel insurance policy costs $248, according to data from SquareMouth, a travel insurance comparison site. But how much you pay for a policy depends on several factors: the length of your trip, the number of travelers you need to insure, and even your age. A better estimate is 4% to 11% of the total cost of a trip, experts say. You can compare packages at SquareMouth or TravelInsurance. Choose covers that are suitable for your trip and be sure to read the fine print of any policy you are considering.
Travel insurance policies generally fall into three tiers: Basic, Intermediate, and Full coverage. Although the basic option is often the most affordable option and includes benefits such as trip cancellation and lost luggage, it may require the payment of a deductible in the event of illness or wound. Mid-level coverage generally includes the same benefits as basic policies, but adds a health insurance benefit. A more expensive, more comprehensive policy may include the benefits of basic or mid-level policies, but with a higher claim limit. Basic coverage rates average around $105, while mid- and full-level coverage averages around $130 and $164, respectively, according to data from BankRate, a financial website. If you also want a CFAR font, it will add to those costs.
Because older travelers are generally at greater risk for health issues, policies tend to be more expensive the older you are. A 2021 analysis conducted by AdvisorSmith, a small business resource website, estimated that average prices ranged from a low of $92 for a young child to a high of $805 for a 100-year-old. The difference between the average cost of travel insurance for a 40 year old and a 70 year old can be around $100. But that doesn’t mean older people can’t find affordable fonts; shopping around and comparing plans is key.
When to buy travel insurance
As of June 12, 2022, travelers returning to the United States no longer need to test negative for COVID to re-enter the country, alleviating fears of being stuck in a foreign country longer than expected. But the Centers for Disease Control and Prevention is advising anyone with COVID-like symptoms not to travel. And there are other times when opting for travel insurance is worth it.
If you are concerned about extreme weather conditions disrupting your trip, a possible unexpected health incident involving you or a member of your family, a terrorist attack or even the loss of your job, travel insurance policies with Basic trip cancellations often cover these cancellation reasons.
If you’re traveling to a destination that has a history of stricter COVID-related travel restrictions or has had other COVID-related issues, consider a Cancel Any Reason policy. Be sure to check travel restrictions for any countries you regularly travel to; some countries still require travel insurance to visit.
Additionally, there is no guarantee that the US waiver of COVID testing for air travelers returning from overseas will be permanent. The testing requirement is set to be reviewed on September 10, 90 days after it was lifted. It could be reinstated if there is a concerning new COVID variant – and the highly transmissible BA.5 sub-variant of the virus has been a growing threat.
When to Skip Travel Insurance
Whether you pay for a travel insurance policy and the level of cover you get depends on your personal risk tolerance, of course. But it also depends on whether you will have to pay a lot out of pocket if you have to cancel or postpone your plans.
If you’re primarily worried about losing money on expensive international flights, for example, think carefully before paying to insure them. This also applies to the travel insurance offered at the cash desk when purchasing a plane or train ticket. While it might seem like a small outlay in exchange for the extra flexibility, keep in mind that most airfares already have flexibility built in.
Major US airlines have made permanent changes during the pandemic, allowing flexible bookings for most tickets. This means you won’t have to pay a fee if you need to change your flight, as long as you don’t buy the cheapest fares (Southwest allows free changes on all tickets). Additionally, some travel providers offer flexibility on bookings made within a certain timeframe. For example, major airlines and Amtrak offer refunds within the first 24 hours of making a reservation if you need to cancel or change your itinerary.
Additionally, when an airline cancels your trip, as long as the flight arrives and/or departs from a US airport, you are legally entitled to a refund, in accordance with US Department of Transportation regulations. An airline will often automatically issue a credit or voucher for a canceled flight, but be sure to request a refund if that is what you prefer, as it is your right. Also, if there has been a substantial schedule change (usually two hours or more) and you decide not to take that flight, you are entitled to a refund of your fare.
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