Taking a trip this summer? Experts say you might want to consider taking out travel insurance, with some countries even requiring it before you enter.
What does travel insurance cover?
Travel insurance varies depending on the company and policy, but coverage can range from covering the cost of lost bags to rental car damage.
“One of the tricky things about travel insurance is it’s such a broad umbrella term for so many different things,” Scott Keyes, founder of Scott’s Cheap Flights and author of “Take More Vacations,” told ABC News.
“When all of a sudden the pandemic was ramping up and it became clear this trip that people had planned for March or April 2020 was not going to happen, only then did they read the fine print and find out that they’re not actually covered for what they thought,” Keyes said.
Keyes noted that pandemic-related issues may not be covered in a typical travel insurance policy. Individuals should read the fine print when shopping to ensure they will be sufficiently covered.
“To have pandemic coverage, you must buy the Cancel For Any Reason additional policies in addition to your standard coverage,” Mark Friedlander, director of corporate communications at the Insurance Information Institute, said in an interview with ABC News. “And then that policy must specifically state it covers pandemic-related issues. So just because you find Cancel For Any Reason, it’s not guaranteed that you have all the coverage you might need.”
What is a Cancel for Any Reason policy?
As the name implies, Cancel For Any Reason, or CFAR, policies offer travelers a wide range of coverage should they need to cancel their trip. Many companies have begun adding special pandemic coverage to these policies.
CFAR pandemic coverage can include trip cancelation, trip interruption, travel delay, medical expenses and even emergency medical evacuation if you need to be flown back to the U.S. from a foreign country for COVID treatment, according to Friedlander.
“Read the policy carefully before you buy and make sure you are fully protected for pandemic-related issues,” Friedlander said. “You also need to understand what is the trigger — when do you need to notify your insurer that you are canceling the trip?”
Friedlander also noted taking out a CFAR policy does not guarantee you’ll receive all your money back should you cancel.
“Depending on who the writer is for the policy, you typically though will not get back 100% of your trip, even with full coverage,” Friedlander said.
How can you find out if the country you’re visiting requires travel insurance?
While countries mandating travelers to purchase insurance before entry is not exclusive to the pandemic, the requirement has become more prevalent. Some countries even require COVID-specific policies.
Aruba requires individuals to buy COVID-19 travel insurance from the country’s government. St Maarten requires visitors to also purchase COVID-19 insurance through their Electronic Health Authorization System.
Keyes recommended checking the State Department’s website and searching for the entry and exit requirements for the country you’re planning to visit to see if travel insurance is required. Another tip is to check your destination’s department of transportation’s webpage.
“It’s one of the things that’s important to check back often,” Keyes said. “Because the situation is just changing so commonly and so frequently now that what had been the case even a month or two ago might not be the case right now.”
Is it worth spending the extra money?
Friedlander said a CFAR policy can increase the overall cost of your travel insurance policy by 40 to 60%. In addition, he said these policies are not likely to cover 100% of your trip should you cancel.
“For security of you and your travel companions, we recommend you consider a policy that does contain pandemic coverage so that you are financially protected for while you are overseas,” Friedlander said.
Keyes noted most people don’t realize the coverage they have just by booking a flight through an airline, and also the coverage they may have if they purchased their tickets on a credit card.
“The main thing that I recommend looking at when you’re looking at insurance is, what are you already covered for and what, in addition, will this insurance, additionally cover you?” Keyes said. “Let’s say the airline cancels your flight. Well, under federal law, you are actually entitled to a cash refund. … The second form to be looking at what you already have is through your credit card. Many credit cards automatically give you some amount of travel protection as long as you use that credit card to purchase your flights.”
Keyes also noted most airlines are not charging change fees if you decide to rebook.
“For a lot of folks buying insurance is less about a sort of cost-benefit analysis, and more about just the sense of security,” Keyes said. “If buying an insurance product is going to let you take a happier, more carefree, more relaxed vacation. Then, at the end of the day, I think that’s a pretty small price to pay.”