Spring break season is upon us, and while some soon-to-be vacationers are planning their packing lists, others are taking steps to protect their trips.
Fifty-four percent of Americans traveling internationally for spring break purchased insurance for their trip, according to a survey of U.S. adults conducted by SurveyMonkey on behalf of CNBC between March 12 and March 16. Fourteen percent said they bought travel insurance despite not typically purchasing such policies.
This comes amid an escalating war in the Middle East that has sent oil prices soaring and, subsequently, airfare rates. Simultaneously, a partial government shutdown that has lasted more than a month has left TSA workers without pay. Many of these employees have either stopped showing up to work or are prioritizing second jobs where they’ll receive their pay in a timely manner. As a result, travelers are facing long security lines at some airports and a senior Trump administration official said smaller airports may have to close due to a shortage or security personnel.
We have some bad news for the Americans hoping their newly purchased travel insurance will help them through some of these obstacles — many standard plans exclude situations beyond those explicitly listed in the policy. But there is still an option if you’re willing to pay the hefty costs.
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Spring break travel insurance
What does travel insurance cover?
A standard travel insurance plan will cover the following:
- Trip cancellation: If you have to change your plans for a covered reason — such as an illness, injury or death in your family — you may be eligible for a refund of your prepaid trip expenses. Typically, policies include coverage for 100% of these expenses.
- Trip interruption: If you have to head home early for a covered reason, you could get a refund for prepaid trip expenses you’re forfeiting, plus get some additional funds to change your plans. Policies often pay up to 150% of these expenses.
- Trip delay: If you’re delayed for a certain amount of time, typically six hours, you could receive funds to spend on food, lodging and local transportation. Limits are typically a flat dollar amount.
- Baggage delay or loss: If your bags or belongings are lost or delayed while traveling, you could get a flat dollar amount, typically per item, to replace them.
- Medical expense coverage: If you’re injured or become ill abroad, this coverage will pay for doctors’ fees, hospital bills and other treatment needs. Some plans can also help with finding medical treatment and things like translation services.
- Emergency evacuation: If there aren’t adequate medical facilities near you, this part of your policy could help get you to somewhere that meets your treatment needs.
When does travel insurance kick in?
While travel insurance can pay for cancellation or trip interruptions, not every situation is covered. Most policies include a list of covered reasons for cancellation and interruption. These can vary by company and plan, so make sure you read the covered reasons before you buy.
A few covered reasons that are fairly standard include:
- Injury or illness: Applies if you or another traveler on your trip becomes injured or ill.
- Family medical emergency: Kicks in if someone in your family becomes injured or seriously ill.
- Death: Allows you to cancel your trip if a traveling companion or a family member dies.
- Quarantine: Applies if you’re unable to travel due to exposure to a contagious disease.
- Job loss: If your employment is terminated or you’re laid off, you can change plans.
- New job or relocation: If you find new employment and are unable to travel, or have to relocate for work, a change of plans would be covered.
- Terrorism in your destination: If a terrorist attack happens within a radius of your destination or within a limited timeframe of your departure, you could be covered to change your plans.
- Natural disasters at your destination: If a natural disaster hits your destination and evacuations are ordered, you may be covered. But there are exceptions based on when you purchase your plan.
Make sure to read your specific policy’s coverage to see what is offered — many insurers include a sample policy on their website before you buy, but you also typically have a review period of 10 days, so you can cancel your plan for a refund.
As you read, look for the policy’s definition of a family member — each company has different definitions as to who’s included. And see if there’s a definition of the severity of an injury or illness, and any documentation that would be needed to file a claim.
Common travel insurance exclusions
Even the best travel insurance plans have limits. Most travel insurance policies don’t cover:
- Known storms: If you buy travel insurance once a storm is on the way, any impacts from it are excluded from coverage.
- Known issues or events: Once an event starts, like a war or conflict, policies exclude it from coverage.
- War or civil unrest: While terrorism is covered, policies usually broadly exclude civil unrest, disturbance or insurrection, as well as war-related events.
- Routine medical expenses or medical tourism: If you plan to get medical attention while abroad, this is typically excluded from travel insurance coverage.
- Pre-existing medical conditions: Unless you’re eligible for a pre-existing conditions waiver — which is included with many policies if you buy close to booking — travel insurance doesn’t cover expenses related to known medical conditions.
What is cancel for any reason coverage?
If you’re worried about a situation or scenario being excluded from a standard policy, or if you want the flexibility to cancel or change plans for reasons outside of those listed in your policy, getting cancel for any reason (CFAR) coverage as an add-on to your travel insurance policy could be a worthy expense.
This will allow you to change plans for any reason you’d like, including those typically excluded from standard travel insurance. The only requirement is that you cancel within the time frame — typically 48 hours before your departure.
CFAR coverage typically pays out between 50% and 75% of your trips’ non-refundable expenses. That amount varies by the policy and insurer. You also need to buy within a certain timeframe of booking your trip, typically 14 to 21 days.
And, it comes at a cost: Standard travel insurance costs between 4% and 10%of your total trip expenses, and adding CFAR adds an additional 2% to 4% of trip expensesto your premium.
While CFAR adds to your costs and you won’t get a full reimbursement, it could help you recoup some of your costs or let you change your mind.
Some of the best companies for CFAR travel insurance include Allianz and Faye for their plans’ flexibility and reimbursement rates.
Allianz’s Cancel Anytime has the highest reimbursement percentage of any plan we’ve reviewed, covering 80% of prepaid, non-refundable expenses.
Allianz Travel Insurance
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Policy highlights
Single-trip and multi-trip/annual policies and a rental car plan. OneTrip Prime and Premier plansinclude coverage for one child 17 or younger when accompanying a covered adult.
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Cancel For Any Reason coverage
Reimburses 80% of nonrefundable trip costs if purchased within 14 of initial trip deposit.
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Pre-existing condition waiver
Included if policy is purchased within 14 days of initial deposit
Pros
- OneTrip Prime and Premier plans cover one child under 17 for free
- CFAR coverage reimburses 80% of nonrefundable trip costs.
- Pre-existing condition waiver included with all plans
Cons
- Rates are higher than the national average
- Limited options for adventure travel
- CFAR plan must be purchased through a travel agent
- No discounts
Faye’s easy-to-use online travel insurance offers CFAR coverage with up to 75% reimbursement and typically handles claims quickly.
Faye Travel Insurance
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Policy highlights
Faye has one single-trip plan with optional add-ons for pet care, adventure sports and damage to vacation rentals.
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Emergency medical: $250,000
Medical evacuation: $500,000
Personal effects: $150 per item (up to $2,000 total) -
Cancel For Any Reason coverage
Up to 75% reimbursement of nonrefundable trip costs if purchased within 14 days of initial trip deposit.
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Pre-existing condition waiver
Available if policy is purchased within 14 days of initial trip deposit.
Pros
- $2,100 per person trip delay coverage after six hours
- 100% digital claims process
- Can add coverage for pet care and vacation rental damage
Cons
- Only one plan is available
- Rates are higher than some competitors
Travel insurance FAQs
How much is travel insurance?
Travel insurance policies typically cost between 4% and 10% of your prepaid, non-refundable trip expenses. If you want to add cancel for any reason coverage, expect to add another 2% to 4% of your trip costs to your premium.
What does travel insurance exclude?
Travel insurance typically excludes events that were foreseeable before you bought the policy, including storms and natural disasters. It also tends to exclude wars and civil unrest as reasons for cancellation.
Is travel insurance worth it?
Travel insurance can help you protect yourself from unexpected expenses that you could incur while traveling. While it doesn’t cover all scenarios you could face, it could help you to be more prepared while abroad and avoid large expenses like medical bills.
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