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What Does Travel Insurance Cover?


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For those of us planning a trip, travel insurance is often sidelined or overlooked in favour of the exciting stuff – flights, hotel stays, and tours. However, when it comes to financial preparedness, travel insurance can take a huge weight off your mind – even if things go wrong, you’ll be covered. Right? 

While there are travel insurance packages that cover everything from baggage theft to trip cancellations, this isn’t always the case. In this guide, we’ll clear up some of the fine print about what travel insurance does and does not cover to help you confidently prepare for your next trip.

How Does Travel Insurance Work?

Travel insurance works by reimbursing you for specific trip costs when things go wrong. For example, if your travel plans get cancelled due to unforeseen circumstances, trip cancellation insurance will reimburse you for the trip, including flights and accommodation. If you signed up for baggage insurance and your luggage gets damaged or goes missing, travel insurance can reimburse you for the value of your luggage (up to a limit). Similarly, if you get injured or hospitalized, travel medical insurance will reimburse you for any medical expenses you incur. 

Note that most of these circumstances include reimbursements, meaning you may have to provide for incidents out of your own pocket until the insurance gets back to you. They can then reimburse you via direct deposit or cheque. This is because medical attention or missing baggage often require immediate help, and insurance tends to have a turnaround time of at least a few weeks.

Common Types of Travel Insurance Coverage

There are lots of travel insurance types to choose from. You can opt to cover specific things, like trip cancellation and baggage insurance, or go for something more comprehensive. We’ve outlined what sort of coverage you can expect from the main types of travel insurance below. 

Medical Expenses Coverage

One of the most important aspects of travel insurance is medical expense coverage. This coverage ensures that you are protected in case of any medical emergencies while travelling.

Typically, medical expenses coverage will include the following:

  •        Doctor visits
  •        Hospital stays
  •        Prescription medications
  •        Emergency medical transportation (ambulances, helicopters).    

Some countries require medical expenses coverage before visa approval, while others have expensive medical care and may be costly if you pay out of pocket. When looking for medical expenses coverage, a good level of coverage is around $100,000. However, this will vary based on the country and specific medical costs.

Trip Cancellation and Interruption Coverage

Trip cancellation and interruption coverage may or may not be included in one policy. In general, the difference between the two is as follows:

  • Trip cancellation coverage: Trip cancellation coverage reimburses you for non-refundable expenses if you cancel your trip due to unforeseen reasons. These reasons may include illness, injury, the death of a family member, natural disasters or other events listed in the policy.
  • Trip interruption coverage: Like trip cancellation, trip interruption coverage reimburses you for the non-refundable parts of your trip such as airline tickets, hotel reservations, and other prepaid expenses. However, this coverage kicks in after your trip has been interrupted and reimburses you for anything you missed out on.

Not only does trip interruption cover you for the part of your trip you missed, but it can also reimburse you for your travel back home. Trip cancellation is ideal if you’re unsure about the circumstances of your flight and don’t want to lose the money you spent on pricy travel arrangements.

Baggage and Personal Belongings Coverage

A lot can happen to your baggage. On long flights your luggage may be damaged, go missing, or end up somewhere completely unexpected. Baggage insurance can cover the following:

  • Lost (or delayed) baggage: If your bag goes missing, travel insurance can reimburse you for any replacement items you buy (within reason). However, it probably won’t cover non-essential, expensive items. Airlines must reimburse you for lost luggage, and travel insurance can supplement this if necessary.
  • Damaged baggage: If your bag and its contents are damaged, you can claim back the cost. To do this, you’ll need to report it to the airport help desk first.
  • Baggage theft: If your luggage is stolen, baggage cover can reimburse you for its value. However, you need to report it stolen first with a local police station.

Having our valuables damaged or going missing is never pleasant. At least with baggage insurance, you can claim back some of the value you’ve lost. For lost luggage, remember to keep your item receipts to make the claim process easier! 

Emergency Evacuation and Repatriation Coverage

Emergency evacuation and repatriation coverage can pay for an emergency evacuation or repatriation flight to get you to a medical facility. This is for dire medical emergencies and it can save your life if something goes wrong. 

Emergency evacuations (via helicopter) cost between $60,000 to $300,000, so having this insurance can spare you a massive bill.

Comprehensive Travel Insurance

Comprehensive travel insurance usually includes the following types of cover:

  •        Trip cancellation and trip interruption insurance
  •        Baggage cover
  •        Medical and dental cover
  •        Emergency evacuation cover


This type of coverage is standard for most comprehensive travel insurance, but there are typically add-ons for more specific scenarios.

Additional Coverage Options

Sometimes standard travel insurance won’t cut it. If you’re heading into a dangerous area, plan on taking part in high-risk sports, or live with a pre-existing medical condition, you may need to opt for additional coverage. Below, we look at a few examples of additional coverage you might not have considered. 

Personal Liability Coverage

Personal liability coverage protects you in case you accidentally cause property damage or injure someone while travelling. This is most commonly used for car rentals or adventure sports. It provides basic protection against lawsuits and claims for damages if necessary.

Accidental Death or Dismemberment Coverage

Accidental death or dismemberment coverage provides a lump sum payment in the event of death or loss of limbs or sight due to an accident during your trip. While this is a scary scenario to consider, having this coverage can help support you or a loved one in case of such a tragic accident.

Legal Assistance Coverage

Legal assistance coverage provides support and financial assistance in case you require legal advice or representation while travelling. If you encounter issues with lost or stolen documents, personal injury claims, or disputes with travel providers, legal assistance coverage can help.

What Does Travel Insurance NOT Cover?

Now that you know what travel insurance covers, let’s look at things that limit or cancel out potential insurance claims. Most insurance will not cover the following:

  • Predictable, foreseeable events: If you book a trip while weather reports predict a hurricane or natural disaster, you likely won’t be able to claim anything back for a cancelled trip.
  • Epidemics: Epidemics are somewhat tricky ground. Not all of them will exclude you from coverage. The Covid pandemic resulted in several insurance policies adding clauses specifying that trip cancellations due to lockdowns will not be covered. If you’re unsure, double-check your insurance’s specific policies on epidemics.
  • Wars: If there’s a war at your destination and you end up hurt or injured, travel insurance will likely not pay for it because the risky circumstances were well known. To get coverage for risky areas, you will need to seek out specific insurance.
  • Pre-existing medical conditions: Again, pre-existing conditions are tricky. Some travel insurance won’t cover medical emergencies related to pre-existing conditions unless specified.
  • Risky activities: If you participate in adventure sports and end up injured, standard travel medical insurance will not cover it. To get coverage, you need to add adventure sports coverage or something similar to your policy.
  • Government travel restrictions: If a government imposes a travel restriction before or while you book your trip, you will not be able to file a claim.

Overall, if you know things will go wrong or are reasonably certain your travel has unavoidable risks, standard travel insurance will likely not cover it. To overcome this, find specific insurance to ensure you cover all your bases.

Final Thoughts

Travel insurance can provide peace of mind and help you cover expenses if things go wrong during your travels. Knowing what travel insurance does and does not cover is vital to make sure that when you need it most – you’ll be protected. 

Safe travels!

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Author Bio

Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook.