Travel insurance

• Never travel without adequate insurance — You never know what can happen during your adventure. Under-insured or uninsured travelers can be wiped-out financially or stuck overseas.
• Most travel insurance is not appropriate — Most “travel insurance” is for short-term vacationers or business travelers. Independent travelers have distinct needs that require customized policies.
• What risks are posed by independent travel? — Assess the risks you might encounter during your trip and the odds of a harmful event happening. They vary by your destinations and activities as well as your age and health.
• What are the consequences of something bad happening? — You could be ill, injured or feel emotional loss and there are hassles involved with any loss. But insurance is mostly about financial loss. Estimate whether you could endure the loss uninsured if something bad happens, or whether it would be too much to handle.
• Know what is not covered & how to get coverage for it — There are listed “exclusions” to coverage (notably any pre-existing medical conditions you have or any “high risk” activities you undertake). In some cases you can buy an extra cost rider to include coverage. 
• Understand coverage limits — Your insurer will set maximum amounts for each type of coverage. There will also be deductibles or co-insurance, where you pay the first portion of the loss. 
• Can you make changes after you start your trip? — Can you add to your coverage or extend the duration of your policy?

Note: views expressed below are our own opinions and your needs may differ. How to Travel is not responsible for your travel insurance decisions.

Travel insurance has to be the most tiresome thing on your trip preparation To Do List. Some travelers (especially the young, healthy and low budget variety) may ask, “is travel insurance necessary?” Yes, it is. Because bad stuff can happen to anyone, anywhere, anytime. You simply must travel insured.

It’s hard to pick only the essential travel insurance you need from all the coverage you’re encouraged to buy. There are so many variables and so much fine print. Bear with us — our travel insurance advice is tailored for independent travelers and will help make your decision-making as straightforward and cost effective as possible.

What is travel insurance? 

It’s reimbursement of financial losses for harmful events that you may encounter during your travels. Both the type of risk and the odds of something bad happening vary for different travelers, different destinations, different activities and different trip durations. You may already have some coverage from home, in which case travel insurance may serve only to plug any missing coverage or top up underinsured risks. Lacking any coverage from home, many travelers will have to buy a policy that provides all the coverage required.

You must assess your needs, research what coverage you may already have, calculate what extra cover you need and shop to get it. 

Insurance policies are strict legal documents. Before you buy, you need to read — and understand — every word of the policy you are considering. Don’t skim and don’t get lost in the legalese. Insurance companies are popular targets for consumer complaints and some companies deserve it. But most complaints can be traced to a policy holder who misunderstood the policy. Make sure you know:

• What is specifically included?
• What is specifically excluded?
• What is excluded because it’s not specifically included? (Yeah, you read that right.)
• When does “worldwide travel insurance” not cover some countries or provide insufficient coverage for them?
• What is the maximum pay-out by type of claim and is it sufficient?
• What processes and conditions apply to making a claim?

There’s no way around doing your own due diligence, but we’ll help you figure it out. 

Know what risks you need to cover

The first step towards arming yourself with the right travel insurance is to ask:

• Risks — What could go wrong?
• Odds — What is the chance of any risk occurring?
• Consequences — If something bad happens, can you endure the financial hit?

Don’t expect an exact prescription from thinking these things through. Rather, you’ll have an approximate idea of what insurance coverage you need.

Risks: what harmful events could happen during your trip

The coverage offered by travel insurance suggests what the risks might be. Don’t be alarmed by the number and severity of them: most travelers complete their journeys without any problems at all.

• Medical — You get seriously ill or injured, requiring costly hospitalization and treatment.
• Medical evacuation — You get seriously ill or injured far from a high quality medical facility and have have to be safely and swiftly transported. You may also need to be transported home, perhaps with medical facilities and personnel. Worse, you die and your body needs to be repatriated.
• Pre-trip cancellation — You’ve pre-paid for flights (or other transport), accommodations and/or activities. But, for reasons beyond your control, you have to cancel the trip.
• Trip interruption — You’re already on your trip and still have pre-paid expenses, but, for reasons beyond your control, you have to go home.
• Baggage & personal effects — Your main bag and everything in it gets lost or stolen. A valuable item, such as a phone, camera or laptop gets lost or stolen.
• Trip delay — Your flight gets delayed or cancelled, forcing you to stay at your point of departure until an alternative flight is available.
• Baggage delay — An airline fails to deliver your bag upon arrival. You don’t have toiletries and a change of clothes to hold you over until your bag arrives.
• Rental car — You don’t have enough coverage for vehicle damage, vehicle theft, theft of stuff from the vehicle and/or personal liability in the event of an accident with your rental car.
• Personal liability — A case is brought against you in a foreign country alleging negligence causing physical injury or property damage to a third party.
• Accidental death & dismemberment — You die. Or you suffer loss of sight in one or both eyes. Or you lose one or both of hands or feet.
• Natural disaster or political evacuation insurance — You find yourself unable to use conventional transport to leave a place that is no longer safe due to natural disaster, civil disorder or military activity. 
• Identity theft — Someone gets your personal details or your passport and other documents, then uses your identity for criminal purposes.

There are a few other types of “boutique” coverage that independent travelers would need only in rare situations.

Odds: the probability of a harmful event during your trip

Independent travelers are not like vacationers and business travelers. We usually have lower pre-paid expenses, longer trips, more foreign destinations and less stuff in our luggage. And independent travel is an adventure that you make up as you go, so there’s a much higher degree of uncertainty. It’s no surprise that our needs for travel insurance are different from vacationers or business travelers.

As a DIY traveler, you are away from familiar places and doing new things almost every day. Travel will expose you to new risks: poor judgement, lapse of attention or bad luck could result in a harmful event. But diligent personal security and adequate insurance will allow you to enjoy your trip without worrying about financial losses.

Everything we do in life bears some risk. At home, in familiar environments and doing predictable activities, you can limit your risk. Travel — especially independent travel — doesn’t allow you to control risk as much as you do at home.

Factors that affect travel risk include:

• Where you go — Generally, the poorer the country, the higher the risk. If you travel in rich countries, much of the risk has been mitigated for you. Examples:
  • Your risk of illness is higher in countries with poor sanitation and hygiene.
  • Your risk of injury is higher in countries that suffer from high vehicular accident rates.
• Your style of travel — It might seem that the higher (more expensive) your style, the lower the risk, but high style travelers are not risk free. Examples:
  • Budget travelers staying in a grass beach hut bear an increased risk of theft. Travelers staying only steps away in a walled lodge have much less risk.
  • Thieves know that high style travelers have more valuable stuff and target them when they can.
  • High style travelers usually check their luggage because they travel with more stuff, which increases the risk of baggage delay or loss.
  • Budget travelers use more public ground transport, which presents some risk of theft.
  • High style travelers may choose a private car, but that increases the risk of vehicular accidents and personal liability claims.
  • Budget travelers eat more street food, increasing risk of illness.
• The experiences you pursue — Your choice of activities, combined with your judgement, abilities and street smarts will affect your risk of a harmful event.
  • Your risk of injury increases if you do “high risk” activities, such as trekking, scuba diving or adrenalin sports.
  • Your risk of getting your pocket picked, having your bag snatched or suffering a mugging depends on where you find yourself and when. 
  • Your age — Insurance companies care about your age. You might be over 60, super-fit and healthy, but older travelers make more medical claims. (Senior’s travel insurance can get costly.) 
• Your health — Regardless of age, if you are managing a chronic health issue — what insurers call a “pre-existing condition” — travel could increase the risk of recurrence or complications. (Insurers don’t like to cover that risk, but you have options.)
• Trip duration — Combine all these with a long trip duration, many transport legs, numerous destinations and many activities. Risk is proportionately increased.

Don’t retreat from risk and limit yourself to “safe” places and experiences. Go where you want and do what you want. But use good judgment and personal security habits to reduce your risk. Insure against what’s left.

From this list, you should have an idea of the relative risk of your trip. Keep that in mind when you look at the options for insurance coverage below.

Consequences: the fallout of a harmful event

Each harmful event has a financial cost and a “hassle factor” associated with it. Most insurance covers financial loss, but a few types of coverage address the hassle factor by helping you resolve your problem.

Financial loss

• Known costs — You can know or estimate the cost of some risks. For example, you know the value of your stuff. If your phone gets lost or stolen, you know the approximate replacement cost.
• Unknown costs — You have no idea of the possible costs of other risks. They could range from a little to astronomical. If you have to see a doctor for a mild infection, the cost should be modest. But if you are struck by a car and injured, hospitalization and a medical evacuation home could easily exceed $100,000.

Hassle factor

Every time a harmful event occurs, you have to deal with the personal and bureaucratic fallout.

• Personal — This can be physical burden of being ill or injured. Or it can be emotional, such as the loss you feel when something of sentimental or financial value is gone.
• Bureaucratic — Just when you’re coping with these personal issues, there are bureaucratic processes to manage. For example, if you have insurance for your personal property and your phone gets lost or stolen, there are many steps to filing a claim, getting paid and replacing the phone.

While you may associate insurance with claiming for a financial loss, insurance companies can get involved in mitigating hassles for you. The most obvious intervention is dealing directly with medical services providers. Some premium (more expensive) policies offer a range of hand-holding assistance with your travel logistics when a harmful event throws you off.

A few types of insurance aren’t about financial losses, but about helping you with hassles. For example, identity theft coverage is mostly to provide services to help you recover your identity and good standing with governments, credit rating agencies and other parties.

That said, you will most often have to work through the hassles of a harmful event yourself. 

Odds X Consequences = your need (or not) for insurance

What do you really need?

The insurance industry offers a wide menu of coverage, but you probably don’t need most of them. The best travel insurance can be very little, covering a few key risks. Many independent travelers get by only with medical and possibly with medical evacuation insurance. The need for anything else depends upon your situation.

Lower on this page is a list of the risks commonly covered in travel insurance policies. Go through them and ask yourself if you think you’ll need the coverage. 

Destinations: a travel advisory can void your insurance Expand

WARNING: if your government issues an “avoid all travel” warning, your insurance coverage will generally not apply if you travel to that destination or stay there after the warning is issued.

Your government doesn’t want to have to rescue you from a dangerous security situation or serious disease outbreak. Neither does your insurance company. The trouble is that governments are over-cautious about security. Their “avoid all travel” warnings are usually warranted. But “avoid non-essential travel” is often applied to areas that may not deserve such a harsh warning. 

• Where to get travel advisory info — The United States, Canada and Australia all have a summary page with clearly marked advisories. The UK buries their advisories under an index page, then in the first paragraph below the map in the country article.
• Levels of advisory — The highest level of advisory by the US is a “warning.” For Canada, it’s, “avoid all travel.” For Australia it’s, “do not travel.”  For the UK it’s, “advise against all travel.” These advisories mean that travel to the country will expose you to unacceptable security or health risk. Your insurer doesn’t want to take that risk either.
• Entire country or just part — Note that in the advisory sometimes applies only to part of a country. For example, at time of writing, the Philippines had three different advisory levels. Luzon and the Visayas were okay. Northern and eastern Mindanao were “avoid non-essential travel.” The entire western half of Mindanao and the Sulu archipelago were “avoid all travel.”
• Expanded exclusion — Even if the warning is not so dire, limited to “avoid non-essential travel,” your insurer may exclude coverage. Less severe advisories, which most often refer to a high crime problem, still allow coverage in the country.
• Advisory status can change — You need to keep track of the advisory status when planning your trip, when applying for insurance and again as your arrival in the country nears. You could buy insurance to travel to Country X, only to have its status change to “avoid all travel” before you arrive. Your insurance will not be valid if you go anyway.
• What if advisory status changes when you’re already there? — What if you’re already in a country when your government issues an “avoid all travel” warning? Your insurer will allow at least a few days for you to leave before your coverage is withdrawn. Find out what their policy is on this as soon as you become aware of the change in status. Governments issue dire warnings for good reason, so staying on is imprudent at best.
• Keep up to date — Most governments have an e-mail list to notify travelers of changes in advisory status. If you’re going to any countries that might change status for the worse, sign up for notification.
• Your losses can be covered due to a change of advisory status — Trip cancellation or trip interruption insurance will compensate for any prepaid expenses you lose. Coverage applies only to a change in advisory status after your purchase.

For more, see our page on destination security risk.

Match coverage to your risks

Decide what insurance you need… and what you don’t.

coverage types

Quality features of good travel insurance

It’s difficult to compare travel insurance policies “apples-to-apples.” Instead, they’re “apples-to-oranges.” This is partly because there are so many variables in coverage: types, limits, exclusions, terms & conditions. And it’s partly because your needs are not the same as other independent travelers: your apple is someone else’s orange. Still the generic Quality Factors apply to any travel insurance policy. Apply them to your personal needs and use them in your assessment. 

All of the risks listed above can be covered by insurance. With a few exceptions, you can’t select them one-by-one, like dishes off a restaurant menu. Instead, the insurance industry has bundled different types of coverage into packages (discussed below). Your challenge is to find the package that best meets your needs at a reasonable price. Before that, you need to understand what each type of coverage can do for you, then decide whether or not you need it and, if so, how much.

Coverage types

For each type of coverage, the insurance company will list what specific situations and things are covered. Sometimes they will also list what is not covered, but these are just examples from what could be a longer list. You can assume that anything not explicitly included is excluded. Read the list of inclusions very carefully and be sure you understand what is in and what is out.

Exclusions and riders

The insurer will explicitly list conditions and situations where their insurance does not apply, most commonly to provide medical or medical evacuation cover for pre-existing medical conditions or your intention to do “high risk” activities during your trip. The list of medical exclusions can be long. High-risk activities are usually listed as what is included, so you can assume that any activity missing from the list is excluded.

If you find that one or more exclusions make the policy unacceptable, you may be able to buy a rider to the policy to make that exclusion an inclusion. Riders always come with a price tag that you will have to factor in to your overall cost vs value decision. If a rider won’t solve the problem, or if it costs too much, you’ll need to find another policy with more inclusive and affordable coverage.

Extension of medical coverage after you return home

Most travel insurance coverage ends the day you arrive back home. But what if your eligibility for your usual health insurance back home will not kick in on the day of your arrival? While the risks of a large medical expense are somewhat reduced at home, you can’t be without cover. 

Extension of medical coverage under your travel insurance policy for the period it takes to get re-enrolled in your home health insurance is essential for many travelers. This is especially true for public health insurance schemes. Most Canadian provinces, for example, will remove your enrollment after 6 months abroad and then take 2 or 3 months to re-enroll you upon your return.

First, know the rules around your home health insurance. Then, if necessary, include extension of travel insurance medical cover in your “must have” list.

Coverage limits

Every defined cover has an explicit maximum amount that the insurer could pay out. These limits matter most for medical, medical evacuation and baggage (including per item maximum). Some companies offer two or more levels of policies, where the more costly policies have higher limits. Other insurers will allow you to adjust your coverage limit, with the premium going up for higher coverage limits. 

Deductibles (“excess”)

Deductibles are the part of a claim that you must pay before your insurer pays anything. For example, if you have a claim of $250 with a deductible of $250, then you have to cover all the loss yourself. If you have a claim of $1000 with a deductible of $250, then you absorb $250, while your insurer covers the remaining $750.

What are the deductibles on each type of coverage and can you choose different levels? You will often have a choice of deductible, within a range offered by the insurer. The lower the deductible, the more costly the insurance premium. If you want a higher level of coverage or lower premium, you may have the option to choose a higher deductible. It could be worth going for a higher deductible on a lower limit to save money on the premium, but only if the chances of loss are slight and the cost of a loss won’t be too painful.

Co-insurance

Co-insurance is an alternative to deductibles, where you and your insurer split the cost of a claim on a percentage basis. For example, if you have 20% co-insurance on a $2000 loss, you pay $400 and your insurer pays $1600. Think carefully about how much your percentage could be in money terms.

Making changes after your purchase

In some jurisdictions, including the US, you have a “buyer’s remorse” period in which you can cancel your policy for a full refund. In the US, it’s ten days.

But that’s not what we mean in this section. As an independent traveler, you can change your mind about your trip after departure. Is your insurance as flexible as you are?

Adding to cover

Many travel insurance policies are set in stone on your day of departure. But suppose your trip didn’t initially include the United States, but now you want to go there. Many policies don’t include medical coverage for the US because of the extremely high cost of hospitalization and treatment. The same goes for other countries, notably Canada and Japan.

• Best: get a policy that allows you to add coverage — If your original policy allows you to add coverage after it starts (for an additional premium), then you’re good to go.
• OK: get all the cover you need to start with — Yes, it will cost more to cover the contingencies, such as a trip to the US you might not make, but at least you won’t be constrained.
• Bad: buy separate cover — If you have to buy a separate plan to add the cover you need, it will cost big time.
• Oh no! Don’t go — If you can’t add the cover you need, such as additional medical for the US, maybe you will have to cancel that part of your trip rather than assume the risk of catastrophic loss.

Extension of policy duration

What happens if your trip is running longer than you expected and your original insurance is set to expire? You don’t want to find yourself unprotected in some distant land. If there’s any chance that you’re trip will outlast your policy (generally 12 months maximum), you need a plan to continue coverage. DO NOT let your coverage lapse.

• Best: get a policy that allows extension — Most policies do not permit you to extend coverage duration once you’ve left home. Maybe you should find a policy that does. If you don’t know what your longest trip duration could be, check the maximum policy extension period.
• OK: buy a new policy — You could try to buy a new policy, although it could be difficult to find one that permits you to start when you’re already abroad. The net cost of this solution will be far higher than getting an extension on the original policy.
• Oh no! Go home — Rather than continue your travels without coverage, you could have to cut your trip short and go home before your original policy expires. If your insurance lapses by a week, you could be in big trouble. Even a single day uninsured can cost a fortune.