Safety has a whole new meaning now that we’re in the midst of a global pandemic. Many of us are taking previously unimagined—though absolutely vital—steps to protect ourselves in its wake. COVID-19 has, of course, modified pretty much every aspect of our lives. But those of us who love to travel are feeling the sting in ways that our homebody friends may not.

To put it bluntly, many of us have been grounded. The number of commercial flights operating globally has plummeted and job losses in the travel and tourism industries are staggering. Depending on which country you call home, whole sections of the globe might be off-limits to you. Sadly, the United States is restricting visitors from dozens of countries, including all of Western Europe. And U.S. residents are persona non grata around the world, too. 

Feeding Your Wanderlust Right Now

Fortunately, U.S. travelers still have plenty of domestic travel options and a stunning variety of sites to see, cultural experiences to enjoy, and landscapes to explore—as do visitors from non-restricted countries. California is home to many of them. Our great outdoors create a wide-open paradise for socially distant adventures. And our state government is doing its best to ensure citizens’ safety, including employing innovative technologies to stop the spread of infection.

Protecting Your Vacation

Travel has always been unpredictable. Seasoned sightseers have learned to roll with the punches, from camera malfunctions, to late-arriving baggage, to missed connections. But in these uncertain times—and with everything else we have on our minds—we think most travelers would agree that it’s not the season for unpleasant surprises. That’s why more people are considering purchasing travel insurance than ever before. Some insurers are reporting record travel insurance sales increases, despite the fact that travel itself is on the decline.

Does buying travel insurance in advance of your next vacation make sense for you? Let’s unpack the topic a little bit so you make a more informed decision.

What Does Travel Insurance Do?

Travel insurance is essentially a financial product that deals with the various costs associated with travel; it can’t prevent mishaps like canceled flights, misplaced luggage, or natural disasters. (It would if it could!) To make a travel insurance policy claim, you have to have experienced a loss that can be expressed in dollars and cents (or euros, rupees, pesos, etc.) Travel insurance won’t make you immune to disappointment or annoyance, but it can prevent that adding-insult-to-injury feeling you get when you have to pay for what amounted to a lousy experience. 

What Does Travel Insurance Cover?

Like many types of insurance policies, travel insurance is customizable. The best travel insurance for an American family camping in Anza-Borrego Desert State Park will differ from the best policy for a Singaporean senior planning a culinary tour of Napa. And you should consider your specific needs and compare policies carefully before purchasing one. But the two most important categories of travel insurance are cancellation and travel medical coverage. Baggage insurance and auto insurance are pretty self-explanatory, so we’ll leave those aside for the moment.

Cancellation coverage is not only a term used to refer to a general category of coverage, but also the name of a specific type of insurance. That’s a little confusing. But we’ll talk about it in the second sense here. Cancellation coverage reimburses you for your non-refundable travel expenses when you have to cancel a trip. Those may include any hotel deposits you may have paid, tuition for the cooking classes you signed up for, or the purchase price of a non-refundable airline ticket. Actually, that last one is among the best reasons to consider cancellation coverage. From a practical and financial perspective, cancellation coverage transforms non-refundable flights—which often come with much lower price tags—into traditional flights. But when you cancel your flight, instead of getting your refund from your air carrier, you’ll get it from your travel insurance company.  

Insurance policies are probably not your idea of light reading. But read you must. Among the terms laid out in a cancellation policy are those circumstances considered by the insurer to be adequate reasons to cancel. Generally, an injury or illness requiring treatment by a doctor is a covered event. Some policies allow you to cancel and will reimburse your expenses if a travel companion or family member falls ill, too. A job loss or jury duty may also be a covered reason. Here’s one scenario we’re seeing more often: Hotels are shuttering their doors for health or financial reasons. That’s another occurrence that may be covered under the plan you purchase. But policies vary. Reading the fine print is essential when shopping for coverage.

Cancellation coverage has a close cousin: trip interruption coverage. It does many of the same things as regular cancellation coverage, but it only kicks in when you cancel a trip that’s already in progress. Trip interruption coverage, too, will reimburse any non-refundable payments you’ve made. It will pay to fly you home under a variety of circumstances, including an illness or injury you suffer while traveling or an emergency back home. Some policies will also reimburse you for the cost of flying back to your destination once your problem has been resolved. Need we say it again? Perhaps not, but we will: Every policy is different, so know what you’re paying for before you decide on an insurance plan. 

Then there’s the Mount Whitney of cancellation coverage: Cancel For Any Reason (CFAR) insurance. You’ll pay considerably more for a CFAR policy—probably about 50 percent more than for traditional cancellation coverage—but CFAR coverage affords you the most flexibility. Your insurance company doesn’t have a say in whether your reason for canceling your trip is a good one. You’re the arbiter of that. Flimsy, flighty, or solemn, all reasons are eligible for coverage. And at a time when circumstances fluctuate, whether with the wind or due to an emerging COVID-19 hotspot, an increasing number of travelers are opting for the greater peace of mind CFAR affords them. Most CFAR policies do require you to provide 48-hour notice before canceling your trip. But since CFAR is often an option you add to a standard cancellation policy, if you can’t give that much advance notice, you may still be eligible for reimbursement under the standard portion of your plan.  

Travel Medical Insurance for U.S. Residents

Whether you need travel medical insurance when visiting California depends largely on where you’re coming from. In the U.S., most regular health insurance policies provide coverage to customers when they’re traveling within the 50 states. Generally, that coverage extends specifically to emergency services: the care you need to get you back in shape to travel home again. It may not cover a surgery that could legitimately be postponed. Some health plans also make a distinction between urgent care and emergency care. So, before you take off on a trip or decide whether you need to take out a separate travel medical policy, it’s worth calling your health insurer to find out what kind of services will be reimbursed under your policy—particularly if you belong to an HMO or if your plan has separate reimbursement schedules for in-network and out-of-network providers.

If you’re coming to California from outside the U.S., travel medical insurance is something you should seriously consider. You’d like to think that there’s cross-border cooperation on matters as serious as medical care, but unfortunately, that’s just not the case. Medical providers in the U.S. don’t accept health insurance that’s issued in other countries, even if it’s government-sponsored. Medical bills in the U.S., including those for emergency services, are among the highest worldwide. And individuals, not the state, are responsible for paying them. When you purchase travel medical insurance, you can expect your policy to reimburse you for the cost of care you receive in the U.S. The coverage is reassuringly broad, too: emergency transport, diagnostic services, hospitalization, surgery, prescription medicines, and office visits are typically covered services.

The Bottom Line

Travel insurance is mandatory in some countries, and some industry insiders predict that others will soon follow suit. But for now, we all have a choice. Here’s one way to look at yours. As a percentage of the cost of your vacation, the price of travel insurance is relatively small. On average, you’re looking at 4 to 8 percent of your travel budget for any given trip (unless you choose CFAR coverage.) With any luck, you’ll never need to file a travel insurance claim. But that’s the nature of any kind of insurance. We buy insurance, in part, to have less worry in our lives. And who wouldn’t want a worry-free vacation?