What Travel Insurance Does and Doesn’t Cover

When you book travel with a credit card, you usually get some kind of travel insurance — but what it doesn’t cover can leave you vulnerable. Here’s what you really get, and why you might want to buy additional coverage.

Richie Pope

By Kristin Wong

Planning for vacation is fun. We make lists of clothes to pack and museums to visit, anticipating the relaxation and fun to come. It’s considerably less fun to think about everything that could go terribly, horribly wrong.

Your flight to London could get delayed, leaving you stuck overnight in Boston. Your luggage could end up in Hong Kong while you’re en route to Tokyo. Snorkeling off the coast of Kauai, you could fracture your ankle on a volcanic rock.

Travel insurance exists for all of these scenarios and more, but it’s not necessarily a must-have expense, either. Before you decide whether or not it’s right for your own trip, you’ll want to consider a number of factors, from where you’re going to what kind of coverage you may already have.

Choose The Right Insurance for Your Trip

“Typically, travel insurance is a one-time payment that can be made up to 24 hours before your trip,” said Matthew Barr, a travel insurance agent who has worked in the industry for over a decade. “It comes in many forms.” The two main types of insurance are foreign medical coverage and trip cancellation, but you can find policies that cover lost luggage, kidnapping, and almost anything else that could go wrong while you’re traveling.

Of course, these niche insurance products rarely pay out and probably aren’t worthwhile for most trips. “There’s a buyer for everything, and if you want to feel safer with your ‘flight accident’ insurance plan, by all means please purchase one,” Mr. Barr said. “The big concern should be when traveling abroad, what happens when you have to use health insurance.”

Most standard travel insurance packages cover emergency health care along with trip cancellations and delays. Some policies throw in a few extras anyway, like lost luggage coverage. Even if you’re not worried about getting hurt abroad, you may still consider travel insurance for the cancellation coverage, particularly if you have a long and expensive vacation planned. Premiums are typically 5 to 10 percent the cost of your trip, so insurance for your $3,000 island-hopping adventure in Hawaii would run you between $150 and $300, which is a relatively small price to pay to ward off any schedule conflicts thanks to emergencies. Most plans last for the entirety of your trip or for 30 days, whichever is shorter, Mr. Barr said.

A policy that covers you for non emergency cancellations will be more expensive, said Beth Godlin, president of travel insurance provider Aon Affinity Travel Practice. “A premium of anywhere from 20 percent to 50 percent more is typical,” she added. Aside from single trip plans, most carriers also offer annual plans for frequent travelers, which Mr. Barr said run anywhere between $30 and $90 a year.

Check If You Are Already Covered

Some health insurance plans may cover you while you’re traveling abroad, in which case you might not need to worry about buying anything else. That said, travel coverage will vary depending on your health insurance policy, so check your explanation of benefits, which you can likely find online. Otherwise, you can call your insurance carrier directly and ask them about travel coverage. Some policies may only cover specific illnesses, while others may not cover you at all. “See if your primary health plan covers foreign travel, but in the event it doesn’t, you should pick this plan up,” Mr. Barr said.

Even the most comprehensive travel insurance plans exclude pre-existing conditions, although some offer a waiver for travelers who buy a policy on or around their “trip deposit date,” the first day you booked and purchased expenses for your trip, like a flight, tour or lodging.

Let’s say you’re bringing your fancy DSLR camera to take pictures, or your laptop, in case you need to squeeze in some extra work. The good news is, your homeowner’s or renter’s insurance policy may cover these items while you’re traveling. Many of these policies include off-premise protection, which insures your belongings even if they’re outside of your home. So if your camera is stolen, you might not even need travel insurance to protect you.

The Limits of Credit Card Protection

Some credit cards come with a form of insurance, too. For example, the Chase Sapphire Preferred card, a popular one among travelers, comes with cancellation insurance of up to $10,000 per covered trip, usually for emergency-scenarios, like severe whether or bodily injury. And the Citi Prestige Card comes with baggage delay coverage of up to $500 per traveler, per trip, if your bags don’t get to you within three hours of your arrival. As a general rule, if your card comes with a fee, there’s a good chance it includes some kind of travel insurance perk.

There are caveats, though. For one, your card probably doesn’t come with “cancel for any reason” protection. Most credit cards have strict rules about when they will and won’t reimburse you for canceled travel, so make sure to read your card’s explanation of benefits online, or just call and ask. “If your plan does have a cancel-for-any-reason clause, be sure you understand the terms,” Ms. Godlin said. “A percentage of the trip might be either refunded in cash or returned in a credit, as those terms can vary dramatically.”

In other words, your credit card might not offer the same amount of coverage you’d get with a separate insurance plan. It might only reimburse you for up to $1,500 worth of travel expenses, while you can buy a third-party plan to cover the full cost of your trip. Most credit cards don’t cover emergency medical care abroad, either. Finally, in order to be covered, you have to pay for your travel with the card in question, and coverage might exclude travel that you paid for with rewards points.

It’s certainly worth looking into your credit card’s policy to see if you are covered, but be mindful of these gaps.

Extra Perks of Third-Party Travel Insurance

If you do decide to buy separate travel insurance, you can purchase it through an independent carrier (Allianz and Nationwide are two of the most popular options) or directly from the airline or agency you used to book your travel. And you might as well take advantage of the perks that come with coverage, too.

Many policies include some level of concierge service. “This might include assistance with a lost passport, finding appropriate medical care, or obtaining travel information while abroad,” Ms. Godlin said. A concierge may also be able help you book tours, plan transportation to and from the airport and make restaurant reservations.

Again, most standard policies cover baggage delays and travel delays, so if your flight to London does get delayed in Boston, your insurance may cover the out-of-pocket cost of booking a hotel that night. And if the airline loses your luggage, your policy might reimburse expenses like toiletries or clothing that can hold you over while you wait for your bags to arrive.

If you’re concerned about getting hurt abroad or canceling an expensive trip, travel insurance may really be worth it. Chances are, you probably have some form of coverage with your existing insurance providers or a credit card, but if you don’t, insurance is a relatively small price to pay to put an end to the worrying. That way, you can get back to anticipating your trip instead.

This article originally appeared in The New York Times.