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Americans are looking forward to beaches, sunny skies and European culture, based on travel insurance data for upcoming holiday-season trips.
As potential problems with flight cancellations, delays, wintry weather and—yes, still—Covid loom on the horizon, consider buying travel insurance to help if the unexpected casts a dark cloud over your holiday trip.
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Sun, Sand and Europe Are in Demand
Domestic trips are popular for the holiday season this year. That makes sense considering many travelers visit their families over the holidays.
But for some folks, a trip south of the border is better than a visit with the in-laws. Four out of the 10 most popular destinations for holiday travel this year are renowned for their fabulous beaches.
European countries are also popular destinations for holiday-season trips, based on data from Squaremouth, a travel insurance comparison site.
Mexico, Bahamas, Israel, France and Germany are the most popular destinations among those buying travel insurance for holiday trips, topped only by the U.S.
Most popular 2022 holiday travel destinations
International Jetsetters Outspending Domestic Travelers
Holiday travelers heading out of the country this year certainly aren’t skimping—the average trip cost is a bit over $6,000. International travelers are spending an average of $470 more for trips abroad than those who are staying in the U.S.
Average 2022 holiday trip cost and travel insurance cost
Covid Still No. 1 Concern for Travel Insurance Buyers
While travel restrictions have eased or been eliminated for many destinations, travelers are still apprehensive about Covid.
Finding travel insurance for Covid was by far the top concern of American travelers who purchased travel insurance for holiday travel. Nearly a quarter (22%) searched specifically for travel insurance plans that include Covid coverage and bought a plan that covers Covid-related problems.
Top concerns among holiday travelers
Must-Have Travel Insurance Coverage for Holiday Trips
“The holiday season is a fun and festive time of year, but also an extremely busy time to travel,” says Daniel Durazo, spokesperson with Allianz Partners USA, which oversees Allianz Travel.
“Between annual family gatherings and bucket-list vacations, it’s important to protect your trip investment and pack peace of mind with a travel insurance policy that fits your vacation. It’s likely the best gift you can give yourself for holiday travel this year.”
You’ll want to look for a travel insurance policy that covers:
- Trip cancellation
- Trip delay
- Trip interruption
- If you have multiple flights, consider a policy that includes missed connection coverage.
- In addition to these benefits, international travelers should also have medical expense travel insurance.
It’s imperative to read your travel insurance documents carefully to understand the scope of your travel protection benefits. Here are how benefits may apply in common holiday travel scenarios.
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Holiday Trip Cancellation Travel Insurance
The trip cancellation insurance within a travel insurance policy provides a safety net for financial losses if you can’t go on your holiday vacation due to unforeseen events.
For example, say you planned a sunny escape for your family with a Turks and Caicos trip for the holidays, arranged for several hotel rooms in a boutique-style hotel on the beach and even chartered a snorkeling boat for a private day of adventure. Many of these trip expenses must be paid in advance, particularly during peak season.
If you fall on an icy driveway and break your ankle, that could put a halt to your tropical getaway. Trip cancellation insurance generally covers injuries to you, your traveling companion and family members, so you can file a claim to recover 100% of your pre-paid, non-refundable trip deposits.
Trip cancellation benefits typically also apply if you cancel due to severe weather, a sudden family emergency, the death of a travel companion or close relative, unplanned jury duty, a national transportation strike or military orders.
It’s important to note that not all reasons to cancel will be covered by travel insurance. For instance, suppose your weather app shows rain for five straight days at your tropical destination and you don’t want to spend your holiday vacation playing board games and watching movies. You would not be eligible to file a trip cancellation claim.
“Cancel for any reason” travel insurance
For the most flexibility to change your travel plans—due to issues like a rainy forecast, fear of travel, a change of heart or family discord—consider upgrading your standard travel insurance plan to include “cancel for any reason” (CFAR) travel insurance.
This coverage gives you the flexibility to cancel your trip for reasons that wouldn’t be covered by standard trip cancellation insurance and still receive some reimbursement.
CFAR coverage does come with its own rules:
- Reimbursement is generally 75% of your non-refundable deposits, not 100%.
- There’s a purchase window of usually 14 to 21 days after your first trip deposit. After that, you won’t be able to add CFAR.
- You must cancel the trip no less than 48 hours before your departure date.
CFAR tacks on an average of 50% to the cost of a base travel insurance price. But it’s a coverage worth considering if you want the ultimate flexibility to bail on your trip and get some reimbursement.
Travel Delay Insurance for Holiday Getaway Holdups
“This year, travel delay coverage will be on everyone’s wish list as holiday travel ramps up along with the expected delays and cancellations,” predicts Durazo.
Travel delay insurance reimburses you for extra expenses you may incur while you’re delayed due to a reason listed in your policy. These costs may include meals, transportation and lodging.
Travel delay insurance also compensates you for pre-paid travel expenses for the portion of your trip you miss by arriving late.
“Minimum delay times and coverage limits will apply, so read your policy to learn more,” adds Durazo. For instance, there may be a required waiting time of six or 12 hours before your trip delay benefits go into effect.
Travel delay insurance for wintry woes
“Most travel insurance policies include coverage for inclement weather-related delays and cancellations. Travel insurance, just like any other type, is only designed to cover the unforeseen. Similar to hurricanes, winter storms receive a name once they meet certain criteria. Once these storms are named, coverage can no longer be applied,” explains Megan Moncrief, spokesperson with Squaremouth, a travel insurance comparison provider.
The Weather Channel names winter storms once they meet at least one of the following criteria:
- National Weather Service winter storm, blizzard or ice storm warnings covering a population of at least 2 million.
- National Weather Service winter storm, blizzard or ice storm warnings covering at least an area of 400,000 square kilometers, or slightly larger than the state of Montana.
“Holiday travelers whose trips are susceptible to winter weather should consider purchasing a travel insurance policy early on in their booking process, to ensure coverage is in place prior to a storm impacting their trip,” Moncrief adds.
“This benefit can provide a full reimbursement if a flight is canceled or delayed due to weather for a specified amount of time, as well as if an especially severe winter storm renders the travelers’ accommodations or home uninhabitable.”
Related: The advantages of buying travel insurance right after you book your trip
Travel delays due to airline staff shortages
To avoid any unpleasant surprises, check your policy for very specific language regarding what’s covered by your travel delay insurance.
“Most travel insurance policies include very specific language stating what airline-related issues can be covered under their benefits. Typical reasons include mechanical failure, financial default, strike or weather. However, staffing issues are rarely specifically included,” says Moncrief.
If your travel insurance doesn’t cover a delay, you may be able to get help from the airlines, says Durazo. “Routine flight cancellations in the United States typically earn you either a seat on your airline’s next available flight or a refund of the unused portion of your ticket,” he says.
“When a flight is canceled or delayed due to a reason within the airline’s control, such as a flight crew shortage, some airlines may provide their passengers with a meal voucher and/or hotel accommodations,” says Durazo. “However, these policies vary by airline and situation and don’t offer the same level of coverage as travel delay insurance.”
Forbes Advisor scored airlines on the services they promise to offer following a flight cancellation or delay due to circumstances within their control. American, Delta, JetBlue and United earned the top ratings.
Missed Connection Insurance for Holiday Trip Hiccups
With flight cancellations at record levels, you may be considering missed connection travel insurance for your holiday trip if you have a multi-leg trip planned.
Missed connection insurance can cover pre-paid travel expenses you lose because you miss your connection and arrive late to your destination. You can also recoup additional transportation expenses you pay to catch up to your trip.
Missed connection coverage can help you in certain situations—but not all—so it’s smart to know the basics:
- Some basic travel insurance plans don’t include missed connection coverage, some offer it only for cruises and tours and some offer it as part of the benefits for flights, cruises and tours.
- Of the plans that offer it, some may only cover a missed connection due to inclement weather.
- Of plans that offer missed connection coverage for flights, some cover only those due to “common carrier delays.”
Meghan Walch, spokesperson with InsureMyTrip, says missed connection coverage varies by policy and company. Some may offer missed connection coverage for “any officially documented delay of your common carrier,” which could include staff shortages, while others may be limited to just covering delays due to weather.
The most important thing you can do to be best prepared is to get supporting documentation from your airline to support any future claims, she says.
Like travel delay insurance, missed connection coverage only applies to circumstances listed in your policy, and coverage limits and required waiting times apply.
“Should you miss your flight while watching the big game in the airport lounge, you’ll have to work with the airline to make alternate travel arrangements at your own expense,” warns Durazo.
Blues Traveler: Holiday Trip Interruption Travel Insurance
If you need to cut your holiday trip short and return home earlier than planned due to an emergency, your travel interruption insurance can help pay your way home. Benefits can cover a one-way economy ticket home, plus any forfeited deposits you will lose due to your early departure. This is helpful because last-minute flights—especially during the holidays—are in high demand and can be expensive.
“Interruption for any reason” travel insurance
Some travel insurance companies offer “interruption for any reason” (IFAR) travel insurance, an upgrade that allows you to return home early regardless of the reason. It generally provides 75% reimbursement for pre-paid, non-refundable trip costs. Note that IFAR benefits usually don’t apply until you are at least 48 hours or 72 hours into your trip—check your policy for the required time frame.
Travel Medical Insurance and Emergency Evacuation Coverage
If you are traveling outside the U.S. for your holiday vacation, it’s very important to have travel medical insurance. Your domestic health insurance will likely provide no or very limited medical coverage in foreign countries.
Before you travel, check with your health insurance carrier about what global benefits exist.
Additionally, Medicare isn’t accepted outside the U.S. That means the best senior travel insurance will include travel medical coverage.
“You don’t typically even consider these risks and while it’s important to protect the financial investment in a trip, you shouldn’t overlook the risks associated with an unexpected medical incident or emergency abroad,” says Don Van Scyoc, spokesperson with GeoBlue.
Travel medical insurance pays for doctor and hospital bills, medicine, lab work and X-rays if you get hurt or sick during your trip, up to your policy limits.
It’s also prudent to have medical evacuation travel insurance. A medical evacuation can easily cost tens of thousands of dollars and they are typically not covered by U.S.-based health insurance plans, says Van Scyoc. Even if they are, he says the costs for care and evacuation would be considered out-of-network and often you’d have to pay up front and then file a claim for reimbursement.
“Many international health care providers require payment up front before they will even treat a foreign patient. For these reasons, you should ensure you have adequate medical coverage while traveling abroad. Travel medical plans provide coverage and benefits typically not included in a domestic health insurance plan,” he says.
Baggage Insurance for Holiday Travelers
If you are ringing in the New Year in Paris and your bags decide they want to celebrate in Berlin instead, baggage insurance can provide some financial relief.
For example, Scott Adamski, spokesperson with AIG Travel, says AIG Travel policies include benefits that provide reimbursement if your luggage or personal items are lost, damaged or stolen, up to certain limits.
“On our Deluxe travel insurance plan, our baggage coverage maximum benefit is $2,500 and that means we would pay up to that amount for a covered claim,” he says.
It’s important to note, though, that while the overall limit is $2,500, Adamski says there are per-item limits. “On the Deluxe plan, this is $500 for one covered item, and once this has been met, additional covered items are capped at $250. There may be additional special limits for specific baggage contents (such as jewelry and electronics), and it’s important to review your policy for these details,” he says.
Keep in mind exclusions apply to baggage insurance—for instance, cash is usually not reimbursable if lost or stolen. Also note that you are compensated for the depreciated value, so it may not match the amount it costs you to replace items with new ones.
Baggage delay benefits help if your suitcases arrive late to your destination after a specified time listed in your policy. With this coverage, you can recoup money you spend on items you need to bridge the time before your baggage arrives.
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