Everything you need to know about travel insurance

Let’s face it, travel insurance is a mixed bag of fine print and confusing exemptions.

We usually find that companies want to insure you for everything that’s never going to happen to you... and nothing that’s likely to happen to you (or when it happens, it conveniently falls under their deductible).

At the same time, if something catastrophic happens to you (like a car accident), you want to be covered. This is why we always recommend it.

Policies typically fall into three categories:

1. CFAR policies (which stands for Cancel For Any Reason) are the best if you think something might come up BEFORE the trip that will cause you to cancel — death in the family, existing health concerns or maybe if the trip is extremely physical and you want the option of cancelling if you get hurt between now and then.

These policies might also be worthwhile to consider when traveling to unstable countries if you’re likely to bow out due to fear -- this includes politically-volatile countries but also natural disaster countries (volcanoes, earthquakes, etc).

Some notes on CFAR policies:

• They usually only reimburse 50-75% of the full amount you paid.

• They usually must be purchased within 10-21 days of purchasing the trip.

• Some require that you cancel at least 48 hours before the trip date.

• These policies tend to cost a lot more than other policies.

• Sometimes there are coverage limits (maybe they only reimburse up to $10,000)

• Sometimes they don’t let you cancel if the cancellation is due to a travel warning or government-imposed restriction (which sometimes happens when another country so much as sneezes).

• Always check the fine print.

Outside of CFAR policies, here are some other policy types we like…

2. Annual plans with companies like Allianz are nice when you’re making multiple trips in a single year. They often don’t have CFAR policies included (or, they only include up to $2,000 reimbursement.) But you can sometimes call and add it for an extra fee.

This is what we recommend if you’re not likely to cancel a trip but you want to be covered for accidents. It’s the best-value option for covering all your travel in a 12-month period and they often don’t have age requirements (though check your policy for specifics).

Most policies have a “household” option, too, if you’d like to insure more than one person living in the same house on the same plan (like if you travel with a spouse or kids). They cover you — and everyone in your house — on any trip you take that is more than 100 miles away from your home so long as you’ve been in that place for at least 24 hours.

We’ll include a list of key points to consider when booking one of these policies below.

3. Medical evacuation policies are the best if you’re traveling to a remote or rural area... you’re signing up for an adventure tour that may require unique extraction and a higher chance of injury... you have a pre-existing medical condition that may require faster access to medical care... it’s simply your preference to have faster/better access to medical care... or you’re traveling in a country with limited medical facilities.

Our customers praise MedJet (though no one has actually reported needing medical evacuation).

MedJet typically operates on a subscription plan and works like a flying ambulance anywhere in the world so long as you’re more than 150 miles from your home.

No matter where you are, outside this 150 mile radius, they’ll go and get you, and transfer you to the hospital of your choice even if that hospital is all the way back home in Wyoming and you’re in Mongolia. And even if you’re injured by a natural disaster where thousands of others are injured and normal aircraft can’t get in and out. MedJet finds a way.

Do your own research and talk to a specialist there but from our research, there seem to be no coverage limits and no exclusions with MedJet. Just know that they don’t cover things like lost bags, trip delays and trip cancellations. That’s a different kind of insurance.

MedJet is evacuation only. The rest of your medical expenses are on you.

Key points to consider with all travel insurance:

• Do they offer 24-7 emergency assist? You definitely want this in an annual plan. It means they’ll assist you in decision making (choosing a hospital and a plan of action) and manage the go-between between your regular medical insurance and their policy. Your credit card may offer this, too, so long as you booked the entire trip using their card.

• Do they offer trip cancellation if you decide not to go on a trip? And if so, what exclusions/restrictions/deductibles apply? Some policies may only reimburse you up to $2,000. And if it’s a household plan, it might be $2,000 per household and not per person. This barely makes a dent in what you’re likely to spend on travel these days so also check your credit card. If you put the entire trip on your card, you may have up to $10,000 trip cancellation. But again, the fine print is key. Some cards only allow you to cancel if you’ve been injured, ill, or you have jury duty. They do not cover your cancellation if it’s for a death in the family, political unrest, terrorism or natural disasters. So if there’s even a hint that you may need to cancel your tour for these reasons or others, a CFAR policy (while expensive) may be your best bet.

• Do they offer medical coverage? And if so, what exclusions/restrictions/deductibles apply? Some plans offer only $20,000 or $50,000 on top of what your regular insurance pays. Most put the bulk of their coverage on your medical transportation (which of course, is often the cheapest part of your accident.) Medical coverage is for when the thing that is never going to happen to you, actually happens to you. It’s for bigger emergencies, not bumps and bruises. Credit cards often don’t include medical coverage. They may provide you with a concierge to help you get medical evacuation or access to medical care. But they don’t cover any of the costs for these services.

• Lost bags, flight delays, missed connections — this kind of insurance often comes from your credit card or it’s sold separately through your airline. It often includes up to $500 for trip delays of more than six hours, and up to $75,000 for rental car damage. Baggage insurance covers your bags if they are completely lost — up to $2,000 for checked bags and $3,000 for carry-on luggage​​. But if your bags are eventually returned to you, then it barely covers anything and is often a waste of time. We find very little value in these policies (aside from the rental car damage — which is only covered if you use the credit card to pay for the rental and you’re the driver).

• Ask yourself: What is most likely to happen to you? Medical coverage is like wearing a seat belt. If it were possible to only wear a seat belt on the days you know you’re going to get in an accident, then that would be the most comfortable choice. But since we never know when the unexpected will unexpectedly happen, some sort of medical coverage when we travel is a good idea. After this, it’s best to consider where you’re going and what your current health status is. CFAR policies, if you think you may need to cancel and you’d be devastated by the loss of your money on a trip, are great if you can afford them. Just read the fine print and be sure you’re not paying $500 to be reimbursed only $2,000. Or that you’re not paying for something you get for free on your regular credit card. Also think about your possible reasons for canceling and be sure your credit card doesn’t restrict those reasons and deny your claim when you were counting on them to cover you.

• If you’re traveling with health conditions or to rural areas far from medical care, you may consider an annual plan and supplement with a MedJet subscription. Add CFAR if you think you may need to cancel before the trip and you’d be devastated by the loss. Review your credit card privileges and measure them against the details above to see what you already have.