After two canceled trips to New Orleans—once because of his mother’s death and the other because of a hurricane—AAA member Frank Amari and his husband, Don Rohlfing, of New Hope, Pennsylvania, decided it was time to start purchasing travel insurance. The couple vacations at least annually in Europe or South America, and they didn’t want to continue to put at risk the money they invest in those trips.

It was a wise decision. In just the past few years, Amari and Rohlfing have needed to cancel two big trips because of health issues, and both times travel insurance reimbursed their trip costs. “I highly recommend travel insurance if you’re over 40—for any age, actually,” Amari says.

Insurance—whether it’s home, auto or travel—is one of those things you hope you never have to use, but if you do need it, you’ll really be glad you have it. As with any type of insurance, though, the ins and outs of travel insurance can get confusing, so we tackle some common questions here.

AAA member Frank Amari and his husband, Don Rohlfing, in St. Barts
Photo Courtesy of Don Rohlfing

WHAT SHOULD YOU LOOK FOR IN A TRAVEL INSURANCE POLICY?
Comprehensive travel insurance policies typically cover two basic elements: the cost of the trip itself if you need to cancel for a covered reason, and the cost of any emergency medical care needed while you are on the trip, including emergency medical evacuation. There are other coverages as well, but these are the biggies.

The first element—insurance for trip cancellation—will reimburse travel costs you’ve already incurred for the trip if you need to cancel before the travel date. Say, for example, you or your travel partner fall ill before your trip, and you need to cancel your travel plans after the point when you were eligible for a refund. With no travel insurance, your airline, hotels or tour provider can reimburse you—or not—according to their terms and conditions, and in some cases, they might only offer credit for future travel. But with travel insurance, you will be reimbursed for all covered expenses.

That was the case for AAA member Cheryl Bliss of Aberdeen, New Jersey, who had planned a ski trip to St. Moritz, Switzerland, this past January. When her travel partner broke his foot and had to bow out, the resort refunded only a portion of Bliss’ prepayment; luckily, she had purchased travel insurance, which reimbursed the remaining amount. In order to be covered in the event that your travel partner can no longer go on the trip, it’s important that you and your companion book your travel together, points out Karine Cote, AAA senior travel advisor in Lexington, Kentucky.

The second element of travel insurance—emergency medical coverage—is vital, particularly if you are going to an isolated destination, to an area where the health care is not comparable to US standards or to the growing number of countries that require proof of health coverage while abroad. You’ll also want to ensure that you are covered for medical evacuation if necessary due to accident or illness. Those costs, if paid on your own, could range from $15,000 for transport from Mexico to the US to more than $220,000 for medical transportation home from Asia, Australia or the Middle East, according to Allianz Global Assistance, AAA’s preferred travel insurance partner.

Also, note that Medicare and Medicaid insurances only cover you in the US, so if that’s your health insurance, it’s imperative to buy insurance for medical coverage while abroad.

AAA members and sisters Cheryl and Heidi Bliss on a ski trip to Zermatt, Switzerland
Photo Courtesy Cheryl Bliss

CAN I GET ONE TYPE OF COVERAGE WITHOUT THE OTHER?
Yes, but it’s not typically recommended. When you purchase only medical coverage, you’re putting at risk all the money you’ve prepaid for your trip. “People make a significant investment in travel, whether it’s a trip abroad, a cruise or some kind of tour. Those types of trips can be expensive, and they need to be protected,” says Daniel Durazo, spokesman for Allianz. “You want to be able to hang onto that money and rebook your trip later when it’s convenient.”

HOW MUCH DOES TRAVEL INSURANCE COST?
As with home insurance and auto insurance, the cost of travel insurance depends on a number of factors, including the age of the traveler, the destination and the cost of the trip. Insurance for a $20,000 excursion, for example, will be pricier than for a $5,000 vacation. And the older you are, the more the insurance costs because you are at higher risk. The cost of insurance, though, is minimal when compared with the potential loss if you don’t have insurance.

Families traveling with children get a break on insurance costs with AAA’s Allianz insurance, developed specifically for members by Allianz. The product is called Trip Assist Family Care, and it covers kids ages 17 and under free when traveling with either a parent or grandparent.

WHEN SHOULD I PURCHASE TRAVEL INSURANCE?
If you want a comprehensive plan that offers trip cancellation coverage, it makes sense to purchase the insurance as soon as you book your travel, says Randy Osborne, travel product manager at AAA. If you later make add-ons and the trip cost increases, you can always acquire additional insurance coverage, he points out.

If you have any preexisting medical conditions, you’ll need to buy insurance within 14 days of making your first trip deposit and prior to making final payment for the trip in order for those conditions to be covered (other restrictions apply), notes Allianz’s Durazo. If you are purchasing medical-only coverage, it can be purchased up to a day before you leave, says Deborah Lilly, AAA senior travel agent in Manassas, Virginia.

WHAT ELSE DO I NEED TO CONSIDER WHEN SELECTING TRAVEL INSURANCE?
It’s important to look into the reputation of the insurance provider as well—and to read the fine print. “What’s true with the rest of the world is true with insurance: You get what you pay for,” Durazo says.

Make sure you read and understand the entire policy, including what sort of recompense the travel insurance company provides for canceled trips. Most people would prefer a cash refund, but some policies instead provide credit toward future travel, which must be used within a specified period.

Lilly notes that different travel insurance coverages (even from the same company) have different policies about who pays for medical bills upfront: the traveler or the insurance company. If you want the insurance company to cover emergency medical costs while you are traveling instead of reimbursing them later, be sure to select a policy that guarantees that.

Photo Courtesy Of Allianz Global Assistance

Also look into how responsive the travel insurance agency is. Allianz, for instance, has a 24/7 travel concierge service that you can call for help with a broad range of travelrelated issues, from finding out currency exchange rates or making dinner reservations to locating a doctor who speaks English or arranging emergency evacuation.

WHAT IS CANCEL-FOR-ANY-REASON COVERAGE?
Cancel-for-any-reason travel insurance or, as Allianz calls its product, Cancel at Any Time insurance allows you to cancel your trip for most any reason up to a certain date before departure and be reimbursed for the majority of your travel costs. In comparison, traditional travel insurances allow you to cancel the trip and be reimbursed for only for a narrow list of reasons. While Cancel at Any Time insurance offers you more flexibility in cancellation, it’s also more costly, says Cote. You should discuss your personal situation with your travel agent to decide which type of insurance makes sense for you.

HOW AND WHERE DO I PURCHASE TRAVEL INSURANCE?
Your travel agent is your best resource. He or she knows the details and cost of your trip and the availability of suitable medical facilities where you are going. Cote advises talking with your agent about any reasons you could foresee needing to cancel a planned trip so that your agent can select the best product for your circumstances.

“Selecting travel insurance is done on a case by case basis,” adds Lilly. “It depends on what that particular member’s needs are, making the insurance best fit for that particular person.”