Travel insurance.
In plain English
Travel insurance is short-term coverage for a specific trip. Depending on the plan, it can reimburse prepaid costs if you cancel for a covered reason, pay for emergency medical care and evacuation abroad where your health plan may not, and cover delays or lost luggage. Premiums usually run a few percent of the trip's price. The fine print matters: standard policies cancel only for listed reasons, while pricier cancel-for-any-reason add-ons reimburse a partial amount. It is most valuable for expensive, hard-to-refund, or international trips, and often unnecessary for cheap, refundable ones.
01Why it matters
For a big prepaid or international trip, one covered cancellation or medical emergency can dwarf the premium, so travel insurance is really about protecting a large, non-refundable outlay.
02The math, step by step
On a 5,000 dollar trip, a policy might cost 5 to 7 percent, about 250 to 350 dollars. If a covered emergency forces you to cancel, it can reimburse the prepaid cost you would otherwise lose entirely.
03What this is NOT
Standard travel insurance does NOT cover canceling for any reason. It reimburses only the specific reasons listed in the policy unless you buy a more expensive cancel-for-any-reason upgrade, which pays only part of the cost.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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