What travel insurance covers and how to choose the best travel insurance

Travelling can be a fun experience, but it can also have its drawbacks. And that’s why travel insurance is so important. It makes sure you have the necessary coverage to protect yourself in case something goes wrong during your travels—whether it’s a lost wallet or luggage, an illness, or a serious accident.

With travel insurance, you can worry less about unexpected hospital bills and other costly health emergencies when you are away.

The options for travel insurance vary depending on your destination, cover, and interest requirements and there are many companies that offer travel insurance including your credit card provider, your banks or stand-alone travel insurance specialists.

I will explain below how they differ.

First of all, I have spent the last 20 years travelling the globe and visiting every country in the world. Yes, you can watch more about my achievement here on BBC or read this article by the ABC News.

I always purchase travel insurance, but in my younger years I bought the cheapest insurance policy. Looking back on it now, I realise that those insurance policies didn’t even cover me for the necessary things like medical, theft of property or cancelled flights. There were so many exclusions in the small print that I didn’t read or wasn’t made aware of. Luckily, nothing major happened to me back then.

You need to know what travel insurance covers to avoid making the same mistake as me.

Later on, I took more time to research and took out policies with travel insurance companies. And guess what? When I lost my luggage, had a flight cancelled or fell ill, I claimed it all on my travel insurance. And I always got all my money back so trust me, it is important to know what travel insurance covers before you buy it.

Here are the most important things to know about how your travel insurance works — and what it does or doesn’t cover.

What Travel Insurance Covers – From Credit Card to Comprehensive Travel Insurance:

1. What Travel Insurance Covers – The Credit Card Travel Insurance

Complimentary or ‘free’ credit card travel insurance is a widespread feature that many travellers rely on for cover during their travels. I hear this all the time: “Oh I have travel insurance with my credit card so I don’t need one“. 

But checking the fine print of your credit card travel insurance policy terms is essential – otherwise, you might find common exclusions leave you out of pocket or you might not be insured at all! 

Let me clarify. I also have included insurance with my credit card the American Express Explorer Card.

If you are an Australian resident I highly recommend applying for this card as it comes with amazing travel perks – lounge access & enough points for a free flight to Europe! And international travel insurance as well. 

But let’s talk about what travel insurance covers when it is provided with your credit card. You must always read the fine print – just having a credit card doesn’t always mean you are automatically covered! In my case I am only covered if I purchase my return flight with my credit card, otherwise, the policy is not valid

This is a common requirement, credit card travel insurance covers you only if you purchase your flights with itand if you have a confirmed return flight back home. One-way flight means that you are not insured

Also, the amount of what travel insurance covers when provided by your credit card is often less than the fully comprehensive insurance that you buy from travel insurance companies. 

So this can be the reason why you want to have a separate travel insurance policy in place when you travel.

Your credit card travel insurance covers medical (think serious injury, sickness and of course repatriation to return home for treatment) but it will have a limit. 

Comprehensive travel insurance usually offers medical expenses as unlimited.  

AMEX what travel insurance covers details
This is what travel insurance covers with my American Express Discoverer Credit Card

Another great example is called Travel Inconvenience Cover.

The most common claim would be delayed, cancelled, overbooked or missed onward scheduled flight.

With my credit card insurance, I can only claim up to $500 per flight (see photo below). Of course, this cost might be much higher, say my flight was $2000.

So if I take out a separate travel insurance policy that will most likely cover me for more and I can claim the full amount.

Travel inconvenience cover with AMEX what travel insurance covers
Travel inconvenience covered with AMEX – What travel insurance covers in case of a cancelled or delayed flight

This is what is the most important part when it comes to credit card travel insurance – you need to know the requirements to be covered (ie purchasing your flights with it) and you need to know what it covers.

You don’t need to contact your credit card insurer to find out, there is always an online booklet that outlines the conditions of your policy with all details.  

2. What Travel Insurance covers with Basic or Comprehensive policies

The second and most popular travel insurance coverage is Basic or Comprehensive Travel Insurance which is offered by various Travel Insurance Companies. 

Here is a quick outline of what travel insurance covers when it’s called Comprehensive:

  • Overseas medical and hospital expenses – an unlimited amount for the cost of unforeseen emergency medical and hospital treatment overseas.
  • Cancellation and amendment fees – the cost of pre-paid travel, accommodation, etc. in case you’re forced to call off or reschedule your trip due to an insured event (e.g. an unforeseen illness or injury). 
  • Luggage and personal effects – the cost of repairing, replacing or reimbursing you for your belongings if they are lost, stolen or damaged. Limits apply 
  • Additional expenses – extra travel, accommodation and meals expenses – over and above what you budgeted for – if your trip is disrupted or cut short due to an insured event.

When it comes to Basic policies, there are usually limits on how much you can claim in each category. So you might still be covered, but maybe not for the full amount. 

You can do online research and compare costs and read reviews of the different travel insurance companies, but I recommend buying travel insurance with Heymondo or World Nomads.

Both companies offer Basic and Comprehensive policies.

Here is why I recommend both of these companies:

Heymondo

Heymondo is a great option for all travellers as it offers a range of options for Single, Annual Multi-Trip and Long Stay Travel Insurance Policies valid across destinations. 

Heymondo offers 24/7 worldwide assistance, cover for non-refundable expenses and a 24 hour medical chat, including free emergency assistance calls and incident management in the palm of your hand.

heymondo_banner

World Nomads Travel Insurance

When it comes to travellers rather than tourists, World Nomads is well known in these circles. 

I used to use World Nomads for years as this travel insurance covers travellers after they left home. Imagine you plan a month in Asia and then end up extending your trip – World Nomads can cover you while you already travelling, something other travel insurance companies don’t. So if you are already travelling or are outside of your country of residency, World Nomads travel insurance covers you!

The other thing I love about World Nomads is the simplicity of their policies. You either choose Standard or the more comprehensive Explorer policy.

Read more below about what travel insurance covers by World Nomads:

You can get an accurate quote in seconds on the World Nomads website, simply enter the following answers to these questions:

  • Which countries or regions are you travelling to?
  • When are you travelling?
  • What’s your country of residence?
  • How many people are travelling?
  • How old is the traveller?

The website will then provide you with both plans for Standard and Explorer – simply choose the one that fits you more. You can also add additional items to your insurance later, for example, if you are travelling with an expensive camera, you can add it in.

My friend who is a professional photographer asked me what travel insurance covers expensive camera gear, and I recommend  World Nomads with added gear for extra coverage. 

When it comes to World Nomads Travel Insurance, I had to claim cancelled flights and stolen goods and found the process very easy and effective. My claim was approved and I got all my money back and extra travel expenses were also paid. And their claims department was great.  

2. What travel insurance covers digital nomads & ex-pats?

As mentioned before, I use my American Express Credit card travel insurance as well as comprehensive travel insurance. 

While I used World Nomads and Heymondo previously, I have now switched to SafetyWing Nomad Insurance. Why? Well since I now live as a nomad, this is the perfect option for me.

SafetyWing Travel insurance covers mostly digital nomads, ex-pats and long-term travellers and it’s essentially a global travel medical insurance that covers people from all over the world, while outside their home country – COVID-19 coverage included. 

Nomad Insurance provides coverage for unexpected illness or injury, including eligible expenses for hospital, doctor or prescription drugs. This means that if you get ill or injured, we will cover eligible medical expenses.

It provides this coverage for those travelling outside their home country. It does not cover routine checkups and preventative care. In addition, it provides emergency travel-related benefits such as evacuation from local unrest, unplanned overnight stay and lost checked luggage.

The key is that this travel insurance is simply paid every 28 days so every 4 weeks for up to a year unless you cancel it. 

As an example, the cost would be $42 for 28 days if you were aged 19-39. This comes with $250 deductible, $250,000 max limit.

 

5 Best Tips on Buying Travel Insurance:

1. Pick the correct type of policy

There are options for a single trip or an annual trip, you can take out a policy for more than just one person.

2. Choose your level of cover: Basic vs Comprehensive  

As mentioned your credit card travel insurance might cover you for basic travel insurance (make sure you are eligible). You might want to purchase comprehensive travel insurance for peace of mind.

3. Go with a reputable brand  

Don’t purchase some unknown cheap travel insurance that pops out on the side of your Facebook feed. Do your research or choose the travel insurance companies mentioned in this blog – I used them all personally and when it comes to World Nomads, Heymondo or SafetyWing, it’s almost synonymous with a great travel insurance company.

4. Be honest 

Don’t try to hide any pre-existing conditions as it might void your policy later on. Most travel insurance companies can take pre-existing conditions into account and still cover you. And make sure you provide the correct place of residency. 

5. Buy your travel insurance early

If your trip is cancelled or delayed due to unexpected circumstances, you’ll be covered for any pre-paid expenses. As soon as you’ve booked your holiday, travel insurance should be next on your list! This is something many do wrong, they simply book travel insurance just before they are due to leave. Buy travel insurance is as soon as you book your flights, tours or hotels.

Since travel insurance covers you for cancellation because of sickness or other incidental circumstances, it’s best to book it early.

What Travel Insurance Covers Paris trip
What travel insurance is best for you?

Frequently asked questions about travel insurance:

What are the medical evacuation limits per person?

Check the policy as some travel insurance have a cap of up to $250,000, while more comprehensive policies will have it as unlimited.

Which plan covers covid medical evacuation?

The Comprehensive travel insurance plans offered by Heymondo include different options when it comes to covid – please read the fine print before you purchase any travel insurance policy. 

What does travel insurance not cover?

It usually doesn’t cover a few things such as:

  • loss of luggage and personal effects left unattended
  • countries that your government advised you against travelling to, so-called “do not travel” countries (think North Korea, Afghanistan and in 2023 it might include Russia). 
  • errors in your own travel bookings
  • riding a motorcycle unlicensed or without a helmet
  • pre-existing conditions unless specified in the policy

Final thoughts on what travel insurance covers and how to buy the best one

I hope you found this article helpful. It seems many of my friends and family are always confused about what to get so I found myself comparing and explaining it a lot, being the “travel expert” as they always tell me.

I truly believe that if you can’t afford to pay travel insurance you can’t afford to travel.

With many options and good knowledge of what travel insurance covers, you can also travel with peace of mind and it doesn’t have to cost you a fortune.

So, safe travels and if you have any questions, please let me know in the comments. 

More Practical Travel Tips & Hacks

If your plan is to explore more of the world this year, consider getting an eSIM to stay connected. Learn more about the best eSIM for International Travel here.

Need a hand with what to pack for your trip? Check out our Ultimate Packing List for Travellers!

For the food lovers out there, you’ll love reading about these 10 Best Countries for Food Lovers. We love eating around the world and our 7 Tips for how to find the best food when travelling may be helpful to you.

Perhaps you’re travelling on a budget? These 10 Cheapest Countries in Europe or the 5 Cheapest Countries to Visit in South America may be just the information you need to start planning an epic trip. After visiting every country in the world, we’d say these 21 Cheapest Countries to Visit are worth considering too.

We’ve got a bunch of tips for how you can save money to travel the world, and even when you’re out there travelling, maybe these 20 Jobs that PAY YOU to Travel the World will help you travel longer. It worked for us, and we bet it can work for you too.

Finally, these Top 6 travel hacks to save money and our Best Travel Tips from Over 15 Years of Travel are some of the best travel advice we can share with you.

For more travel tips, travel gear and websites we use regularly, head to our Travel Resources Page.