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If you’re thinking about an international trip this fall or next spring, adding travel insurance is not optional — it’s necessary.

Before anyone ever heard of COVID-19, the question, “Do I need travel insurance?” called for a complicated answer. COVID has added another dimension of complications — new risks and new requirements.

A quick refresher course in travel insurance basics is useful:

• Most travel insurance is “named peril” insurance: If a contingency is not specifically included in the contract, it isn’t covered.
• Most travel insurance is limited to “unforeseen” contingencies. You can’t buy fire insurance when your house is already on fire, and you can’t buy travel medical insurance if you’re too sick to travel. Many insurance companies view current COVID problems, in general, as foreseeable and therefore not covered.
• Many travel insurance coverages are secondary, which means the travel insurance covers only what you can’t first recover as refunds or payments from other insurance sources.

Travel insurance is most useful against big-dollar risks. Many bundled policies cover small-dollar risks such as delay and delayed baggage costs, but those typically don’t amount to more than a typical traveler can absorb. If those coverages are included in a bundled policy, take them, but don’t pay extra for them.

Issues before you leave

Traditional trip-cancellation insurance covers your nonrefundable cancellation penalties if you have to abort a trip before you leave home because of the usual causes: sickness, accident and such. Most policies cover your getting COVID as with any other sickness.

The main new risk is possible COVID lockdowns or quarantines in your destination. Most policies do not cover cancellation if you’re just uneasy about the situation, nor do they cover any restrictions in effect at the time you buy your policy.

Issues after you arrive

Traditional trip-interruption insurance covers costs of early return if you get sick or suffer an accident while at your destination. And traditional medical insurance covers the associated medical costs, which typically includes getting COVID.

The new risk is getting caught in your destination by a new COVID restriction imposed after you arrive. Although many policies do not cover the cost of accommodations if you’re caught in a destination quarantine, some now do.

New government requirements

As a direct result of COVID, some countries require that you have, and can document, locally applicable medical and emergency evacuation coverage as a condition of entry, in some cases with minimum coverage up to $100,000.

A few of those — notably Aruba, the Bahamas, Jamaica and Sint Maarten — require that you buy their own policies, at a cost of up to $40 per person. In addition to insurance, many countries require pre-arrival COVID tests.

Insurance coverage you need

The best way to cover yourself is (1) determine exactly what coverage you need, then (2) call a travel insurance agency and negotiate a policy that specifically covers those exact requirements.

Over the years I’ve recommended Insure My Trip (insuremytrip.com), Quotewright (quotewright.com), and Squaremouth (squaremouth.com), which posts a useful list of special individual-country requirements. But a handful of other travel insurance companies are equally good.

Note: The only way to keep personal control of whether to travel is to buy a “cancel for any reason” policy.

Obtaining such insurance will be especially hard on older travelers, because most travel insurance pricing is age-rated. Medicare doesn’t cover international travel, and Medicare supplemental insurance often isn’t enough to satisfy requirements.

A recent study by AdvisorSmith (advisorsmith.com) found that, for a sample trip, travelers (age 60) pay 28% more than travelers age 30 to 50, and the excess increases to 88% at age 70, 200% at age 80, and 360% at age 90. And some policies that are not age-rated cut off entirely at age 70 or 80.

At a typical price of 4% to 5% of total trip cost, insurance is often a reasonable buy. With COVID, a more costly policy can be a necessity. And as always, the best way to minimize risk is to minimize up-front payments for travel.

© 2021 Ed Perkins.