Travel Insurance vs Travel Protection: Understanding the Differences

• What is travel insurance?
• What is travel protection?
• Travel insurance vs. Travel protection
• How to purchase
• Travel protection conclusion and recommendations
• Travel insurance vs. travel protection FAQs

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• Travel protection covers trip cancellations, while travel insurance covers cancellations and medical costs.
• Travel insurance is usually more expensive than travel protection, as it provides more coverage.
• Travel insurance typically costs 4-8% of your total trip costs, more with CFAR protection.
• Compare travel insurance coverage options and rates with SquareMouth. 

In high school geometry class, you likely learned all squares are rectangles, but not all rectangles are squares. The same can be said for the perceived connection between travel insurance and travel protection.

The two similar-sounding terms describe entirely different products if you're researching how to protect your trip. While all travel protection plans are considered travel insurance, not all travel insurance provides travel protection.

Suffice it to say the confusion surrounding this topic, even among savvy travelers, is all too common.

"Travel protection and travel insurance are sometimes used interchangeably, but these two products are quite different and work best when they complement one another," says Joe Cronin, president of International Citizens Insurance, who cuts to the root of the problem. Understanding the difference between the two products is essential to ensure you have the right coverage for your next trip

What is travel insurance?

Coverage and Benefits

Travel insurance is a regulated product purchased by the consumer from a third party and underwritten by a reputable insurance company. Depending on the policy purchased, the best travel insurance policies can help cover losses associated with travel delays, lost luggage, medical expenses, or trip cancellations. In addition, many travel insurance plans have added specialty coverage from sports equipment to pets and roadside service. 

You can buy travel insurance exclusively for trip cancellations, flights, or other individual service. Or you can expand your coverage by purchasing a cancel for any reason (CFAR) policy.

Limitations and exclusions

According to Generali Travel Insurance, most insurance companies enforce the following limitations and exclusions: 

• Reasonably foreseeable events (i.e., known storms, epidemics, acts of war)
• Travel restrictions by government authorities
• Pre-existing conditions (unless a waiver applies)
• High-risk activities

What is travel protection?

Coverage Scope

Travel protection (also called trip protection) is an unregulated product purchased directly from the provider (from travel agencies and credit card issuers to airlines and cruise ship companies). This option offers limited trip cancellation coverage in the form of fees waived and credit issued in the case of changes to the itinerary and cancellation, respectively. 

Buyers cannot make travel protection more comprehensive, which means limited, less customizable options. This could be sufficient if you're insuring a short-term, domestic trip. But more extensive trips require more extensive coverage, which travel insurance may be better suited for.

Typical Inclusions

Your coverage options vary by insurance provider, but most will offer trip cancellation and trip interruption. These coverages insurers nonrefundable, prepaid expenses, and additional expenses incurred due to a cancellation or interruption.

Comparing travel insurance and travel protection

Differences in coverage

Cronin is critical of travel protection, saying it is not "a suitable policy in place of insurance, rather a good add-on if the price is right." He underscores while trip protection policies can be pretty generous, services remain unregulated and rife with exclusions.

Nicholas Imtias, an avid world traveler, learned this the hard way after opting for budget-friendly travel protection for a canceled overseas trip. Unfortunately, he could not utilize the waiver he received for a flight from Sri Lanka to the Maldives when the unregulated protection proved nothing but an empty promise.

Additionally, most non-insurance providers offer medical-related coverage. This could be crucial coverage if you're traveling abroad, especially if your health insurance isn't effective at your destination. 

Cost Considerations

As such, when compared side-by-side, the cost of travel protection will invariably be less than the cost of travel insurance, making it an attractive option for many who still need to do their homework.

Trip protection may pop up when booking your flight, whether through a deal site like Expedia or the main airline website. In most cases, premiums are low, totaling as little as $25-$30 for a short flight. But, as mentioned before, it only covers the flight.

The cost of travel insurance, on the other hand, equates to a percentage of the trip's total cost. Typically, premiums equate to an average of 4-8% of trip costs. Of course, a good travel insurance plan can't protect you from the inconvenience and sheer expense of an emergency while traveling abroad (which, depending upon the specifics, could be thousands of dollars or more) or ahead of time. But it can help to make you whole after the fact.

This could mean giving you a claim settlement to cover toiletries and other necessities in the immediate aftermath of a lost bag. It could also mean reimbursing you for a portion of nonrefundable trip costs if you have to cancel your trip. For travelers researching "how to protect your trip," travel insurance covers what we forget about until we need it.

The exact costs for travel insurance vary based on the trip and the coverage you want. For example, if you want cancel for any reason (CFAR) coverage, you should expect a hefty increase in your premiums. But for people canceling trips for excluded reasons with a regular travel insurance plan, CFAR coverage would be well worth it. The general rule is simple: the more protection you want, the more you'll have to pay.

Choosing the right option for your trip

Assessing your travel needs

Many people have a simple question: How much should I spend on travel insurance? The answer is it depends. So, before making any decisions and signing on the dotted line, consider your travel needs and budget.

"Travel insurance is designed to protect you and your trip from unexpected costs and losses …[and] depending on the plan you choose, the coverage can be very comprehensive," Pamela Bardo, vice president of Customer Service & Delivery at FlightHub Group, says.

"Rather than providing broad coverage, travel protection typically protects the customer's purchase in case they need to cancel due to unforeseen circumstances such as illness," Bardo explains. She emphasizes that travel protection does not typically cover indirect costs, such as the high costs of an emergency evacuation.

Travelers should look at the specifics of their travel plans and buy the appropriate plan. For example, suppose you're traveling from California to New York. In that case, you should get protection for your flight, and you might want to consider cancel for any reason coverage, depending on many factors. However, getting medical travel insurance wouldn't make sense when your regular health insurance travels with you.

On the other hand, if you're traveling to Thailand, you'll want to protect the most expensive part of your trip (flight). You'll also want to get a robust medical plan in case something goes wrong in a country where you do not have other health insurance.

Factors to consider

Before choosing between travel insurance and protection, consider the following factors: 

• Destination: If you're traveling internationallyor to a high-risk area, consider purchasing a policy. Travel protection may be enough if you're taking a domestic trip to see family members. 
• Trip cost: A costlier and longer trip may require higher coverage limits, which travel insurance tends to provide. Travel protection often has limits over what and how much it'll cover. 
• Activities: High-risk activities (i.e., sports, outdoor activities, etc.) increase the risk of injury. Travel protections likely won't cover high-risk events, but travel insurance gives you the option to include a sports and adventures add-on. 

Purchasing tips and best practices

How to purchase

You can buy travel insurance through an insurance provider, comparison site, broker, or travel agency. You can purchase protection through the service provider. For example, hotels, airlines, and large events may protect your purchase if you cancel. But you may find that not all services or events provide this benefit.  

Opting into protection or buying insurance shortly after you make your first trip deposit ensures that all future cancellations are covered. If you choose not to purchase your policy immediately, you must do so within a certain amount of time to qualify for pre-existing condition coverage  — usually 14 days. 

Reading and understanding policy terms

Travel insurance and protection features can overlap, but both come with several exclusions. It's important to know what coverages you require. It's also important to read through your insurance policy or travel protection's terms and conditions to determine which one is right for you. 

Travel protection conclusion and recommendations

Making an Informed Decision

Travel insurance and travel protection are valuable tools designed to help keep travelers safe and protected on their journeys. Both provide peace of mind while en route to destinations around the globe. But it's essential to consider factors unique to your itineraries, such as the length and cost of your trip, potential personal risks or concerns, and any existing insurance coverage. All these things allow travelers to make the right decision for their travel plans.

Considering travel insurance?

Business Insider has reviewed the best affordable travel insurance companies to help you find a policy for your budget.

Travel insurance vs. travel protection FAQs

Whether travel protection is enough for international travel depends on your situation. Travel insurance is generally recommended for more extensive, international trips due to its comprehensive coverage. It includes medical emergencies which travel protection plans don't typically cover.

Yes, especially if the travel protection is free or more cost-effective than specific coverage from travel insurance policies. Before purchasing travel insurance, be sure you don't already have a travel protection benefit.

No, travel protection does not cover medical emergencies. Trip cancellation and interruption are more common benefits.

You should prioritize travel protection if you're taking a domestic trip, as your primary health insurance provider should adequately cover you when you're in the country, reducing your need for travel medical coverage.

Travel insurance policies cover pre-existing conditions if purchased within a certain timeframe. while travel protection plans typically don't cover medical emergencies and pre-existing conditions.

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Reference

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