News Center > Consumer Advisory - What is Travel Insurance and Do You Need It?

June 27, 2013




Don’t neglect travel insurance when preparing for summer vacation. Do you need it? Are you covered in the event of an accident or illness?

Generally speaking, there are four types of travel insurance:

1.  Trip Cancellation/Interruption/Delay;

2.  Emergency Medical Assistance – Medical Expense and Medical Evacuation;

3.  Baggage Insurance/Personal Effects Coverage; and

4.  Rental Car Damage.

Trip cancellation insurance can help you recover some or all of the cost of your trip. Covered reasons for cancellation generally include sickness or death of you, a close relative (as defined in the policy) and, depending on the policy, a traveling companion; inclement weather; natural disasters; and bankruptcy of your travel provider or vendor. 

Emergency medical assistance may cover emergency medical and dental expenses that you have because of an injury or illness that occurs while you are traveling. Some policies also will reimburse the cost of expenses for medical transport to a nearby facility or for medical evacuation to a facility close to home when medical care is needed.

Baggage Insurance/Personal Effects Coverage reimburses you for the cost of items that may be lost, stolen or damaged while traveling. Generally, this coverage does NOT cover personal items that may be lost or damaged by an airline. There are usually coverage limitations.

Rental Car Damage coverage provides coverage to repair a rental vehicle if you have an accident that is determined to be your fault. Your personal auto policy may extend to the rental vehicle while you are away from home. However, if your personal auto policy is a liability-only policy – that is, you do not carry collision or comprehensive coverage – you may want to purchase this coverage through the rental car company.

Be sure to read carefully the specifics of the policy so you fully understand the terms and coverage before purchasing it.  For example, cancellation coverage usually does not cover non-refundable fees or deposits. Travel insurance can make sense if you are paying a lot for your trip or you anticipate the potential for something that might cause your trip to be canceled. 

Check your current policies before purchasing travel insurance to avoid paying for coverage you already have. Your homeowners or renters policy may provide some coverage for lost or stolen personal belongings while you are away from home. For example, your credit card company might provide collision coverage for rental cars or trip cancellation coverage.

Travel insurance may be obtained through your own insurance producer (agent), your travel agent or through a travel provider, such as an airline, railway, or online service. To determine whether the producer selling the coverage and the insurer issuing the policy are licensed, contact the Maryland Insurance Administration at 410-468-2000, toll-free at800-492-6116

To find out more about travel insurance, read the Maryland Insurance Administration's consumer alert.

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