Planning a big trip for the holidays? How to make sense of travel insurance.

Those who had travel plans for 2020 and 2021 that they’d booked before the pandemic know only too well the disappointment of being unable to travel until, in some cases, this year, or even 2023.

Whether you buy travel insurance depends on how risk-averse you are, how much the trip costs, and how willing you are to pay for travel insurance.

If the traveler is spending $5,500 on average for a trip for two, they are buying travel insurance, says Megan Moncrief, chief marketing officer for SquareMouth.com, a travel insurance aggregator website. That total trip dollar amount has been “fairly consistent,” but went down just a bit since the pandemic.

“Travel insurance has grown in popularity and in demand,” Moncrief says. Travelers want to book deals “but they want added protection.”

Travel insurance typically costs 4% to 10% of the total cost of a trip, according to Moncrief, and insurance policies vary so it’s best to consider your needs carefully.

Read: When to buy travel insurance and when to skip it

Air travel has rebounded to a certain degree this year, according to data from the Transportation Security Administration check point travel figures comparing Aug. 16, 2019 with that same date for 2020, 2021, and 2022. Figures for 2022 are 1.99 million compared with 2.25 million travelers for 2019. For 2021, 1.61 million travelers came through TSA while in 2020, just 566​,000 were checked.

The cruise industry has been coming back but more slowly. More than 75% of oceangoing member capacity has resumed service, and almost 100% was projected to be in operation by August 2022, according to Cruise Lines International Association, an industry trade association. Some cruise lines are sailing at full capacity while others are gradually increasing capacity from the 50% capacity restrictions in place earlier in the pandemic.

Janet, who is in her mid-70s, booked a long-awaited cruise of Norway back in 2019, and she and her husband still haven’t taken the trip, in part, because they were reluctant to travel abroad this year.

Their original trip was planned for June 2020. That year, “the cruise lines canceled everything,” says Janet, so they rebooked to travel in 2021. The cruise company said the couple would receive all their money back or a voucher for 2021 with a credit for 125% of the trip. They could use the extra credit to upgrade their cabin or apply it to the cost of shore excursions. “We took the 125% and rebooked for 2021.”

Yet, in 2021 they were reluctant to travel. Since they had two years to use the vouchers, they decided to reschedule for 2022. Still hesitant to travel abroad for fear of missing out if they contracted COVID-19, they booked for 2023 at 125%.

They had purchased travel insurance from a third-party insurance company because their trip also included both pre-cruise and post-cruise travels. Insurance cost them $1,400 for the $20,000 trip, approximately 7% of the total cost, and the expense was worth it to them. “We just wanted to be safe,” says Janet.

Since they ended up postponing their trip, the insurance company gave them a full refund for the insurance. Meanwhile, they have the voucher to cruise in 2023, and will have to reassess whether to buy insurance for the entire trip.

Even though the couple still has two years to take their cruise, they are determined to go in 2023. “I want to go next year,” Janet says. Her reasoning: “Let’s just go. We still have our health.”

For their travel insurance from a separate insurance company, the couple decided on the “high-end” insurance, she says, because they wanted to protect the cost of their trip as well as obtain strong evacuation coverage. “We knew we wanted to book (that) in case we wanted to be flown home,” if they became ill.

The trend now​ ​is travelers are buying cancellation coverage, medical coverage, and travel delay insurance​, Moncrief says​. Cancellation coverage provides reimbursement for prepaid and nonrefundable trip payments if your trip is canceled because of illness, injury or death as well as bad weather, being required to work or if you lose your job. Trip delay coverage reimburses for the cost of meals and accommodations if your trip is delayed.

However, if you want more coverage that allows you to cancel for reasons such as you are fearful of contracting COVID-19, experts advise purchasing additional coverage that includes “cancel for any reason.

”If you are “scared, not comfortable (traveling), or a border is closed,” you will typically not be covered with travel insurance that covers you for trip cancellation, trip interruption, or medical coverage. “The anxiety aspects of COVID are not covered under standard cancellation” insurance, Moncrief says. “Cancel for any reason is much broader coverage.”

It typically increases your insurance cost by approximately 40%. Furthermore, “cancel for any reason” coverage typically reimburses up to 75% of the cost of your trip.

Travel insurance typically includes trip cancellation and post-departure benefits, says Syed Rizvi, chief of specialty insurance, Nationwide. ​ ​“The larger cost is the trip cancellation piece,” he says.

His estimate for the cost of travel insurance is 2% to 4% of the cost of the travel. The trip cancellation coverage includes reimbursement of prepaid, nonrefundable expenses if you cancel your trip for a covered reason. The post-departure benefits include medical, evacuation, lost baggage, and trip delay coverage. It’s possible to buy evacuation insurance separately but not all companies offer it as a separate purchase.

When you purchase travel insurance, most often you are buying what is known as secondary insurance or “excess insurance,” which means the insurance is secondary to any other insurance you already have, experts say.

That means the travel insurance company will check what other insurance you have first, insurance that will cover, for example, medical. However, if Medicare is your primary health insurance coverage, it does not cover you when traveling outside the U.S. However, if you have a Medicare gap or supplement plan, it may cover foreign country travel at 80%, for example, with a $500 deductible. When planning an overseas trip, it’s best to check what medical coverage you already have as you are deciding what type of travel insurance you need. Also, check your credit cards to see what kind of travel insurance coverage, if any, they include. Cards that include more extensive coverage typically have a higher annual fee.

If you buy primary emergency medical benefits​,​ it means the travel insurance company is the first to pay or reimburse for those benefits, rather than turning to other health coverage you may have, says Daniel Durazo, director of external communications at Allianz Partners USA.

With post-departure benefits, how much coverage is needed varies. “It’s really a personal decision,” says Erma Crock, senior director of product management, operations, and underwriting for Nationwide Specialty.

Consider how healthy you are, what kind of trip you are taking as far as activities and how strenuous they are, if you are on Medicare, and whether you are traveling only in the U.S. or internationally as well as on a cruise that includes U.S. and international ports. “It depends on where you are going and what kind of trip you’re taking,” Crock says. “Most (travel insurance) policies take into consideration what the average person needs,” she says.

For example, most have $1 million in evacuation coverage and $250,000 to $500,000 in medical benefits, she says. Check the fine print to see what any policy you are considering includes. Some evacuation coverage can be lower​,​ so decide if you want more coverage before you buy.

If you want to be sure you are covered for any pre-existing conditions that might arise before your trip, buy travel insurance within 10​ to ​14 days of paying your deposit, Crock says, or purchase it at the time you make your deposit to be sure you will be covered. ​

How will you know if your deposit/down payment will be refundable or not? “Before you put down a vacation deposit, make sure to pay attention to or ask what the terms and conditions say about canceling and getting your money back,” says Allianz Partners USA​’s​ Durazo. “Since the start of the pandemic, a lot of travel companies have improved transparency about nonrefundable fees, especially for online bookings, making sure the booking terms are in a strategic place that customers won’t miss during the checkout process.”

If you see a good deal for travel in December, January or February, a deposit can get you a price that might not be available at a later time.

If you’re concerned you might change your mind, the deposit may be fully refundable until a certain date in the fall, after which penalties for canceling will begin. Instead of booking online, speak to someone by phone, whether it be a travel company representative or an independent travel adviser who can explain your options. Another way to protect a deposit is to purchase a refundable trip that will cost you a little bit more but keep your deposit fully refundable until a specified date. Not everyone buys travel insurance but those who do like the security of it.

“When something happens, you wish you had it,” says SquareMouth.com’s Moncrief.