Travel insurance and travel protection sounds like a good idea in a world of pandemic uncertainty. But is there a difference between them? And if so, do you care when you plan your next vacation?
Short answer: Yes, there is a difference between travel insurance and protection. And it matters.
“Travel protection is not travel insurance, but rather a very limited form of trip cancellation coverage that the travel provider self-insures,” says John Cook, president of QuoteWright, a provider of travel insurance quotes.
In addition, travel protection can refer to a fee paid to a travel agent or cruise line (remember those?) to waive a cancellation penalty. It could also refer to another form of protection that is not insurance but can be an important supplement to insurance
Breaking It Down
Travel insurance is a regulated product that covers losses you may face while traveling. These can include rental car damage, flight delays, lost luggage, medical expenses and trip cancellations. A typical policy costs between 5% and 7% of the price of your trip.
Travel protection is an unregulated product usually offered by a travel company or travel agent. Most common trip protection plans allow you to waive the cancellation fee if you can’t make the trip. Some also allow you to get credit for the full value of your trip. Costs can vary, but it’s usually cheaper than travel insurance.
That Seems Pretty Simple, Right? Poorly.
Many travelers – and even travel professionals – use “travel protection” and “travel insurance” interchangeably.
“They’re quite different,” says Lum Kamishi, editor of visa website Visaguide.World.
One reason: Some companies, especially cruise lines, bundle protection with a traditional travel insurance product. So in effect you will have a hybrid product – part travel insurance, part protection. This usually only becomes an issue if you book a cruise and receive an offer to “protect” your cruise with insurance. You need to read the fine print carefully to make sure you are buying insurance and not just a cancellation fee waiver.
Another definition of protection: There is more confusion ahead. Companies offering other forms of travel protection, such as medical evacuation or security services, are sometimes grouped under travel protection. This is a much different type of “protection” than a cancellation waiver.
For example, your travel professional might refer to a medical membership like Medjet or a service like Global Rescue that provides evacuation and safety services as “cover”. It is, of course – but not in the traditional sense.
Global Rescue CEO Dan Richards says these services can offer benefits that insurance doesn’t. For example, his company offers services that range from field rescue from the scene of your illness or injury, to transportation to the appropriate hospital, to ongoing internal case management and 24/7 medical or safety consulting services.
“Travel insurance is designed to protect your wallet,” he says. In a broader definition of “protection,” he explains, “Travel protection services can protect your health and life—even during a pandemic.”
My Brush with Trip Protection Scammers
I started covering travel insurance and protection because of a product that called itself “trip protection”. Decades ago, when I was just a cub reporter, a company started offering trip protection policies to cruise passengers and people buying expensive tours.
However, when customers applied and were rejected, they discovered that the protection was essentially unregulated insurance. As state regulators began to shut down these insurance fraudsters, the companies would dissolve and move to a new state. Then the deception would begin again.
As a consumer advocate specializing in travel cases, I have dealt with all the unfortunate travelers whose claims have been repeatedly denied. Ultimately, working closely with victims and law enforcement, we put these travel protection scammers out of business once and for all.
Today, travel protection is clearly labeled as “non-insurance” and regulators are quick to crack down on any company that claims otherwise. But that was not the case two decades ago. And travelers paid a heavy price.
That Seems Pretty Simple, Right? Poorly.
So which should you buy? It depends. Mayuri Kashyap, a travel blogger at ToSomePlaceNew who covers Europe, recently purchased a trip protection plan for a European cruise. The package cost $5,000 with an optional trip protection plan for $350. Kashyap could cancel anytime before his trip and receive a $5,000 credit.
“The reason we accepted the protection plan was because we needed a Schengen visa to travel to Europe and it was the first time we had applied for that kind of visa,” he explains. “Having a pre-paid travel plan – itinerary and accommodation – was part of the Schengen visa process. And if we were denied a visa, we would like to know that we can use the $5,000 credit to travel anywhere else in the world.”
Kashyap says travel insurance with trip cancellation would be overkill. She already buys separate health insurance, and seasoned travelers like her also rely on their credit cards to cover trip interruptions or lost luggage.
When Travel Insurance Makes Sense
If you’re looking for full coverage for issues like medical transportation, lost luggage, and rental cars, trip protection won’t work. You’ll either need to find coverage through your credit card, health insurance or car insurance – or buy actual travel insurance.
“Travel insurance covers medical events such as accidental injuries, unexpected illnesses, repatriation and evacuation,” says Kamishi of Visaguide.World. “Travel insurance could also be seen as more inclusive than travel protection. It may also include things covered by travel protection, but the reverse would not be true.’
QuoteWright’s Cook says he advises his customers to avoid travel protection.
“In today’s environment, it would be a mistake for a traveler to buy a travel protection plan,” he says. “The plans are not underwritten by the insurance company, so passengers are not covered by the legal requirements and protections. In addition, travel protection plans do not provide protection in the event that the travel provider becomes insolvent.’
Travel Protection Advice
Cook is right. Under normal circumstances, travel protection may be an option. But these are not normal times. With several cruise lines teetering on the brink of bankruptcy, you can easily buy a protection plan only to have the company fail. And don’t confuse this kind of protection with a medical membership plan, which is a good idea to consider anytime—and especially now.
Amy Danise is the managing editor for the insurance section at Forbes Advisor, which encompasses auto, home, renters, life, pet, travel, health and small business insurance. She is a highly experienced editor, writer and team leader with an extensive background in the insurance sector. With a career spanning more than three decades, she has focused her work on consumer-oriented publications.
