From winter storms, crowded airports and lost luggage, holiday travel can go awry for a number of reasons.
This year, travelers are paying more for their holiday getaways. The average cost of a holiday trip clocks in at $8,072 – about 19% more than in 2024, according to InsureMyTrip.
One way travelers can safeguard themselves from financial loss when their trips don’t go as planned is by having travel insurance.  
It’s exactly what it sounds like: insurance for the financial investment you’re putting into your trip, from the costs of your flight to your hotel stay.
“As we monitor another record-breaking holiday travel season, the combination of soaring trip costs and unpredictable winter weather makes insurance more essential than ever,” said Suzanne Morrow, CEO at InsureMyTrip. “We’re seeing travelers invest more in their vacations, and as an industry, we know that protecting that investment is key. A single storm or delay can unravel even the best plans – travel insurance helps travelers stay in control.”
Here’s what you need to know about travel insurance.  
Travel insurance is one of the best ways to protect the money you put into a trip, especially during hectic travel times like the holidays. It acts as a safety net for unforeseen costs and disruptions like flight cancellations, unexpected hotel stays or replacing lost luggage.
“With decades of data behind us, we know that the holidays consistently deliver the highest volume of delays and disruptions,” said Morrow. “Pair that with this year’s sharp rise in trip costs, and the financial stakes are much higher.”
Your basic comprehensive travel insurance is broken down into two parts: pre- and post-departure. Pre-departure includes circumstances like weather disruptions (before a storm is named, so keep that in mind) or if you get sick before your trip starts and you need to cancel it. Post-departure spans whatever happens on the trip, such as your luggage being stolen and you need to buy toiletries and clothes at your destination, or you end up in the hospital.  
Travel insurance plans typically cost between 4% and 10% of your total trip cost, so coverage for a $1,000 vacation will go for around $100. Factors such as age, additional coverage, and your destination can also affect the price.
Travel insurance doesn’t cover everything that can happen on your trip, so make sure you read the fine print. For example, a flight delay may not be covered until it crosses a certain time threshold.
Additionally, pre-existing medical conditions or plans for more adventurous activities like scuba diving or hiking in remote areas are often not included in standard coverage because of being considered a higher risk by insurance companies. Your best bet is to give the company a call to get a full understanding of the policy.
No, not unless you specifically pay for it. Buying travel insurance doesn’t guarantee a refund if you cancel simply because you no longer want to go. But if you do want that flexibility, there is an option for that, aptly named the “cancel for any reason” add-on. You can cancel your trip for any reason as close as two days before your departure and still get reimbursed 50% or 75% of your nonrefundable costs.  
Those traveling internationally could find travel insurance useful, given that your insurance provider from home may not cover medical expenses in a foreign country if you were to get sick or injured.
If you’re taking a cruise, travel insurance can definitely come in handy, so shop around and see what type of coverage is offered. Cruise lines typically offer their own insurance, but they’ll often have significant restrictions, so make sure to read the fine print.  
It’s also very likely that your health insurance won’t cover visits to the cruise infirmary or clinic at a port, and you’ll end up having to pay out-of-pocket.

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