What’s the difference between travel protection and travel insurance? (2024)

Key points

• Travel insurance bundles several types of coverages, including trip cancellation, trip delay, trip interruption, emergency medical and baggage loss and delay.
• Travel protection is a very limited form of trip cancellation coverage that is self-insured by the travel provider. For instance, an airline may give you credit if you need to cancel your flight.
• Travel insurance typically costs between 5% and 6% of the trip’s cost, and trip protection is generally cheaper.

Travel insurance and travel protection might seem similar, but they are two distinct products. Travel protection is a limited coverage offered by a travel provider. This coverage may refer to a fee you pay to waive cancellation penalties if you need to cancel your trip. Travel insurance, on the other hand, offers a more comprehensive coverage plan and is provided by insurance companies. It’s important to know the difference and consider your options when planning a trip.

What is travel protection?

Trip protection, offered by travel companies or agencies, is an unregulated product that mainly provides a waiver for cancellation fees or a credit for the full value of the trip. It is generally less expensive — and less comprehensive — than travel insurance.

What is travel insurance?

Travel insurance is a regulated insurance product that provides financial protection for travelers. It may cover damages to rental cars, flight disruptions, lost belongings, medical expenses and trip cancellations. Travel insurance costs an average of 5% and 6% of the total trip cost.

A comprehensive travel insurance policy typically includes the following types of insurance coverage:

• Trip cancellation insurance. Covers 100% of the cost of nonrefundable, prepaid trip cancellations due to unexpected events such as illness, natural disasters or other covered reasons.
• Trip interruption insurance. Reimburses you, up to your benefit limit, if you need to head home early due to unexpected events such as illness, natural disasters or other covered reasons.
• Travel delay coverage. Covers expenses like additional accommodation and meal costs incurred when a trip is delayed, such as if your connecting flight is canceled.
• Baggage loss coverage. Covers some of the loss or theft of luggage and personal belongings during the trip.
• Baggage delay coverage. Pays for the basic essentials needed until your delayed baggage arrives.
• Travel medical insurance. Pays for expenses like doctor’s visits, X-rays and hospitalization if you get sick or injured on your trip.
• Emergency medical evacuation. Covers the cost of emergency transportation to the nearest adequate medical facility if you become seriously ill or injured or develop a medical condition while on your trip.

Trip protection vs. travel insurance

Travel insurance and travel protection are often used interchangeably by travelers and even travel professionals, but they are different products. Travel insurance is a regulated product that covers a range of losses, such as medical expenses, lost luggage, car rental damage, trip cancellation and flight delays.

Meanwhile, trip protection is an unregulated product offered by travel companies or agencies that primarily focuses on waiving the cancellation fee or offering a credit when you can’t make a trip. It is usually cheaper than travel insurance, but includes less coverage.

Tip: It’s important to pay attention to the details of a travel insurance policy when booking a cruise, as cruise lines may bundle trip protection with traditional travel insurance and offer a hybrid product. To avoid confusion, it’s important to review the fine print to determine if you are buying insurance or just a waiver for cancellation fees.

How to avoid travel insurance scammers

Travel scammers could offer trip protection with the goal of denying a purchaser’s claims. Unlike insurance, trip protection is an unregulated product, so there aren’t third parties regulating fair payouts. The following steps can help you avoid scammers.

• Be cautious of products labeled as “trip protection” as they may be unregulated insurance.
• Always read the fine print before purchasing travel protection to understand what you are buying.
• Watch out for travel protection companies that dissolve and move to a new state when faced with regulatory action.

When you should consider a travel protection plan

Before choosing a travel protection plan, keep in mind that it is not recommended if you need coverage for things like travel medical insurance, emergency medical evacuation, lost luggage or car rental. You can meet these needs by purchasing a real travel insurance policy from an insurance company. You may also be able to get such coverage through your health insurance, auto insurance or credit card benefits.

Travel protection might make sense in specific scenarios. For instance, imagine you purchase a prepaid trip that hinges on whether you can secure a short-stay travel visa. If you buy a travel protection plan that refunds the trip if you don’t get your visa, you can use your credit to purchase a trip somewhere else in the world.

When you should consider travel insurance

If you are looking for coverage for issues that can happen both before and during your trip — such as accidental injuries, unexpected illnesses, travel delays and stolen belongings — travel insurance is likely the best option for you.

Weigh the pros and cons: Is travel insurance worth it?

What to look for when protecting your trip

Many experts recommend avoiding travel protection, because its coverage is very narrow. Travel insurance can typically cover cancellation needs and more, and is underwritten by a full-fledged insurance company, whereas travel protection is self-insured by a travel company.

Make sure you get the coverage you need: What travel insurance covers

Frequently asked questions (FAQs)