There's nothing like a pandemic to spur a travel insurance boom. Policies meant to cover overseas medical care, trip interruption, and unforeseen snafus were a hot commodity in 2020 — and that demand is set to continue this year.

Purchases of cancel-for-any-reason (CFAR) policies, which are exactly what they sound like, were up more than 500 percent in 2020, says insurance-comparison site Squaremouth.

"Since June 2020, a whopping 90 percent of all trips we booked had travel insurance attached," says Jack Ezon, the founder of Embark Beyond and a member of T+L's Travel Advisory Board. That's compared to 58 percent in 2019.

Yet the world of travel insurance has never been more complicated, with new products popping up to specifically address travelers' anxieties about COVID-19.

"Travel insurance isn't a magical force field that protects every aspect of your trip," says Sara Rathner, an expert at NerdWallet. "Many insurance providers have added specific language about COVID-19. Always, always, always read the fine print."

It's also critical to know what you're insuring against. If you're worried about the investment you've made — that $20,000 cruise you've paid for in full before departure — then trip interruption is the key feature to look for. Those policies kick in if you're unable to travel as planned because of an unanticipated event like an accident at home and even, in some cases, if you contract COVID-19. Standard trip-cancellation coverage doesn't protect against the fear of traveling during the pandemic, warns Meghan Walch, travel insurance product manager for InsureMyTrip. "But if you look under the hood, most policies will have some benefits that travelers can utilize for COVID-related scenarios, such as quarantine ordered by a physician right before a trip or losing your job through no fault of your own."

Another option for travelers worried about illness is medical-evacuation coverage — particularly for those enrolled in Medicare, which rarely covers treatment outside the U.S. "Most people's primary concern these days is COVID-19," says Michael Hallman, CEO of Medjet, which provides security and medical evacuation services. "We saw an uptick in sales as destinations began to open their borders."

But if you're insuring against a more general fear of the unknown, you'll likely have to pay for the privilege. "More people are splurging on CFAR policies," Walch says. These plans can cost significantly more than traditional trip-interruption coverage, Rathner says, "but they give you the most flexibility."

Whichever type of insurance you choose, it's important to know what your specific plan says — and what it doesn't. "One of the biggest mistakes consumers make is not reading their policy," says Daniel Durazo, director of marketing and communications at Allianz Partners, a travel insurance and assistance company. "Most products include a 'free look' period, during which a customer can review their policy to see if it meets their needs." Taking advantage of that might be the smartest move of all.

A version of this story first appeared in the March 2021 issue of Travel + Leisure under the headline Understanding Travel Insurance in the Covid-19 Era.

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