'Does travel insurance cover war?' Interest in coverage spikes as Iran conflict, global issues rattle travelers.

By Charles Passy

Travel-insurance demand is surging. If you're thinking of purchasing a policy for an upcoming trip, then here's what to keep in mind.

There are many different types of travel insurance, including Cancel for Any Reason coverage, but they come at a cost.

These days, travelers are facing all sorts of situations that could unravel their plans, from the political upheaval in Venezuela and the civil unrest in Mexico to the escalating conflict in Iran. And that's to say nothing of the multiple blizzards that recently wreaked havoc in the U.S.

All of which likely has many people considering the need for travel insurance. Google searches for travel insurance - particularly "does travel insurance cover war?" - have been spiking since the U.S. and Israel started strikes against Iran a week ago. Companies that offer policies are also seeing a sizable uptick in demand.

World Nomads, one insurance provider, said it has seen an 89% increase in sales from U.S. travelers purchasing protection for trips to the Middle East, comparing figures from Feb. 28-March 2 this year with the same period in 2025. And it has seen a 49% year-over-year increase in U.S. travelers purchasing protection for trips to Mexico, based on sales for roughly the past week.

InsureMyTrip, a company that works with several insurance providers, reported similar data. In particular, it noted that sales for Cancel for Any Reason travel policies have become especially popular, with sales climbing as much as 30% in recent weeks for those plans.

"Whenever there's a major event, we see a spike," InsureMyTrip CEO Suzanne Morrrow told MarketWatch.

Related: Here's what airlines, hotels and Airbnb actually owe travelers stranded in Mexico

That's on top of the fact that demand for travel insurance has increased over the past few years in general. The U.S. Travel Insurance Association reported that U.S. travelers spent $5.56 billion on travel insurance in 2024, the most recent year for which sales figures are available. That represents a 46% increase from 2019.

"Year after year, the data suggests that travelers are prioritizing protection as an essential part of the travel-planning process," USTIA President Robert Gallagher said in a statement.

For those looking to purchase travel insurance, there's much to consider, from the different types of policies that are available, to the costs involved. Here are some basic things worth knowing, based on what experts shared with MarketWatch.

What are the options when you purchase travel insurance?

Think of travel insurance in two parts: There's trip-cancellation insurance, which, as the name implies, offers protection in case you need to nix a trip before the fact - say, for medical reasons. Then there's insurance that covers matters during the trip - for example, if you have a medical issue and need to see a doctor or go to the hospital (your medical insurance might not cover you outside the U.S.) or if your vacation gets interrupted in any way. And don't forget other issues, like lost or stolen luggage. You can purchase a plan that covers everything - essentially, a comprehensive plan. Or you can opt for different pieces of coverage, with trip-cancellation being a particularly popular one.

You can also add "Cancel for Any Reason" coverage to your policy for a cost, but there are eligibility requirements. Also, it's worth noting that the coverage doesn't typically reimburse you the full amount of what you've paid - rather, it may reimburse just 50% to 75% of your prepaid, nonrefundable cost.

How much does travel insurance cost?

Given all the variables outlined above, there's no standard or fixed price for the insurance. Plus, a lot will depend on what you're insuring - there's a big difference between insuring the cost of a single domestic plane ticket and the cost of an around-the-world bucket-list vacation. According to travel guru Rick Steves, costs for policies that cover cancellations and emergency healthcare can generally run 5%-10% of what you've paid for the trip.

Here's another variable: If you're considering multiple trips during the year, you can purchase annual travel insurance. Squaremouth, another company that works with multiple providers of travel insurance, said the average cost for an annual plan with comprehensive coverage runs $532. But it noted different factors that can affect price, including your age.

What does travel insurance cover in case of war?

Acts of war are generally not covered by insurance policies - meaning it can't be a reason for canceling a trip. And this can even include conflicts where war is not actually declared. That said, it may be less of an issue in some instances because travel providers often respond to the situation on their own.

In the case of the current situation in Iran and the Middle East, airlines are already canceling flights and allowing travelers to rebook, for example.

It should also be noted that the U.S. Department of Transportation's automatic-refund rule requires airlines to provide a full cash refund to passengers if their flight is canceled, without them having to explicitly request one. You can read more about that here.

If you've already booked a trip, is it too late to buy travel insurance?

Not necessarily - in some cases you can purchase certain types of insurance, such as medical coverage, right before you travel. But for "Cancel for Any Reason" coverage, you will typically need to purchase it within 21 days of paying for your trip. And insurance providers will not let you purchase insurance that covers, say, cancellation for a natural disaster if that disaster has already happened. "That's like buying car insurance after you hit the tree," said Morrow.

Should you consider insurance offered directly from a hotel, airline or cruise line?

It's certainly an option, but it may not be the best one. Keep in mind that your cancellation coverage may only reimburse you for that particular provider - so, if you booked a vacation that involves a flight and hotel stay, your insurance for the hotel won't necessarily cover your flight cost.

-Charles Passy

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03-07-26 1435ET