Travel Insurance: Is It Worth It?

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A woman in a protective medical mask on her face sits at the airport waiting for a flight.

Travel insurance can be one of the best investments you’ll ever make — or a surefire waste of money. It all depends on your trip and how you might need to use your insurance.

But how can you know whether it’s right for you and your travel plans? Let’s take a closer look.

Understanding travel insurance and why you might need it.

What Does Travel Insurance Cover?

Travel insurance should cover your costs if something unexpected happens that prevents you from going on or completing your trip. Depending on the details of your plan, the benefits may differ. Many include trip cancelation insurance, which refunds your costs if an illness, injury, family emergency, or other issue forces you to skip your travel plans.

If your departure or return is delayed, some plans will also cover costs like hotels. You might even get meals or transportation. 

Once your trip begins, many travel insurance plans pay for medical costs that your regular health insurance doesn’t. They can also cover medical evacuation if you or a loved one needs it. In addition, if you lose your bags or an airline holds them up, some travel insurance includes benefits to help you buy new clothes, toiletries, and other items. 

Packing yellow vintage suitcase with summer vacation travel items.

What Is Not Covered by Travel Insurance?

In many cases, you won’t be able to take advantage of your travel insurance if you simply decide you don’t want to go on your trip. You can also generally assume situations not explicitly listed in your insurance documents aren’t covered.

You should also keep an eye on the fine print. Some travel insurance plans will refuse to cover you if you’re taking part in risky activities like skydiving or scuba diving.

Traveler’s Tip: Heading southeast on your next vacation? Here’s what NOT to do if you encounter an alligator.

Two skydivers have opened their parachutes and are floating back down the the mountains in Italy

When Is Travel Insurance Worth the Cost?

Now that you know the essential parts of what travel insurance does and doesn’t do, it’s time to consider when you might want it. Let’s dive in.

Your Credit Card Does Not Offer Protection

Before purchasing your trip, check to see if any of your credit cards offer insurance on travel. This little-known perk can save you significant amounts of money over the long term.

However, you must understand exactly what’s covered and any limits on that coverage. Don’t get caught off guard by assuming what your credit card covers.

You’re Traveling Somewhere With Dangerous Weather

Unfortunately, the weather is one trip factor entirely beyond your control. For example, if you’re taking a winter trip to or from a place with severe snowstorms or blizzards or traveling to a hurricane-prone place, you may get stranded. Rebooking or canceling can be extremely expensive when it’s even available. Travel insurance can be a lifesaver for a relatively small fee.

Two people walk back to a small charter plane that has landed in a snow covered landscape to travel back to the mainland.

You Can’t Cancel the Trip Without Penalty

More and more often these days, airlines, hotels, and other travel companies are unwilling to make things easy for those who need to cancel their trips unexpectedly. They may charge you a cancellation fee, seek to keep your money and compensate you with credits, or simply tell you you’re out of luck. This is another case where travel insurance can be the difference between a frustrating hit and stress-free rebooking.

You Need to Protect Your Health

Few things are more important than staying healthy. Health issues or concerns can seriously derail your travel plans. No one wants to choose between losing money and risking their health. Travel insurance can be very useful whether you run into health issues before leaving home or need to cancel due to health concerns. 

How Much Does Travel Insurance Cost?

This depends largely on the cost of your trip. As you might expect, more expensive trips will cost more to insure. The insurance company will be on the hook for a bigger loss if you need to use the insurance.

Generally, you should expect to pay anywhere between 4% and 12% of your total trip cost as insurance. This means insuring a $1,000 trip will cost you from $40 to $120. The exact number will depend on the nature of the coverage you’re purchasing. More full-featured plans come in at the high end of the range.

A young woman wearing white sweatshirt talking on the phone and using her table to book travel plans.

Is Buying Travel Insurance Worth It?

As with most financial and travel decisions, whether or not travel insurance is worth the money largely depends on the specifics of your situation. If your credit card covers you, then you may wish to skip it. The same is true if you’re confident in your health and the weather. 

But for many travelers, those are simply risks they can’t afford to take or coverage they may not already have. In these cases, it may be worth purchasing travel insurance. This is especially true for longer, more expensive, or more or more meaningful trips that simply can’t go wrong. You’ll have to consider your own risk tolerance and financial situation when making your decision.

Travel Insurance Has Pros and Cons

Travel insurance can seem unusual or complicated, but it can be a lifesaver for the right travelers. If you’re planning an expensive trip or face other risks, the relatively modest cost can be worth it.

But it’s important to know the details of the policy and whether it will apply to the situations you’re most concerned about. It can be the key to a worry-free trip or a waste of your hard-earned money.

Have you ever purchased travel insurance? What motivated you to get it?

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