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Is Travel Insurance Worth It? Here’s What You Should Know Before Your Next Trip

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Jessica Merritt
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Jessica Merritt

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A long-time points and miles student, Jessica is the former Personal Finance Managing Editor at U.S. News and World Report and is passionate about helping consumers fund their travels for as little ca...
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Travel can be an exciting and enriching experience, but it’s not without risks. Unforeseen events such as medical emergencies abroad or trip cancellations can disrupt your plans and leave you with financial losses.

When things go wrong on your trip, travel insurance can help. Whether you need emergency assistance or reimbursement for delayed luggage, travel insurance coverage comes in clutch.

Is travel insurance worth it? Usually — though it’s not necessary for every trip. Although adding another expense to your travel budget may not be thrilling, investing in travel insurance is frequently a wise decision if you’re spending a lot or taking risks.

Let’s look at what travel insurance costs, what it covers, and when it’s essential so you can make the best choice for travel insurance.

What Is Travel Insurance?

Travel insurance offers coverage for unexpected events and risks while traveling, providing coverage that can give you financial protection and assistance when things go wrong. It can help you manage the financial impact if you experience a travel-related disruption or emergency.

Typically, standard travel insurance covers trip cancellation or interruption, emergency medical expenses, baggage, travel delays, emergency assistance, evacuation, and accidental death or dismemberment.

You can purchase travel insurance for a specific trip or as an annual policy that covers multiple trips. Travel insurance is available directly from insurance companies, travel agencies, airlines, and online travel booking platforms.

Why Travel Insurance Is Worth It

You probably don’t want to imagine that your trip will be anything less than perfect, but the reality is travel frequently goes awry — and it can cost you. 

Traveler waiting at the airport departure area for his delayed flight
If you face flight delays, travel insurance could make the difference between sleeping in a hotel or in an airport. Image Credit: Chalabala via Adobe Stock

You might need to buy clothes and toiletries after an airline loses your luggage, pay for a night in a hotel due to travel delays, or face medical bills if you’re injured far from home. Travel insurance can reimburse costs in all these situations, providing peace of mind and financial protection.

Consider these situations when travel insurance can reimburse unexpected travel expenses:

  • Emergency Evacuation: You may require emergency evacuation due to situations such as a medical emergency. Without proper coverage, these situations can be logistically and financially challenging.
  • Lost or Delayed Baggage: Baggage mishaps are common, and airlines may misplace your luggage, or you may face theft or damage. Without your belongings, you might need to purchase essential items.
  • Medical Emergency: Illness or injury is always troubling, especially when traveling in an unfamiliar environment. An accident abroad without travel insurance could be costly, and your regular health insurance might not provide coverage.
  • Travel Delays: Flight delays and cancellations are common travel frustrations, and you may face expenses such as meals, accommodations, and alternative transportation.
  • Trip Cancellation or Interruption: An unexpected event such as illness or a family emergency could force you to cancel or cut short your trip. Without travel insurance, you might lose out on your nonrefundable expenses.

In these situations, travel insurance can come to the rescue, offering reimbursement and sometimes emergency assistance when things go wrong on your trip.

For example, emergency medical transportation can cost about $20,000 on the low end. If you need a medevac, you could be looking at $200,000 or more, according to travel insurance company Allianz.

Bottom Line:

Travel insurance can help you relax on your trip, knowing you’re covered for major mishaps.

What Travel Insurance Costs

Generally, travel insurance costs 5% to 10% of your trip, depending on several factors. Getting quotes from multiple insurance carriers to compare costs and coverage is wise. These are some of the factors insurance companies will consider when pricing your travel insurance policy:

When You Need Travel Insurance

You should consider travel insurance for any trip of significant financial investment or risk, whether international or domestic. But there are some travel situations when travel insurance is particularly useful:

  • Adventurous or Risky Travel: If you plan to do adventure sports (such as scuba diving) or visit destinations with significant risks (such as natural disasters), a specialized travel insurance policy can support you with coverage and assistance.
  • Elderly Travelers: Health risks increase as we age, making senior travelers more susceptible to health issues while traveling.
  • International Travel: International trips are generally more costly than domestic, with longer durations or more logistics that could go wrong. And medical care abroad could be complicated.
  • Medical Issues: If you’re concerned about medical care, travel insurance could help ensure access to medical care and coverage while traveling.
  • Multiple Destinations: If you’re visiting multiple destinations or have connecting flights, you have more opportunities for travel to go off the rails.
  • Peak Season Travel: When many other people travel, you may face more flight delays, cancellations, or trip interruptions.
  • Significant Investment: A costly nonrefundable trip makes travel insurance essential so you can get reimbursed if an unexpected event forces you to cancel or interrupt your trip.
  • Unpredictable Weather: If you’re traveling during stormy seasons or in areas prone to natural disasters, you might face delays or cancellations caused by adverse weather conditions.

You might not want travel insurance for a domestic trip that’s relatively inexpensive and where your existing health plan would cover you at your destination. And trip cancellation or interruption coverage isn’t useful if all of your reservations are refundable — though you might still want it for medical and emergency coverage while on your trip.

But if you’re traveling to the Caribbean during hurricane season on a nonrefundable trip, for example, travel insurance is probably a wise choice.

How To Get Travel Insurance

You can get travel insurance by searching for a quote directly from a travel insurance company or on comparison sites such as Squaremouth or InsureMyTrip. You can also ask an insurance agent to guide you and find the best travel insurance policy for your needs.

Review the policy and documentation to ensure you understand all the terms and limitations once you’ve found a quote with the coverage and cost you’re good with. 

If everything looks good, you’ll pay the premium and get your policy. You should print a copy of your insurance policy or carry a digital copy on your mobile device to access policy information if you need to make a claim or get emergency assistance.

Credit Card Travel Insurance Limitations

You may have a credit card that offers travel insurance as a benefit. Credit cards with this benefit frequently offer protection for trip cancellation or interruption, rental car damage, and baggage loss or delay. Though rare, some offer emergency evacuation coverage.

Two Men Talking After Minor Car Accident
Car rental damage is frequently covered by credit cards with travel insurance. Image Credit: tommaso79 via Shutterstock

American Express credit cards typically offer travel accident, car rental loss and damage, and baggage insurance. You can also get roadside assistance and access to the Global Assist Hotline.

Chase credit cards often have travel insurance, too. For example, the Chase Sapphire Reserve® provides cardholders with an auto rental collision damage waiver, trip cancellation, trip interruption, trip delay, lost luggage, baggage delay, roadside assistance, emergency evacuation, emergency medical and dental, travel accident, and travel and emergency assistance coverage.

While credit card travel insurance is helpful, don’t expect it to offer the same extensive coverage you’d get with a separate travel insurance policy.

Consider these common limitations of credit card travel insurance:

  • There are coverage limits, such as a maximum limit for trip cancellation or lost baggage.
  • There are eligibility requirements, such as booking the trip with your credit card.
  • Preexisting medical conditions may be excluded.
  • Coverage duration may be limited.
  • Types of coverage may be limited, so you may get trip cancellation coverage but not emergency evacuation.
  • There’s little to no customization that allows you to add coverage options.
  • It’s typically secondary coverage that kicks in only after you’ve exhausted other insurance policies.

How Much Travel Insurance Do You Need?

How much travel insurance you should get depends on how much protection you need. Consider higher protection levels if you’re taking an especially expensive or risky trip, have health issues, or plan to bring costly items such as jewelry or sports equipment. Long trips may require a greater degree of coverage to account for the potential risks and expenses that can occur over an extended period.

Consider Annual Travel Insurance

Frequent travelers may benefit from annual travel insurance or multi-trip insurance. If you travel multiple times each year, annual travel insurance can be a cost-effective way to cover all of your trips rather than separate travel insurance policies for each trip.

Annual travel insurance can also be more convenient than buying travel insurance each time you plan a trip. You’re automatically covered for all of your trips within the specified coverage period as long as your trip meets the policy’s limits. 

Annual travel insurance policies typically offer comprehensive coverage, which includes trip cancellations, medical emergencies, travel delays, and baggage loss. You can generally add coverage for additional needs, such as adventure sports or Cancel for Any Reason coverage.

Assess your travel habits, anticipated number of trips, and planned destinations when considering annual travel insurance. If you take more than a couple of trips each year, it might make sense to get a multi-trip policy.

Adding Travel Protection to Your Booking

When you make a travel booking, you may notice you can add travel protection insurance. For example, Airbnb and Disney offer travel protection add-ons at checkout. Should you add it?

The travel protection offered at checkout is typically not issued by the operator, such as Airbnb or Disney, but by a third-party travel insurance company. These policies are typically comprehensive, like a separate travel insurance policy you could buy independently. Coverage often includes trip cancellation or interruption, baggage loss or delay, emergency medical and evacuation, accidents, and rental car coverage.

If you’re offered travel protection when booking, it makes sense to check out the details. It could be a good deal, as the operator may have preferred pricing with the travel insurance company. But you should still get travel insurance quotes independently to compare the costs and coverage.

How To Get the Best Value Travel Insurance

Before you purchase travel insurance, you should get quotes from multiple travel insurance companies. You can compare coverage and costs once you input your information, including trip cost, duration, age, and destination.

Before you purchase travel insurance, assess your needs and consider the activities and destination so you can get the right level of coverage. 

As you compare policies, consider pricing, benefit limits, and what’s covered. You should also look at deductibles, which can lower the premium cost but require you to pay out before the insurance company does. Make sure the deductible amount is manageable if you need to make a claim. And, ensure that coverage limits are enough to cover potential expenses and losses.

You may get better rates if you purchase your travel insurance policy directly from a provider, eliminating third-party fees or commissions. However, getting quotes from a third-party website or travel agency can be a good idea because you may benefit from discounts or promotions.

Finally, read reviews before you purchase your travel insurance policy. A travel insurance policy isn’t a good deal if it doesn’t offer helpful coverage. Find out what other customers think of the coverage and customer service and how their claims went. 

Final Thoughts

Travel insurance can be an investment in peace of mind. Whether you’re taking a costly trip or need medical coverage abroad, travel insurance benefits can far outweigh the cost. Before you take your next trip, consider your travel needs, destination risks, and the travel insurance coverage you can get from different providers.

Frequently Asked Questions

Does travel insurance actually pay out?

Travel insurance does pay out, provided you have a valid claim that meets your travel insurance policy’s coverage criteria. Understand your travel insurance policy’s terms and conditions including coverage limits, exclusions, and the required documents needed to make a claim.

How long before traveling should you get travel insurance?

You should get travel insurance when booking and paying for nonrefundable trip expenses. Most travel insurance companies require you to purchase your coverage within a certain period of making your first payment on a trip. And getting a policy when you book protects you from trip cancellation.

What is usually covered by travel insurance?

Travel insurance usually covers trip cancellation and interruption, emergency medical expenses, travel delays, baggage loss or delay, and emergency assistance services. Your specific coverage may vary depending on the provider and policy.

What is often not covered by travel insurance?

Travel insurance policies often exclude preexisting medical conditions, reckless or unlawful behavior, and high-risk activities.

Who needs travel insurance?

Travel insurance is recommended if you travel internationally, visit a high-risk destination, or have significant nonrefundable trip expenses.

Jessica Merritt's image

About Jessica Merritt

A long-time points and miles student, Jessica is the former Personal Finance Managing Editor at U.S. News and World Report and is passionate about helping consumers fund their travels for as little cash as possible.

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