Is Travel Insurance Worth It?
Travel insurance makes sense if you want to protect the amount of money you’ve laid out for your vacation. But no one can blame you if you’re hesitant to add another expense to your travel budget after paying for airfare, hotels, meals and activities. Still, if you can’t afford to lose the non-refundable money you’ve paid, travel insurance can be a smart investment.
When Is Travel Insurance Worth It?
Buying the travel insurance is usually worth it if:
- Your non-refundable trip costs are much more than you can afford to lose.
- You are traveling internationally.
- You are traveling to a remote area with limited health care facilities.
- You are traveling to a hurricane-prone area.
- Your trip involves connecting flights or multiple destinations.
- You want to be partially reimbursed if you decide to cancel your trip or return home early for any reason.
All in all, travel insurance is a small cost relative to the trip costs you might lose—especially when traveling uncertainties and surprises abound.
What Does Travel Insurance Cover?
Travel insurance compensates you for money you lose due to unforeseen events before and during your trip. Just as importantly, it can pay for emergency medical care and evacuation during your trip.
The best travel insurance policies package together a range of coverage types related to trip cancellation, medical issues, baggage problems and more.
Summary: What Travel Insurance Covers
| TRAVEL INSURANCE COVERAGE | WHAT IT COVERS |
|---|---|
| Trip cancellation | 100% of prepaid, non-refundable deposits if you cancel the trip for a reason listed in the policy |
| Travel delay | Reimburses expenses incurred due to travel delays, if the reason is covered by the policy |
| Cancel for any reason | Allows you to cancel your trip and receive partial reimbursement for any reason beyond what is listed in the base policy |
| Travel medical insurance | Pays for medical expenses during the trip |
| Emergency medical evacuation | Pays for you to get to the nearest adequate medical facility |
| Trip interruption | Reimburses for non-refundable parts of your trip if the interruption is caused by a reason listed in the policy |
| Interruption for any reason | Reimburses for non-refundable parts of your trip for interruptions caused by any reason |
| Missed connection | Reimburses you for costs incurred due to missing a flight or other transportation connection due to an event listed in the policy |
| Baggage delay | Reimburses you for necessities while baggage is delayed |
| Baggage loss and personal effects | Reimburses for lost baggage and personal belongings lost in the baggage |
Where Can You Buy Travel Insurance?
You can buy travel insurance from travel insurance company websites, travel insurance comparison sites and from travel insurance agents. Travel agents who sell travel insurance can also help you purchase a policy.
Some tour operators also sell travel insurance, but you’re generally better off buying a policy yourself because you can customize it for your particular needs.
Buying travel insurance online is super convenient—you can usually get travel insurance quotes instantly by entering your:
- Age
- Destination
- Trip cost
- Travel dates
How Much Does Travel Insurance Cost?
Typically, the cost of travel insurance is 5% to 6% of your trip cost, according to Forbes Advisor’s analysis.
The average travel insurance cost is $228 for a $5,000 trip, and the range of rates for insuring a $5,000 trip is from $154 for a basic policy up to $437 for a policy with generous coverage.
Your age, the coverage you buy and your trip cost are key factors that affect how much you pay for a policy.
What Does Travel Insurance Not Cover?
Travel insurance doesn’t cover losses due to reasons and circumstances that are within your control. It’s designed to safeguard your trip investment if unexpected circumstances derail your plans.
For instance, trip cancellation benefits only apply if you cancel due to a reason listed in the policy, which are unforeseen events beyond your control. That means you won’t be eligible to file a standard trip cancellation insurance claim if you simply change your mind about going on your trip. For that, you would need “cancel for any reason” coverage.
Review the policy fine print before you buy it and familiarize yourself with what the policy doesn’t cover. For example, travel medical insurance generally excludes costs such as:
- Elective procedures
- Mental health care
- Participation in adventure or extreme activities
- Physical therapy
- Routine physicals and routine dental exams
- Routine pregnancy
Also be aware that travel insurance policies generally won’t cover money you lose because of a hurricane unless you purchase travel insurance before the storm is named.
When Is Travel Insurance Not Necessary?
You generally don’t need travel insurance if you’re not putting down large non-refundable trip deposits, or if your U.S. health plan will cover you at your destination.
Here are some scenarios where you may not need travel insurance.
- Business travel: If your company is booking and paying for your domestic business trip, you likely don’t need your own travel insurance. If your business trip takes you outside of the country, you should check with your employer to see if your company has insurance that includes travel medical insurance that covers you. If it doesn’t, you should consider buying your own travel medical expense insurance.
- A cheap domestic trip: If you can afford to lose the non-refundable deposits of your trip, you may not need travel insurance. Whether travel insurance is worth it may hinge on the cost of a policy compared to your non-refundable deposits.
- An inexpensive tour component: If you only have one or two inexpensive tours or day trips on your itinerary, it may not be worth the cost to insure them. Take a look at what you stand to lose if you had to cancel. If you have a lot of tours and activities lined up that total a significant outlay, it may be worth insuring them.
- Trips taken with miles or points: Although you can snag great perks from cashing in points and miles, travel insurance can’t insure the value of trips booked using miles or points, says Jason Schreier, chief executive officer of Aegis, a travel insurance company. Keep in mind that if you interrupt your trip to head home for an emergency, you may lose all those points and be exposed to last-minute flight costs.
- Trips where you’re already covered: You may already have some travel insurance benefits through a credit card or from an airline if you opted for flight insurance as an add-on. Check the details of any applicable coverage you may have. It may suffice for your needs, in which case you won’t need a separate travel insurance policy.
- Baggage insurance if you have home or renters insurance: If you have homeowners or renters insurance and you aren’t packing a lot of valuable items for your trip, you may want to consider skipping baggage insurance. That’s because baggage loss coverage is often secondary, which means you first have to file a claim with your airline or homeowners or renters insurance before making a baggage claim for any remaining loss.
Read the full article, click here.
