Is Travel Insurance Worth It?

The idea of travel insurance is the least fun part of any trip. Hedging against your trip going sideways is not your favorite way to spend your money, I would bet. Researching hotels, restaurants, and activities sounds much more appealing than reading the fine print of yet another insurance plan. The reality, though, is that it can be very important when you’re planning an expensive trip, hearing others’ stories of medical issues abroad and wondering if it could happen to you, or booking non-refundable hotels. Plans can change unexpectedly, and it’s not a bad idea to be prepared for those times.

I’ve traveled extensively through the years, domestically in the United States and internationally, primarily Europe, and I’ve actually never purchased travel insurance. Some trips it never crossed my mind, and other trips I looked at how much money I had invested, what I could lose if I didn’t end up going, and how comfortable I was taking the financial risk. So far, I’ve been comfortable enough to not purchase it.

In no way does my personal preference or decisions have any bearing on what I think about travel insurance in general. There are trips (especially as I get older) that buying travel insurance would possibly make more sense and give some peace of mind, particularly if I had thousands of dollars tied up in non-refundable reservations or was concerned about getting medical coverage traveling abroad.

So, is travel insurance worth it? Unfortunately I can’t tell you a straight yes-or-no here. Each person’s situation is different and each trip is unique. Here’s what travelers should understand about travel insurance, when it could be worth buying, and what to consider before deciding whether you need it for that upcoming trip.

As I said, I don’t think travel insurance is always worth it, and I also don’t think you need to purchase it just because you’ve booked a trip. Instead, I’d recommend asking the question: Is travel insurance worth it for this particular trip? The answer will depend on several things, including trip cost, what is non-refundable (this is my biggest factor), what type of health insurance plan you have, and if you have a credit card that offers enough coverage that you feel is sufficient.

As an example, a $500 weekend getaway with a fully refundable hotel reservation is much different than a $10,000 cruise down the Rhine River and offers no refunds.

Existing coverage matters as well. Some health insurance policies do provide international coverage, while other policies have limited coverage. There could be certain travel protections through your credit cards, specifically when you use the card to pay for flights, hotels, rental cars, or activities.

Before I buy travel insurance, I would ask myself a few questions:

How much money will I lose if I have to cancel this trip? What would happen if I needed medical care while I was traveling? What coverage do I already have? Would an unexpected expense negatively affect me financially?

These are going to help you suss out whether a travel insurance policy makes sense for you instead of simply assuming you need it.

Because I often travel solo, I have some solo travel safety tips that also cover some of the precautions I take when traveling alone. If you’re new to traveling solo, my guide on how to travel solo will be a good resource for you. Insurance is only part of the decision process in your solo adventures. These will help with the others.

The Louvre

Let’s get into it. Travel insurance is a type of insurance designed to protect travelers from certain financial losses and emergencies associated with a trip they are taking. Travel insurance companies offer many different policies, and what exactly each policy covers will depend on the policy you purchase. “Travel insurance” is a broad term, and there is no standard product that works the same for all trips. Some policies cover trip cancellation or interruption. Others focus on emergency medical expenses while traveling. Comprehensive travel insurance plans may combine several different types of protection into one policy.

Depending on the type of policy, your travel insurance may include coverage for the following:

• Trip cancellation or interruption
• Emergency medical expenses
• Emergency medical evacuation
• Lost, stolen, or delayed baggage
• Significant travel delays
• Missed connections
• Certain expenses if you have to cut your trip short

There are also travel medical insurance policies that focus specifically on medical expenses and emergency care while you’re away from home. Something important to note, though, is that travel insurance does not cover every possible thing that can go awry on a trip. Policies often have specific coverage reasons, exclusions, coverage limits, deductibles, and requirements. You really want to understand what you’re buying (and also not buying) before obtaining a policy.

Generally, travel insurance works by letting you purchase coverage for a particular trip or period of travel. If something happens during the trip that qualifies for activation of the coverage of your policy, you can typically submit a claim for reimbursement. Here’s how the basic process works.

Decide What You Want to Protect

We all have different concerns when we travel, so the policy we choose will be specific to our own needs. Perhaps you’re worried about thousands of dollars in non-refundable reservations. Maybe you have a propensity for falling everywhere you go, and going to a new destination might not be any different. Whatever it is that worries you, you’ll want to take that into consideration. A short weekend domestic trip will not be treated like a three-week long international vacation.

Compare Insurance Plans

Once you’ve decided on the major items you want to protect, it’s a good time to start comparing insurance plans based on coverage and not just price. Check out the maximum coverage amounts, reasons for cancellation, exclusions, deductibles, and benefits for things like emergency medical expenses, baggage, and travel delays. Similarly priced policies might have wildly different levels of protection, so be thorough.

Purchase Your Policy

You can typically buy your policy directly from the travel insurance companies, comparison sites, or even when booking your flight, cruise, tour, or package. Be sure to understand what you need in order to purchase the policy. Some might require you to purchase in a specific timeframe, and this could be important for certain benefits involving a pre-existing medical condition or optional cancel for any reason (CFAR) coverage.

Contact the Insurance Company if Something Happens

If something does happen on your well-earned vacation, do reach out to the insurance company. Your policy may include an assistance service you can contact. As an example, if you need emergency care abroad, the insurer may be able to help you locate an appropriate facility or explain what documentation you may need to submit. You may have to pay out of pocket and then get reimbursed later. This is all information that would be good to ask on the front end.

Keep Documentation

I’m guilty for being rather poor at this, but keeping documentation can be really important when filing a claim. Depending on what happened, you might need receipts, medical records, proof of payment, airline documentation, police reports, or written confirmation from a travel provider. Scan them in your phone or take photos at the very least, and keep any copies until the claim has been resolved.

Submit a Claim

Submitting insurance claims is never enjoyable, but if you’ve experienced a loss, you’ll want to do this with your insurance company with the required documentation. They will review the claim based on the terms of your policy and determine whether it qualifies for reimbursement. It’s so important to understand what you’ve purchased, from coverage limits, exclusions, covered reasons, deductibles, documentation requirements, and purchase deadlines before relying on an insurance plan.

Should I Get Travel Insurance?

Sure, sometimes it’s worth getting travel insurance. I’ve never purchased it because I am careful with how I book things, whether it’s airfare or hotels, and the financial risk is typically low for me. Where I would consider it is if I were going on a group trip booked through a company that became non-refundable, or any other situation where I would lose thousands of dollars should I not take the trip. Otherwise, it’s not for me.

I think travelers who are more concerned about needing medical care while away may want to look more closely at their existing coverage and what a travel insurance policy could add. Things happen, trips have to get canceled all the time, and it’s good to be covered.

Not everyone feels the need for travel insurance, and not every traveler needs all the types of insurance available. You might want to get travel insurance if:

• You’re taking an expensive trip with pre-paid, non-refundable costs
• You’re traveling internationally and your health insurance does not cover medical care abroad
• You’re concerned about the potential cost of emergency medical treatment or evacuation
• You have a medical condition
• You’re booking a cruise, organized tour, or another trip requiring substantial upfront payment
• You’re traveling somewhere remote where emergency care or transportation could become expensive
• Losing your prepaid trip cost would create a serious financial problem
• You’re taking a complicated trip involving multiple flights, hotels, tours, or other reservations
• You’re planning a long trip where an unexpected event could force you to cut your trip short
• You want additional protection beyond what your health insurance or credit cards already provide

On the flip side, like myself most of the time, you might decide that insurance is not worth the additional expense for a relatively inexpensive trip where you can cancel at any time, or the financial risk is not that great.

A NYC Trip Where Trip Insurance Almost Was Needed

If buying travel insurance is the right move for you, do a bit of research so you don’t do yourself a disservice. The price should not be the only thing determining the coverage you get.

Calculate Your Non-refundable Trip Cost

Figure out how much money is actually at risk and go from there. Can you get refunded on your flight, hotel, activities? Let that guide you into whether you need to buy it from that perspective. Will your hotel let you cancel 24 hours before arrival? That might create less stress. I booked a hotel that required me to cancel at least two weeks before arrival. When I got COVID the day before and had to cancel, they refused refunding me. In my opinion, it was a garbage hotel policy, and I will never stay at that hotel as long as I live. You can’t help when you get sick, and sometimes it’s better to make an exception than a lifelong hater. But, you do you, hotel on Coronado Island in San Diego (not the Del).

Check Your Existing Health Insurance

You might not even need medical insurance if your current policy has decent coverage when you travel. I’d particularly asterisk this for international travel. How do they handle medical treatment, hospitalization, emergency care, or any other medical expenses outside of your home country? That might be your deciding factor.

Review Your Credit Card Benefits

Sometimes credit cards can really be the hero when traveling, so be sure to check your benefits before spending more money on travel insurance. There may be lower limits or more restrictions, but that might not matter to you, so be sure to do a little digging with them.

Look Closely at Emergency Medical Coverage

When the shit hits the fan and you need emergency medical coverage in another country, it would be good to know what you have that covers you, if anything. No one is immune from accidents, and knowing where you stand could come in handy should anything happen.

Read the Covered Reasons for Cancellation

Reading the fine print is a pain, but it’s also helpful when you need to know what’s on there. Standard trip cancellation does not always or usually mean that you can cancel your trip for absolutely any reason and get your money back. There are typically specific reasons, and you likely want to know what they are before signing on the dotted line.

Pay Attention to Exclusions

Sometimes in life, what’s not included is more important than what is included, and this could be one of those times. Certain activities, destinations, events, or circumstances might leave you at your own risk, so never assume something is covered because you deem it reasonable to be covered.

Compare Coverage Limits

If you are comparing comprehensive travel insurance plans, be sure to check thoroughly what coverage is actually included. If two policies cover medical expenses, their terms might be very different for, say, emergency medical coverage. This goes for trip cancellation, interruption, baggage, evacuation, and any other benefits that matter to you.

Understand Deductibles and Reimbursement

It seems like deductibles are synonymous with insurance policies, so be sure to know how much yours is or if there is one when choosing a policy. This is particularly important for medical care. How will the insurance company pay the provider? Do you pay the bill and they pay you back? These are some good things to find out.

Check Purchase Deadlines

If travel insurance is on your radar, don’t wait until the last minute to do your research. Some benefits have purchase deadlines when you make your initial trip purchase or payment. It could apply to pre-existing medical conditions or the option to add cancel for any reason coverage.

Research Travel Insurance Companies

Not all travel insurance companies are made the same or offer the same policies. Look for clarity in explaining their coverage, their claims procedures, and assistance services. Customer reviews are always a good idea as well, as you can read through how people experienced each company after submitting a claim. However, at the end of the day, the policy documents are what determine what you’re buying.

Sometimes yes, sometimes no. Because I’ve never purchased it, you can see where I generally stand on it. It’s always going to come down to the type of trip and the person who feels like they need the insurance. There’s no universal decision of whether a policy makes sense for you, so do your research, know your limits, and make the decision from there. There are always pros and cons to every type of insurance, and this is no different. Whatever your decision, it will probably be the right one for you. Happy and safe travels!

If you enjoyed this guide, you may also like to read what to pack for international travel or essential items for traveling on a plane.

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