Is Travel Insurance Worth It?

Travel insurance may be worth the added cost if you are traveling where there is a significant upfront cost. When you could potentially lose thousands of dollars, travel insurance could be worth it. However, it isn’t necessary for every trip you take.

What is travel insurance?

Travel insurance is a type of policy that you can purchase to protect your trip from any unforeseen events or emergencies.  You can purchase travel insurance to cover the expenses of your trip as well as any delays, cancellations, lost luggage, and even natural disasters.  The type of insurance you purchase is up to your comfort level. 

The types of travel insurance

There are 2 types of travel insurance.  The most common is basic travel protection.  You’ll typically see this as an add on option when you purchase your flights through an online travel agency (like orbitz, travelocity, etc).  This type of insurance only covers the basics of missed travel like cancelling a nonrefundable ticket due to a family emergency or missing a flight for some reason. 

The 2nd type is comprehensive travel insurance.  This type of insurance will cover basically everything.  From lost luggage, travel delays and even medical emergencies.  This is a type of package deal where you get travel and medical insurance in one.  

If you’re going to be purchasing travel insurance, you’ll pretty much want to stick with the comprehensive plan.  This will cover you for anything that can arise and you’ll be covered for most of the scenarios. Particularly useful is the medical coverage since your health insurance provider probably won’t cover you overseas and many countries will require payment up front before any medical treatment is done.  

When NOT to buy travel insurance

For most domestic trips, you aren’t going to need travel insurance.  Mainly, your health insurance provider will probably have some sort of coverage when you’re in the US.  

Also, if your domestic trip is fairly cheap, there’s no reason to add on to the cost by getting travel insurance because the cost will probably be greater than the cost of the trip itself.  For cheap flights and trips, it won’t make any sense to spend the same amount in travel insurance when paying the rebooking fee or just considering it a loss would be a cheaper option. 

For frequent travelers with a travel card, you may also be covered up to a certain amount through your credit card.  For example, the Chase Sapphire Reserve card has comprehensive travel insurance included as a benefit. This card covers most instances where travel insurance is necessary and is standard coverage that is pretty much the same as that offered by independent insurance firms. 

When to buy travel insurance

If you’re traveling internationally, you may want to consider travel insurance.  Most people will plan an international trip months and months in advance. In the process, they’ll not only book flights but hotels, tours, and even rental cars as well.  This is a lot to plan and purchase when you don’t know what might happen a couple months from now. When the bulk of your trip is being planned well in advance, you may want to protect that.  Travel insurance when you’re potentially spending thousands of dollars makes sense.  

Another reason to buy travel insurance is medical insurance.  Remember comprehensive travel insurance is basically a package deal of travel AND medical insurance.  If you get tossed around while surfing or have an unexpected fall while hiking, those medical bills can cost a lot.  And those costs will go up astronomically if you need to be airlifted out.  

One thing to note about medical coverage is that it does NOT cover preexisting conditions or any medical emergencies that may arise if you travel against doctor’s orders.  Also, you’ll want to read the fine print because some travel insurance isn’t going to cover risky behavior as well.  

If there is one travel activity that ticks all the boxes for travel insurance, it’s cruises.  You’re not only traveling overseas but you also might need medical attention. Add to that the huge upfront cost of booking a cruise and travel insurance is looking more and more attractive.  

Another reason to buy travel insurance for a cruise is the weather.  You can’t predict what the weather (ie hurricane) will be like months from now.  If you purchase travel insurance from the beginning, you’ll be covered. However, if you wait until the last second and a hurricane is spotted, it’ll be too late and you won’t be allowed to purchase insurance.  Much like you can’t buy fire insurance after your house is in danger of burning to the ground, you can’t purchase travel insurance after bad weather is forecast.

Where to buy?

Any quick Google search will bring up a host of places to purchase travel insurance.  However, you might want to check with whatever company you have your home/car/medical insurance with as well.  Assuming you’re happy with the service, you might be able to get a good rate for comprehensive travel insurance.  You should also check out your local AAA branch office for rates as well.  

Whichever avenue you choose, you’ll definitely want to shop around and see what the differences are in coverage.  Most of the comprehensive plans offer the same coverage (and non coverage) so there really isn’t a difference. The only difference is that if you buy early (as in about 15 days from the initial deposit), you might be eligible for bonus coverage or coverage for things that aren’t usually covered.  

Final Thoughts

If you don’t travel that often, you might be confused about the necessity of travel insurance.  Of course anyone selling you insurance will tell you it’s an absolutely necessity. However, for most cases, it really isn’t.  

If you are an avid traveler, you’re probably already covered under a premium credit card.  In that case, there really is no reason to purchase travel insurance. Ultimately, the necessity of travel insurance is going to be dictated by your risk level and what you feel comfortable losing if you don’t have it. 

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