Is Travel Insurance Worth It? 4 Reasons You Need to Insure Your Next TripHow to Travel Cheap
Money Done Right does not run display ads or accept sponsorships to promote particular products or services. However, we may receive a commission if you purchase or sign up through links on this page. Here's more information about how we make money.
If you’re a thrifty traveler who wants to maximize your experiences while minimizing your costs, you might be questioning whether travel insurance is worth it.
If you think you can’t afford travel insurance, I’d argue that you can’t afford to skip it. No one wants to imagine getting injured or falling ill during a trip, but anything can happen. No one expects to cancel a trip at the last minute, but how can you be sure?
How Much Does Travel Insurance Cost?
Travel insurance may not be as expensive as you think.
At a bare minimum, you can buy a trip cancellation policy from your airline upon booking a flght. According to research by Checkbook.org, these policies typically cost just $15-30 per person for budget airfare and 3-15% of the ticket price for more expensive flights.
However, you might find yourself limited to what these policies will cover (there’s a lot of fine print).
Plus, most of these policies cover just your airfare. What about your other trip expenses such as your hotel stay or tours… or what if you’re going on a cruise? And what if you get sick or hurt yourself?
There are a number of excellent travel insurance policies that can give you peace of mind while protecting your health and your wallet. If you choose to purchase coverage from an insurance company such as Allianz or World Nomads, you can expect to pay anywhere from 4-10% of your total trip cost.
Credit Cards With Travel Insurance
In addition, you may already have some level of travel insurance coverage already tucked away in your wallet.
Many premium travel rewards credit cards include relatively comprehensive insurance packages. Although the amount of coverage they provide is sometimes a little light, using a credit card with travel coverage can come in handy. Plus, it’s better than nothing.
For example, if you book a trip using your Chase Sapphire Preferred or Reserve card, you’ll automatically have trip cancellation/interruption, trip delay, and baggage delay coverage. Primary auto rental coverage is also included, and these are just a few Chase Sapphire benefits.
No matter where you get your travel insurance, there are plenty of providers that can meet your needs without breaking the bank.
If you think travel insurance isn’t worth the cost, think again. Here are four reasons you need to insure your next trip.
Reason 1: Life Happens
Imagine this: You’ve spent months planning a trip. Flights are booked… hotels are prepaid… all that’s left to do is pack your bags and enjoy that hard-earned vacation.
And then, at the worst possible time, you come down with pneumonia — no way you’re fit to travel.
What happens to the non-refundable costs you already paid toward your trip?
Well, if you don’t have travel insurance, you’re out of that money.
Trip cancellation insurance is a type of travel insurance that protects the financial investment you make in your trip. If you have to cancel for a covered reason, your insurance provider will reimburse you for any non-refundable deposits.
The definition of a covered reason will vary by provider, but generally, it includes things like:
- Illness or injury of you, a traveling companion, or an immediate family member
- Death of an immediate family member or traveling companion
- Jury duty
- Extreme weather that stops you from beginning or continuing your trip
- Financial default of a travel provider
While trip cancellation insurance will cost you a little upfront, it’s simply too risky to go without it if you’ve made large non-refundable deposits. I don’t think there’d be any doubt in your mind whether travel insurance was worth it.
Protect your investment and your peace of mind by covering your trip.
Reason 2: You Might Need to Cut Things Short
Before a trip isn’t the only time something can come up and throw your plans for a loop. There may be times when you’re at your destination and need to return home suddenly, earlier than expected.
Examples might include a close family member falling seriously ill, a work emergency, or an evacuation order.
Again, if you don’t have travel insurance in place, you could lose hundreds or thousands of dollars if you have to abandon a non-refundable pre-paid trip. You might also incur extra costs getting home on short notice.
Trip interruption insurance protects you from such losses when you have to cut things short for a covered reason. Many policies cover up to 150% of the unused non-refundable portion of your trip, which cushions you against those extra costs.
Reason 3: You Can’t Take Risks With Your Health
Besides estimating whether or not travel insurance is worth it, the biggest question you need to answer is this: How would you pay for a medical emergency?
If you can’t answer that question, or if the answer is too scary to fathom, you need travel medical insurance.
After all, if you break your leg while traveling, you could be looking at thousands of dollars in medical costs.
Travel medical insurance covers the cost of emergency medical care, including things like ambulance transport, doctor visits, and hospital stays. Most policies include emergency evacuation and repatriation, as well as accidental death and dismemberment coverage.
There are even additional policies you can purchase in case you forget to bring or lose a needed prescription.
If you’re traveling somewhere that doesn’t offer cheap healthcare to visitors, saving a few dollars by skipping travel medical insurance just isn’t worth it. This is especially true if you’re traveling with your kids. Luckily, many travel insurance providers offer discounted rates to families.
Reason 4: Delays Are Common and Costly
Beyond big risks like illness and injury, there are always the smaller, more mundane risks that every traveler has dealt with at some point. I’m talking about things like travel delays, baggage delays, and all-together-lost luggage.
While these inconveniences usually aren’t the main focus of a travel insurance policy, they are the setbacks you’re most likely to experience.
A travel delay can be a drag. A couple of hours might not matter too much, but what if you’re delayed overnight in a connecting city? You’ll have to pay for a hotel and meals. That’ll run you at least $100 — even more if you’re traveling with family.
Similarly, if your baggage is delayed for any amount of time on your way to your destination (or — worse — lost altogether) you’ll need to buy clothes and personal items to tide you over. If you don’t have travel insurance, that’s money out of your pocket.
Honestly, travel and baggage delays are common. Even if you never have to put in a big medical or trip cancellation claim, travel insurance policies pay for themselves when you find yourself in these inconvenient but all-too-frequent situations.
Does every single person need travel insurance in every single situation? Of course not.
If you’re traveling within your home country and most of your costs are refundable, you might be willing to risk a travel or baggage delay. In these situations, travel insurance might not actually be worth it.
But if you’re traveling internationally and won’t have access to cheap medical care, or if canceling or interrupting your trip would mean a significant financial loss, you can’t afford to skip travel insurance. I hope you never have to file a claim, but as the adage goes, it’s better to be safe than sorry.
Where are you headed next? Do you plan to purchase travel insurance?
Sandra Parsons is a freelance writer and staff writer for Club Thrifty, a website dedicated to helping people dream big, spend less, and travel more.
Sandra Parsons spent eight years in the banking industry before becoming a personal finance writer. She also has a Master's Degree in Psychology from the Memorial University of Newfoundland.