Travel Insurance 101: Is It Worth It?

Planning a vacation is complicated. Between packing, booking flights, setting up accommodations and finding someone to look after your pets, it’s amazing that people travel anywhere at all. Furthermore, the Bureau of Transportation Statistics reports that flight cancellations have increased each year since 2016. That being said, your trip might end before it begins. However, there is one question that remains constant when planning a trip – whether, or not, to purchase travel insurance.

Is Travel Insurance Worth It?

On one hand, it’s difficult to place a price tag on the peace of mind. This is especially true when it comes to expensive travel plans that could potentially go awry. On the other hand, travel insurance actually has a price tag and it can it is typically an expensive one at that.

This leads one to wonder – is travel insurance worth it, or is it worth the risk to pass up? Here are a few tips on how to decide if it’s worthwhile to purchase travel insurance for your next trip.

Types of Travel Insurance

Before we look into the pros and cons, let’s review the common insurance options.

Emergency Medical Care Insurance

Your primary health insurance – including Medicare – may not cover treatments and/or medications while out of the country. We strongly recommend that you check with your insurer as to the extent of your coverage before you leave.

You can always contact the local embassy to locate appropriate medical services in the event of an emergency. However, the State Department will not help cover any of your medical expenses whereas certain travel insurance plans will.

Emergency medical insurance provides peace of mind in that it is a financial safety net. It will help you pay unexpected medical bills that could potentially add up to hundreds, maybe even thousands, of dollars.

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Delayed or Lost Luggage Insurance

Most every traveler worries that they’ll be separated from their luggage during their trip. This is a very real concern. I mean, common…who wants to wear convenience store flip-flops and/or their travel companions underwear?

Luggage insurance will not reunite you with your luggage any faster. However, it will reimburse you for the costs related to replacement clothing, toiletries, and medication.

Accidental Death Insurance

It’s probably the last thing you want to think about, but unexpected things can happen while traveling. Accidental death insurance is similar to a life insurance policy in that it pays out benefits to the designated beneficiary.

Trip Cancellation or Interruption Insurance

Stuff happens…there’s no getting around this simple fact. You never know when you’ll need to cancel your vacation or Mother Nature decides to interrupt your trip. Trip cancellation or interruption insurance will typically reimburse your travel expenses if you cancel your trip or the cost of return tickets home if your trip is interrupted.

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You Should Really Consider Travel Insurance If…

Does your itinerary include a lot of flights and stopovers? If so, each one is a potential point of failure. A non-stop flight to an all-inclusive resort in Mexico during spring break is far less of an insurance risk than a three-week-long European tour with 12 destinations during the height of blizzard season.
Travel insurance is a brilliant idea if you’re heading to an area where there is civil or political unrest. A whole lot can happen between the time you book your trip and when you arrive at your destination. The situation on the ground could become more volatile, your accommodation reservations could be canceled, or travel to the area could be restricted before you leave. In a worst-case scenario, you may need a non-medical related emergency evacuation to take you to safety. Make sure to read the fine print to make sure your policy covers war and civil disorder if you’re purchasing travel insurance under this scenario.
Sometimes the best reason to buy travel insurance is if you won’t be able to relax on your trip without it. If worrying about something going wrong will overshadow your entire trip and keep you from enjoying yourself, spring for the coverage to ease your mind.

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You Should Skip Travel Insurance If…

You may be able to totally skip over travel insurance if you have a credit card that provides it as a standard benefit to customers. Call your credit card company to see if travel insurance is available to you. It’s also smart to have them add a travel alert to your account while you have them on the phone.
All travel insurance policies are not created equal. Heck, some may not include the type of coverage that you want and/or need. Some travel insurance policies only cover lost luggage. This sort of plan is totally useless if you only travel with carry-on bags.
It’s usually not worthwhile to invest in travel insurance for short, inexpensive domestic trips. One exception is if you’re traveling to a location that is prone to hurricanes or other predictable natural events (eg volcanoes) in the timeframe that you plan to visit. In short, make sure that your policy covers natural disasters.