Is travel insurance worth it?

30 March 2023

You’ve spent weeks meticulously planning your vacation — everything from airfare and hotels to an itinerary. However, what do you do when something unexpected occurs and suddenly you can’t take your trip?

Some purchase travel insurance. It can help you potentially avoid losing the thousands of dollars you spent on your vacation.

But when is travel insurance worth buying?

Here’s everything you need to know about travel insurance so you can decide if you should purchase a policy for your next trip.

What is travel insurance?

Travel insurance is coverage you can purchase to protect yourself from risks and potential financial losses you may incur while traveling, according to insurance company Nationwide.

There are two categories of travel insurance: trip cancellation protection and comprehensive travel insurance.

Trip cancellation insurance is the most basic form of travel insurance. It covers your lost bags or missed connecting flights in the event you cannot travel due to illness or injury.

Comprehensive travel insurance covers many of the same issues as trip cancellation insurance. However, it also offers coverage for medical and dental emergencies, emergency evacuations in the event of a disaster, 24-hour traveler assistance and accidental death benefits.

Travel insurance can provide many different types of coverage, though you may feel reluctant to tack on another expense to your trip.

When should I purchase travel insurance?

While travel insurance has its benefits, you only need to purchase it in certain scenarios.

When to skip buying travel insurance

You can skip purchasing travel insurance if you’re traveling within the U.S. Flying domestically typically isn’t as expensive compared to international trips. Also, if you already have medical insurance, you will most likely be covered in the event of a medical emergency in another state.

Purchasing insurance that only covers flight cancellations or lost baggage may not be wise either.

For instance, if your flight is canceled, you won’t necessarily lose all the money you spent on airfare. That’s because airlines typically book passengers on the next available flight. Even if the next available flight doesn’t work for you, passengers are entitled to refunds from airlines if their flights are canceled or significantly delayed.

You also may not need to buy travel insurance if you have a card like the Chase Sapphire Preferred Card or The Platinum Card® from American Express. Some credit cards already offer a few travel insurance benefits such as trip cancellation protection and lost luggage reimbursements. Keep in mind, though, that the insurance perks credit cards offer may not be sufficient for larger trips.

When to buy travel insurance

You should only consider travel insurance if you’re traveling at least 100 miles away and you have travel concerns, according to Suzanne Morrow, senior vice president of e-commerce at InsureMyTrip.

“Am I concerned that something happens to me medically? Am I concerned if there’s delays or cancellations or anything that’ll prevent me from being able to go?” Morrow said. “Once people can identify the things they’re concerned about, they can think about what type of travel insurance they need.”

Travel insurance can come in handy when traveling internationally, particularly for medical coverage since U.S. travelers won’t otherwise have medical insurance abroad.

Megan Moncrief, chief marketing officer at travel insurance comparison site Squaremouth, said travel insurance can be beneficial for international trips due to the chances of facing more inconveniences associated with higher traveling costs.

“Most of us have health insurance here. We don’t need the medical side of traveling domestically,” Moncrief said. “If you’re traveling internationally, you’re more than likely to have a higher trip cost, more legs to your trip, so more chances to be inconvenienced along the way.”

Besides cancellations or medical coverage, comprehensive travel insurance can also allow you to book a flight quickly in the event you have to abruptly leave your vacation for an unplanned situation like a family emergency. Travel insurance plans can offer medical evacuation or emergency evacuation coverage, where travelers — in the absolute worst-case scenario — can be transported to the nearest hospital or medical facility in the event of illness or injury without accruing six-figure medical bills.

“Unless you 100% know your medical insurance is going to take care of you outside of the United States, 100% for that reason alone [you should consider travel medical insurance],” Morrow said. “The second is the evacuation piece because, believe it or not, that can get really, really expensive if you have to be medically evac’d and have to pay it out of your pocket.”

However, Stan Sandberg, co-founder of TravelInsurance.com, said he believes consumers should only purchase travel insurance if their trip has any nonrefundable components that they wouldn’t want to lose money over.

“We see a lot of people who are looking for insurance for the post-departure benefits,” Sandberg said. “So, when they’re on the trip, they want the emergency medical expense coverage. If someone were to get sick or if something goes wrong, then that’s covered.”

How do I purchase travel insurance?

There are two ways you can purchase travel insurance: by searching comparison sites for a quote or directly from a provider.

Travel comparison sites, such as InsureMyTrip, Squaremouth and TravelInsurance.com, allow you to compare policies and prices across multiple travel insurance companies, which may give you the most options. You can also purchase travel insurance directly from a provider — companies such as Allianz and AIG are popular.

Surprisingly, travel insurance isn’t expensive. You should expect to spend around 4% to 10% of the total for your nonrefundable trip costs, per InsureMyTrip.

You may feel reluctant to tack on another expense to an already pricey vacation, but with travel insurance only costing, on average, $280 to insure $5,200 of expenses, according to Moncrief, the extra expense may be worth it for added peace of mind.

“It makes it look a lot more attractive when you can think, ‘Well, I can either lose $5,200 if I can’t travel or spend $280 to make sure I don’t ever lose the $5,200,’” Moncrief said.

Bottom line

There are perks to having travel insurance. It can be worth buying for international trips in case a medical or family emergency causes you to suddenly cancel the rest of your trip.

By only spending a couple of hundred dollars, you’ll potentially save yourself thousands of dollars.

“Travel is becoming more expensive,” Moncrief said. “Inflation is very real, and what we’re seeing is travelers are having to spend more on their travel; therefore they’re less likely to want to risk that expense.”

Related reading:

The best travel insurance policies and providers
The best credit cards with travel insurance
7 things to look out for when buying travel insurance, according to an expert
Here’s why I buy an annual travel insurance policy, even though my credit cards offer travel protections
All you need to know about annual travel insurance policies

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