Updated May 20, 2019

Is Travel Insurance Worth It?

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Travel insurance can protect you from financial loss, but do you really need it? Read on to learn if buying insurance is a good idea.

Why It Is Important

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No one plans for their trip to go off the rails, but it happens. Travel insurance can help you deal with minor hassles and full-blown disasters.

Policies cover lots of different situations. Take a look at the most popular benefits of travel insurance and what may, or may not, be covered.

Trip Cancellation

Cancellation coverage is the most popular reason people buy travel insurance. It reimburses your non-refundable costs when you cancel your trip for a covered reason. This may include:

  • You cancel your trip because you're sick.
  • A natural disaster destroys your destination.
  • Someone in your family died.
  • There's a terrorist event at your destination.
  • The airline has gone bankrupt.

Trip cancellation insurance doesn't cover every case, though. Here are some common reasons a trip cancellation claim could be denied:

  • You canceled your trip due to illness but didn't see a doctor.
  • You booked a trip when a natural disaster was already forecasted, and decided later on to cancel.
  • A travel warning was issued for your destination, but you booked your trip anyway and then decided to cancel.

Baggage

If your luggage is delayed or lost during a trip, you'll need to buy clothes and personal items. You might also need to replace electronics or personal documents. Travel insurance will reimburse you, to a certain limit, for your purchases. Insurance staff can also work with the airline to track down your luggage.

Baggage coverage can include:

  • The airline lost your luggage.
  • Your luggage was delayed during your trip.
  • The airline damaged your bags.
  • Your belongings were stolen while you were on your trip.

Of course, you are expected to take reasonable care of your baggage while you're traveling. The insurance may not cover your claim if:

  • Your bags were not checked with the airline.
  • You hired a third-party to handle your luggage.
  • You left your belongings unsecured or in plain view (e.g., your camera was stolen from an unlocked car).

    One of the best ways to make sure your valuables stay safe is to keep them out of your most easily-lost bag - or, better yet, not bring them at all. This article from What to Pack lists everything you should never store in a checked bag.

Medical

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There's nothing worse than getting sick or hurt while you're traveling. Not only is your trip disrupted, but there will be doctor's bills to deal with. And there's a good chance your domestic insurance won't cover you outside the country. If it does, there may be strict limits on your benefits. Federal or state benefits, like Medicare, never cover outside the U.S.

In the most serious cases, you may need to be medically evacuated to a better hospital or back to your home. Your domestic insurance won't cover that, either.

Travel insurance will help cover the costs if you need medical treatment or an evacuation while you're traveling. Not all medical expenses are covered, though. All insurance policies have exclusions, such as:

  • You traveled against the advice of a doctor.
  • You were injured while intoxicated.
  • You didn't keep documentation of your doctor's visit.

How Much Does Travel Insurance Cost?

Like any other insurance, travel policies vary in price.

Some premiums are based on a flat percentage of the trip amount. For standard coverage, this fee is usually five to 10 percent of your trip cost.

Other premiums are calculated using details specific to you and your trip. Some of these factors may include:

  • Coverage type
  • Benefit maximums
  • Age of traveler(s)
  • Your destination
  • Duration of your trip

In general, you can expect to pay more for plans with the most benefits.

Where Can I Get Travel Insurance?

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Travelers have several options when shopping for insurance. Take a look at some of these starting points.

  • Airline or Tour Company
    Airlines, tour companies, and cruise lines offer travel insurance when you book online. Look for the option to add insurance when you're completing your purchase. Before you buy, be sure to read the policy to learn the coverage and pricing. If a copy of the policy is not available to you, beware. Don't buy a policy if you don't understand the benefits or price.

  • Online Broker
    Travel insurance is available through many online brokers. Brokers offer a variety of trip and medical plans in a wide range of prices. Their websites have easy-to-use tools for comparing plans and benefits. If you have questions, you can contact the broker directly for help.

  • Credit Card
    You may already have travel insurance, even if you don't know it. Some credit cards provide travel insurance to their cardholders. Call your credit card if you're not sure what's offered. If you do have coverage, request a copy of the policy. But be careful—many of these plans don't include medical coverage.

Understanding Your Needs

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Travel insurance can be important, but it may not be for everyone. Consider your risks before deciding if it's right for you.

  • Flights
    A short domestic flight may only set you back a couple hundred dollars. Insurance on the ticket might not be worth the extra fee. Longer trips or last-minute flights have a higher ticket price, though. Trip insurance can cover you if the flight is canceled.

  • Medical Costs
    If you're traveling inside the U.S., your domestic insurance will probably follow you. Extra coverage may not be necessary. But consider the financial risk of getting sick or hurt outside the U.S. Insurance can help cover those unexpected medical bills.

  • Destination
    Are you going to a high-risk location? For example, if you're traveling to the Caribbean during hurricane season, your trip could be canceled. Or if you're traveling to an area of political turmoil, it may become unsafe. Take into account the amount of non-refundable expenses you've paid. Insurance can help you recoup the costs if your trip is canceled.

  • Visa Requirements
    Do your research. Some countries require visitors to prove they have travel medical benefits before they'll issue a visa.

Is It Worth It?

Travel insurance is only one part of planning a trip. But it's an important part to consider. You may be risking financial loss.

Do you have medical insurance that will cover you in your destination? If so, what are the limitations? And if your domestic insurance won't cover you, can you afford to pay medical bills if you get sick or hurt?

What about your flight tickets or reservations? If you've paid for non-refundable tickets or deposits, you could lose your money if your trip is canceled.

Look at the big picture and consider your risks.

More from CreditDonkey:


Credit Cards for International Travel


Airline Miles for Beginners


Chase Sapphire Travel Insurance

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