travel insurance worth

Investing in a vacation can be a sizable financial commitment. Pre-paid and sometimes non-refundable travel costs like cruises, airfares, and tours add up. What if the unforeseen happens like a health emergency that prevents you from traveling? Is travel insurance worth it to protect your vacation investment? For many travelers with complex or expensive itineraries, the answer is yes, if you choose carefully.

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Travel Insurance: What Is It?

There are many variations in travel insurance and it’s important to know what your policy covers – or doesn’t cover – before you pack your bags.

For instance, you may see the option to buy flight insurance when you book your airline ticket. This generally covers flight cancellations or interruptions as well as lost, stolen, or damaged luggage, or having a recognized reason to cancel your nonrefundable ticket before your trip. It’s primarily focused on the travel-related portion of your trip, not on-the-ground issues.

There are also comprehensive travel insurance plans that cover the entirety of your trip – both travel and on-the-ground issues like health-related expenses, medical evacuations and lost or stolen personal property like cell phones. Some include life insurance coverages as well.

There are also policies that focus solely on life insurance coverage as related to your travels. These can be purchased alone, if you do not have a comprehensive travel insurance plan that includes it. For example, some insurance companies offer coverage for:

The Pros of Buying Travel Insurance

Travel insurance policies can cover a range of risks as we’ve spelled out. The peace of mind this brings is one of the biggest pros of purchasing travel insurance. If there’s any potential you might not make your nonrefundable trip worth thousands of dollars, having travel insurance that reimburses you those costs not only saves you money but also stress and worry.

Providing compensation for lost or stolen items is another plus of having travel insurance. Most likely you will bring some expensive items on your trip such as jewelry, an iPhone or iPad, and money. If those items are lost or stolen, you can recover some or all of those expenses.

Coverage of healthcare costs while traveling is also pro of travel insurance for emergencies. Should you fall and hurt yourself or have a heart attack, travel insurance can provide coverage of all medical expenses during the trip that arise out of an accident or sickness. Depending on the policy, it may also cover medical evacuations, which can be costly.

Be aware that different policies will have different coverage options related to Covid-19, so be sure to pay attention to the details of the policy.

The Cons of Buying Travel Insurance

Depending on the total cost of your trip, travel insurance can be expensive. On average, the cost of travel insurance is four to 10 percent of your total trip cost.

Travel insurance prices also vary greatly depending on the policy’s level of benefits. A policy with more perks and protections is going to cost more. For instance, medical evacuation coverage comes at a premium, because the cost to get you back home after an accident or medical emergency can be substantial.

                                   
Pre-existing health conditions like diabetes, knee problems, or some other chronic conditions might not be covered. Most travel insurance plans only provide coverage for unpredictable medical expenses during a trip and don’t cover pre-existing medical problems. Plans that do might come with a hefty price tag.

Finally, there is also the potential a claim could get rejected. Be sure to read the travel insurance policy’s fine print to understand exactly what’s covered and be aware of any loopholes or exclusions.

How to Get the Most Out of Travel Insurance

One of the best travel insurance practices to follow is to really understand the policy and any exclusions it has. For example, prepaid, nonrefundable costs like airline tickets are typically covered, as are expenses that you will be billed for if you cancel your trip. Airline tickets purchased with frequent flyer miles might not be covered, though taxes and related fees could be.

Purchasing the right level of travel insurance based on the kind of trip you are taking is also important. If you are taking a short flight to another city and staying with friends or family, your out-of-pocket costs may not warrant a comprehensive travel insurance policy. But if you’re investing in a complex itinerary with many moving parts, it may give you important protections.

Alternatives to comprehensive travel insurance include

Reading the Fine Print

Though rules vary by state, most standard travel insurance policies sold in the U.S. provide reimbursement for pre-departure cancellations as well as trip interruptions for unforeseen problems that are specifically named in the policy such as a job loss, an illness, a death in the family, or a missed flight connection that leads to a missed cruise departure. Be aware that issues not specifically named in the policy may not trigger coverage. For instance, the death of a parent be considered a covered event, but the death of an aunt or non-immediate family member may not.

If your trip is canceled or cut short due to a death in the family of a close relative such a spouse or child, your relative would had to have been medically fit at the time you bought the travel insurance policy. You’ll also need a doctor’s note to get reimbursed.

Many policies have a list of exclusions that render the travel insurance void, including terrorist attacks, war, or filed claims associated with high-risk adventure sports like sky diving. If your claim results from excessive drinking or recreational drugs, you’re not covered. You’re also not covered if you travel against government advice, ignore local driving rules, or leave your belongings unattended.

Conclusion

Travel insurance is worth it if it can bring peace of mind as you make plans and invest in your dream trip. Just be sure you know what your insurance can and can’t do for you before you pack your bags.

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