Travel Insurance: Do I Really Have To?
Don't forego travel insurance for international trips unless the risks are already covered by your existing insurance policies or you can easily absorb the costs.
There’s nothing like upcoming travel plans to make you feel like an adventurous free spirit. While it’s lovely to daydream about the Parisian cafes, South American rain forests, and African safaris that await you, it’s also important to take some time to consider whether or not you should purchase travel insurance.
Like other types of insurance, travel insurance is designed to cover you in case of emergencies. Before you blow it off as a waste of time and money, be sure to weigh the risks of what could go wrong against the cost of insurance.
To help you determine whether travel insurance is right for you, consider these frequently asked questions before booking your next getaway.
What Could Go Wrong?
Any time you consider purchasing insurance, you need to think about what risks it covers. Hopefully, your vacation is everything you dreamed of and more. But if it’s not, are you prepared to absorb the costs?
It’s no fun to think about everything that could go wrong, but traveling to an unknown place with a suitcase full of your belongings does come with some inherent risks. You or a family member could get sick right before or during the trip, leading you to cancel or cut short your travel plans. You could miss a connecting flight or experience delayed or cancelled flights, only to discover when you finally arrive that the airline has lost your luggage. A terrorist attack or weather damage at your destination could end your vacation before it ever begins. Once you arrive, you could contract an illness and have to seek emergency medical attention or even be evacuated out of the country.
Although this mental exercise is admittedly a bit depressing, any of these mishaps could cost you thousands of dollars. If you’re not prepared to absorb those costs, you’ll want to consider travel insurance.
What Is Covered, Exactly?
There are several different types of travel insurance. Comprehensive insurance includes most or all of the various types but you can often pick and choose which types of coverage you need. These may include the following.
Trip Cancellation and Interruption
If an event beyond your control causes you to cancel your trip before you leave, or cut it short once you’re already gone, this insurance will help you recoup some of your financial losses for trip expenses, such as airline tickets and nonrefundable deposits for hotels or tour groups.
Coverage varies, but averages about $1,500 per person for canceled trips and $300 - 500 per remaining days of the trip for interrupted travel.
It can be incredibly frustrating to meticulously pack a bag for a big vacation, only to find it doesn’t arrive when you do. This insurance can help cover the cost of replacing items that are lost or delayed by the airline. Coverage can range as high as $500 for lost luggage or $100 - 300 per day that your luggage is delayed.
If you get sick or injured while in a foreign country, you’ll want to make sure you can afford immediate medical attention. This insurance will either pay directly for your costs or reimburse what you spend on medical care once you return and file a claim. Many policies offer $10,00 - 50,000 of coverage.
If you find yourself seriously injured or ill, this insurance can ensure you are evacuated out of rural areas and transported to the nearest hospital. If it is medically necessary and covered by the policy, the insurer may even pay to have you airlifted back home.
Also known as crash coverage, this is essentially life insurance in case something happens while you’re on the plane (if you already have life insurance, find out why your policy may have an aviation exclusion).
Because plane crashes are so incredibly rare, this will probably be a lower priority to you than other forms of travel coverage.
Accidental Death and Dismemberment
This coverage is a life insurance policy for the length of your travels and isn’t necessary if you already have a life insurance policy in place – which you should (find out what is The Perfect Age to Get Life Insurance).
What if I Already Have Medical Insurance?
Before you go and purchase every possible travel insurance option, take the time to find out what is already covered by your existing insurance plans. If your medical insurance covers you during international travel, you may not need additional medical coverage.
There are other places where you could find yourself duplicating coverage. For example, a small percentage of credit card companies provide refunds for flights purchased on those credit cards if they are cancelled for reasons beyond your control. If your credit card provides that insurance, you may not need additional trip cancellation coverage (learn what other Insurance Perks Your Credit Card Provider Might Offer).
Additionally, some homeowners or rental insurance policies may cover valuable items packed away in lost luggage. Call your insurance agent to find out what is covered before purchasing baggage insurance.
Do I Have to Read All of the Fine Print?
It may not be as gripping as a bestselling novel, but there’s a lot of important information in the fine print that you need to know. It will tell you, for example:
- Who qualifies as a family member in the event that a loved one's death causes you to cancel your plans
- Which airlines are covered for trip cancellation
- How soon after the initial trip purchase you're required to select travel insurance
- Caps for baggage insurance coverage
- How pre-existing conditions are treated
You'll miss out on this and other essential information if you skip the fine print.
You may also discover you need supplemental insurance you didn’t expect, like when traveling to a high-risk country or participating in high-risk adventure sports.
If you’re worried you’ll miss an important detail, call an insurance agent and have them guide you through everything you need to know (consult our 5 Questions to Ask Before Choosing an Insurance Agent).
How Much Will This Cost Me?
Like with most other types of insurance, the cost of travel insurance will vary. Comprehensive travel insurance is more expensive than selecting a few options from the bunch, though there are often discounts for combining multiple types of insurance. Age can also drastically affect the price of travel insurance. A good estimate, however, is that you’ll spend 5-12% of your total trip expenses on insurance.
Compare your options online or speak with an agent to determine the most cost-efficient option. Travel agents often earn commission on travel insurance, so call a trusted insurance agent if you’re unsure how much coverage you’ll really need.
When Can I Pass on Travel Insurance?
Once you’ve considered the risks of what could go wrong, ask yourself if you’re comfortable absorbing the cost if tragedy – or simply an annoying inconvenience – strikes and you don’t have travel insurance. If you can afford the risk, you may opt out of travel insurance.
Again, consider what is covered elsewhere. If the risk is covered by your existing insurance plans, don’t waste money on duplicate coverage. If some risks are covered, but not others, opt out of unnecessary policies and select the ones that you need the most.
For example, if you’ve found airline tickets for a great deal and haven’t booked any hotels past your first night, you may decide you don’t want to pay for insurance in the case of trip cancellation or interruption. However, if you’re planning to explore a third-world country with unclean water and other health risks, you probably shouldn’t pass on the medical coverage.
You may also not see a need for travel insurance for domestic trips. If traveling within your home country, your current medical insurance will likely cover any unforeseen medical emergencies, so there’s no need for that medical coverage through travel insurance.
If you’re asking yourself, “Do I really have to get travel insurance?” consider the risks inherent to your travels and the costs associated with them. If those risks don’t cost more than you can afford – or are already covered by existing plans – you can pass on the insurance.
Otherwise, the peace of mind that travel insurance provides may be worth every penny (see 6 Things You Should Know About Travel Insurance to learn more).