Is it necessary to get travel insurance, and is it worthwhile?

If you want to secure the money you’ve set up for your trip, travel insurance makes sense. But no one can blame you for being cautious to add another expenditure to your trip budget after you’ve already paid for airline, accommodations, meals, and activities. Still, if you can’t afford to lose that money in the event of an emergency, travel insurance might be a wise purchase.

According to Squaremouth, a travel insurance comparison website, the typical insured trip costs about $5,453. The average cost of travel insurance was $252. You may be planning a lot more expensive trip than that, or you may be going on a cheap long weekend getaway. Travel insurance typically costs 5% to 6% of the total cost of your vacation.

What Does Travel Insurance Include?

Travel insurance reimburses you for travel expenses and money spent due to unexpected incidents that occur before and during your trip.

Travel insurance for trip cancellation

An unanticipated scenario, such as a tour operator going out of business, you being sick, or a family member dying, might cause you to cancel your vacation before you’ve even finished packing your sunscreen and swimwear. In these cases, travel insurance with trip cancellation coverage will compensate you for the pre-paid, non-refundable expenses of your trip.

Furthermore, if you, a family member, or a travel partner falls ill or injured while on the road, the trip cancellation aspect of the insurance will normally pay you for the unused portion of the trip. The trip cancellation benefit may also apply if you, a family member, or a travel partner dies while on the road.

Travel insurance that allows you to cancel for any reason
It is important to note that you can only file a claim for trip cancellation coverage if your reason for canceling is stated in the policy as an acceptable cause. There is an add-on called as “cancel for any reason” travel insurance that may be purchased to widen cancellation coverage.

If you cancel a trip for whatever reason, you may obtain a partial refund as long as you cancel at least 48 hours before your planned departure. For example, maybe you’ve decided to remain at home so that you can attend your high school reunion after all. CFAR coverage often adds 50% to the cost of a normal travel insurance policy. Reimbursement is typically 75% of the travel cost.

Emergency travel medical insurance

Whether you’re kayaking in Argentina or going on a safari in Zambia, a medical emergency might derail your vacation plans. It may also leave a significant hole in your finances.

Many health-care plans in the United States do not provide coverage outside of the nation. That means you must pay for your own medical treatment if you are hurt or fall unwell while traveling—and if you think this is unlikely, think again. According to Allianz, a travel insurance firm, it gets over 4,000 calls every year from clients who are having a medical emergency while on vacation.

Up to the limitations of your policy, travel medical insurance covers charges for doctor and hospital bills, ambulance service, drugs, X-rays, and lab work.

Travel insurance for medical evacuation

Consider being flown off a Swiss hillside after a hiking accident, spending a few weeks in a Colombian hospital recuperating from a heart attack, or needing a trip back home from Jamaica to cure a fractured hip.

According to Allianz, it may cost between $15,000 and $200,000 to be taken by helicopter or ambulance to a nearby health care center for treatment of an accident or sickness anywhere in the globe. This excludes the expense of the therapy itself.

Evacuation for medical reasons Travel insurance covers the cost of being brought to the nearest health care facility abroad that is able to treat you, and it may even cover the cost of someone being flown back to the United States for advanced medical treatment. A insurance may cover the repatriation, or transfer, of a traveler’s remains to the United States in addition to medical evacuation.

For example, HTH Worldwide’s TripProtector Preferred plan is one of the most generous in the business, including $500,000 in emergency medical bills and $1 million in emergency medical evacuation.

Missed connection travel insurance

Missing a connection when flying may be an expensive inconvenience. Missed connection travel insurance compensates you if you miss a flight for one of the reasons specified in the policy.

This would make up for a three, six, or twelve-hour travel delay caused by anything like a technical problem on an aircraft or a storm that prevents a cruise liner from arriving on schedule. Typically, the payout would cover the expense of catching up to a tour or cruise.

For example, TravelSafe’s Classic package offers $2,500 after three hours of missed connections.

Flight cancellation travel insurance

Flight cancellations caused by inclement weather, such as storms and blizzards, are often covered by flight insurance. However, with airline cancellations becoming increasingly regular for a number of causes and issues, it may be worthwhile to get flight cancellation travel insurance.

If the grounds for the cancellation are not covered by ordinary travel insurance, travel insurance for airline cancellations may compensate your forfeited, non-refundable trip charges.

Insurance for travel delays

Many tourists are irritated by travel delays. When a flight is delayed owing to a cause mentioned in your policy, such as severe weather or a mechanical fault, a policy with travel delay insurance may pay restaurant and lodging expenditures. The daily coverage amount is often between $150 and $200.

Trawick International’s Safe Travels Voyager plan, for example, offers travel delay coverage of $150 each day, up to $2,000 total, after five hours of delay.

The travel delay benefit may also cover the costs of catching up to a destination or returning home, or it may compensate you for unused pre-paid and non-refundable trip charges.

Insurance for luggage

A travel insurance coverage includes baggage insurance will compensate you if your luggage is lost, stolen, or damaged while traveling. Homeowners or renters insurance coverage may also cover luggage and possessions theft.

Baggage insurance also covers personal belongings, so if your bag is stolen, you may submit a claim. Be aware that baggage insurance only covers the depreciated worth of your possessions, not the cost of replacing them with new ones. Certain goods are also subject to exclusions and limitations.

Furthermore, some travel insurance policies cover luggage delays. This coverage may pay for anything you need to purchase, such as clothes and toiletries, to hold you over while you wait for your baggage. It’s worth noting that luggage delay benefits have a time limit before they kick in.

Here are some examples of luggage delay coverage provided by some of the finest travel insurance providers rated by Forbes Advisor:

After a five-hour wait, the HTH Worldwide TripProtector Preferred Plan costs $400; the John Hancock Insurance Agency Gold Plan costs $500; and the Seven Corners RoundTrip Elite Plan costs $600.
Trawick International Safe Travels Voyager plan costs $600 after a 10-hour delay; USI Affinity Travel Insurance Select Elite plan costs $500 after a five-hour delay.

Overall, travel insurance is a minor investment in comparison to the trip costs you can protect—especially when traveling is fraught with uncertainties and surprises.

What Does Travel Insurance Exclude?

Travel insurance often does not cover losses caused by factors and events beyond your control. It’s intended to protect your vacation investment if unforeseen events ruin your plans.

For example, travel cancellation benefits apply only if you cancel for reasons stated in your policy, which are unforeseeable situations beyond your control. That is, if you just decide not to travel on your vacation, you will not be able to make a conventional trip cancellation insurance claim. You’d need CFAR coverage for that.

Because all travel insurance policies contain exclusions, you should read the small print of your policy and get acquainted with what your coverage does not cover.

Medical claims exclusions, for example, often include the following:

Elective treatments Elective mental health care Participation in adventure or extreme sports Physical therapy Routine physicals and routine dental examinations Routine pregnancy
Also, unless you get travel insurance before the storm is named, most travel insurance plans would not cover your damages from a hurricane.

When Is Travel Insurance Beneficial?

In general, travel insurance is worthwhile to consider if:

Your journey expense is much more than you can afford to lose.

You are going overseas You are visiting a distant location with few close health care facilities

You are visiting a hurricane-prone nation.

You’ve arranged a lot of pre-paid, non-refundable excursions, day trips, and activities.

Your journey will include connecting flights or several locations.

You want to be paid for cancellations and medical concerns caused by Covid when traveling overseas.

You want to be compensated in part if you have to cancel your vacation or return home early for whatever reason.

When Is Travel Insurance Not Required?

If you are not putting down substantial non-refundable trip deposits or if your health plan covers you at your location, you normally do not need travel insurance.

Travel insurance, for example, may not be required if you are on a low-cost domestic trip. If you’re going on a long weekend break with friends and intend to watch a performance and go shopping, you probably won’t have many pre-paid, non-refundable charges. In addition, if you get ill or injured while traveling in the United States, your health insurance will cover any medical expenses. In such instance, travel insurance may not be necessary.

You may also not require travel insurance if your credit card perks include travel insurance. Before booking a vacation, check with your credit card issuer to see whether you have any appropriate travel coverage.

Also, some baggage insurance is secondary, which means you must first submit a claim with your airline or homes insurance. If you have secondary baggage insurance, are not packing many pricey things, and have a direct trip, you may wish to avoid baggage insurance.