Is Travel Insurance Really Worth it?

by | Mar 25, 2020

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In 2018, global tourism hit a record high as 1.4 billion people not only went on vacation but spent their time off in a different country. Those numbers stayed strong in 2019, but 2020 will be different.

Even a few months ago, if you missed a flight you could get a new one – probably in a few hours. Things like travel insurance or credit card perks were luxuries, not necessities. But if you’ve tried to go anywhere since February 2020, and you didn’t have travel insurance, you likely came to regret it.

Is travel insurance worth it? The answer is yes, not just in 2020 but in the past, too. Here’s what you need to know before you book your next trip.

What is Travel Insurance?

Travel insurance is an insurance product that provides protection to you when you take a trip. It can be used domestically or internationally. Though, there are some destinations insurers won’t cover, such as turbulent states.

Essentially, when something happens outside your control, you can rely on travel insurance to cover your back. You might use it when:

  • Your flight is canceled
  • You get sick abroad
  • You lose your passport or wallet
  • You get robbed

If you suffer a financial loss, your travel insurance kicks in and covers it on your behalf. A good travel insurance company may even arrange travel on your behalf, such as in the case of an emergency evacuation or if you need specialized medical care.

What Does Travel Insurance Cover?

All insurers offer different types and amounts of coverage. Some are more comprehensive than others, but generally, any good policy on the market should provide you coverage for:

  • Medical emergencies
  • Trip interruption
  • Trip cancellation
  • Lost luggage (or damaged or stolen)
  • Hotel protection
  • Cruise protection
  • Supplier bankruptcy

It can also cover you in extreme circumstances, such as in the case of accidental death or dismemberment. Accidental death coverage sounds grim, but it can be a huge benefit to your surviving family members.

There will be stipulations to what travel insurance does and doesn’t cover. For example, trip cancellation coverage only applies when you have to cancel because you become sick or injured or in the event of the death of either you or a traveling companion. Insurance won’t cover your decision not to travel because you don’t want to go or you can’t afford it anymore.

Additionally, you might need special policies if you intend to do things like partaking in extreme sports.  If you get injured doing an extreme sport and don’t have the appropriate coverage, your insurer may deny your claim, and you may need to both arrange and pay for your own medical evacuation and medical bills.

When Do You Need to Buy Travel Insurance?

You need to buy travel insurance before you depart on your trip (i.e., before your plane takes off). Very few insurers will cover you once you leave for the airport. Even if they do, you’re going to miss out on certain benefits and you’ll pay a significant premium for booking late.

Do you need to buy insurance when you make the booking? No, but if you’re going to purchase coverage, it’s a good idea. Getting coverage early not only provides peace of mind but also keeps the price down and it ensures you won’t miss out on critical features.

Do you travel frequently? You might consider skipping the single trip policy and choose an annual policy. Annual insurance coverage policies cover you for a full calendar year from the date of purchase, which means you’re always covered even when you make last-minute plans.

Single trip insurance policies only cover you during the dates you travel.

Where Can You Buy Travel Insurance?

Most major insurance companies provide travel insurance cover as a separate product, so if you like your auto or health insurance provider, check there first. You might find they offer a bundle that saves you money.

Alternatively, you can buy travel insurance from a broker, either online or in your community.

You may also find a travel insurance company who deals exclusively in travel-related products.

What’s most important is that you find a policy that suits both your trip cost and your travel needs, including your destination and activities.

Do You Need Travel Insurance if You Have a Credit Card

Visa, Mastercard, and American Express credit cards all offer travel insurance products. If you have a premium card, it may even come standard. Each card provider may offer different options, so you’ll need to read your cardmember agreement to learn what’s really offered.

Does credit card coverage serve as a replacement for travel insurance?

It can, but you should be mindful of three things that often appear in the fine print.

First, you need to know your credit card policy inside and out and make sure it applies to your trips. Keep in mind that the only parts of your travel covered are those you book on that card. So if you book your flight on your credit card and your hotel on a different card, then your hotel isn’t covered.

Second, if you’re shopping for a premium travel credit card, like the Chase Sapphire, consider the annual fee. Most premium cards with the best benefits have an annual fee that’s substantially higher than even gold-standard annual travel insurance.

Third, you may need extra insurance if you’re going somewhere or doing something uncovered by your card. For example, very few credit cards provide rental car coverage in the Republic of Ireland. So, you might need additional coverage anyway.

Is Travel Insurance Worth It?

Many people wonder whether buying a travel insurance policy is necessary. After all, millions of people complete trips every year without needing to call their insurance companies. However, you never know when you might need it, and what’s more, when things go wrong or there’s an event of an emergency, you need to be prepared for them to go very, very wrong.

Is travel insurance worth it? The simple answer is that if you can afford a trip, then you can also afford travel insurance. While buying travel insurance is not the most glamorous part of travel planning, it does protect you from financial ruin. It’s better to have an insurance plan and not need it then need it and not have it.

For more helpful tips and for ways you can lower your bills, visit our website learn how to save today.

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