The accommodations are booked. The flights are secured. The itinerary is planned to perfection. You’re just about ready to embark on your dream vacation.
Stay connected with the best Travel eSIM
Naturally, orchestrating a grand adventure comes at a cost—and chances are, you spent a pretty penny bringing your plans to fruition. You now have a choice: do you add the additional expense of travel insurance? Or do you go without it, potentially putting your entire investment at risk?
Ultimately, is travel insurance worth it?
In short, “better safe than sorry” is the adage we adhere to. Travel insurance gives you priceless peace of mind while protecting your assets in the event that something goes wrong before or during your trip.
But before you decide to buy or put your wallet away, let’s talk about what you can expect from a travel insurance plan, what it can and can’t cover, different coverage options, and whether or not you should spend the money on it.
What to Know About Travel Insurance
Travel insurance works like auto or homeowner’s insurance in many ways. In its simplest form, you pay for a policy, and the insurance company will issue a payout to cover any approved claims—rather than a car accident or basement flood, these claims would be related to lost baggage, missed flights, or healthcare abroad (depending on your chosen plan).
You can opt for a travel insurance policy or plan that covers different scenarios depending on your biggest concerns for the trip. For example, if you’re flying into an area known for storms, you may want travel insurance that would cover a weather-related trip cancellation.
Cost of Travel Insurance
Generally speaking, more expensive policies equate to higher, better coverage. You can typically expect to pay between $35 and $400+ for travel insurance, with the average traveler paying around $221. For 100% cancellation coverage, you can expect to spend roughly 5% to 6% of your trip’s total cost.1
Your plan’s cost may change based on:
- The price of the trip
- Where you’re going
- How many people are traveling (families tend to pay a bit more)
- Your age (younger travelers often have less expensive policies due to better health)
Depending on your credit card company, you may already have credit card travel insurance benefits that provide a baseline of travel protection. However, purchasing supplemental annual travel insurance might be necessary for more extensive coverage, including from medical insurance and flight insurance.
Take a look and see what travel insurance companies offer which types of coverage, and where you can secure the best prices. Make sure you pay attention to maximum coverage amounts, the full list of what’s covered, and any deductibles. These can all affect the total value of your policy, and help tell the full story beyond the upfront price.
Types of Travel Insurance
Travel insurance policies aren’t created equal. When trying to answer the question, is travel insurance worth it? you need to pay attention to what each company offers. Here are some of the most common covered expenses.2
Trip Cancellation Insurance
This is covered in almost every policy available. Essentially, if your trip is canceled for reasons covered in your policy, the insurance company will reimburse all travel expenses. However, each covered reason can change from plan to plan.
Often, they’ll include:
- The unexpected injury or illness of a person or their traveling companion
- The death or hospitalization of a non-traveling family member
- Common carrier or weather issues
- Natural disasters at home or at the travel destination
- Legal obligations like serving as a witness in a criminal trial or jury duty summons
Additionally, policies will often cover a travel delay or trip interruption, ensuring you’re compensated for an unexpected trip cost or inconvenience associated with delays or changes in your itinerary.
Always double-check your plan’s unique coverage before making any decisions, especially if your trip is at particularly high risk of any of the above.
Travel and a Major Medical Emergency
If you get sick or injured on your trip, travel medical insurance would provide short-term medical coverage, medical care, and can pay for medical expenses or a stay at the closest adequate medical facility.
Emergency Medical Evacuation
If you need medical transportation like air evacuation or an ambulance, this will cover the cost. It’s a particularly coveted trip insurance clause if you’re going to a rural area that doesn’t have easy local access to medical facilities.
Accidental Death and Dismemberment
This provides coverage to your beneficiaries, in the event of a catastrophic accident. You may also receive a payout if you lose a foot, hand, limb, or your eyesight from an incident while traveling.
Note that some plans have death and dismemberment clauses that only cover the possibility of an airplane crash or accident, rather than covering risks during the entire trip.
Cancellation for Any Reason (CFAR) Policies
These policies are often more expensive and usually only cover a percentage of your losses, but they let you cancel your trip and receive reimbursement for any reason, not just the ones specified by the company. It’s usually an add-on option in addition to other forms of cancellation coverage, providing flexibility and assurance that you can recoup a portion of your trip cost regardless of the reason for cancellation..
Loss, Damage or Delay of Baggage
The more you travel, the more likely you are to run into a travel delay where your luggage is lost or damaged in transport. Beyond the serious inconvenience, you’ll also have to think about:
- Clothing and toiletries that you’ll need to replace ASAP
- Important electronics like charging cables or SIM cards
- Irreplaceable items like gifts, cards, or keepsakes
While some things can never be replaced, travel insurance will at least give you the money you need to repurchase your essentials and new luggage. As an additional layer of protection, Maya Mobile eSIMs cards allow you to skip the hassle of replacing a physical SIM card and simply download one directly to your device.
In the event that there’s a delay before your suitcase arrives, you’ll still receive some amount of financial reimbursement, since you’ll likely need to buy new clothing and toiletries while awaiting your lost luggage. However, this type of insurance offers a smaller payout, which may be related to how many hours or days your baggage is delayed. Usually, insurance for baggage loss and delay comes bundled together.
What Doesn’t Travel Insurance Cover?
As with any other type of insurance, there are certain situations that your travel insurance won’t cover, including3:
- Change of mind – Without Cancellation for Any Reason coverage, deciding to skip your trip won’t result in reimbursement.
- Fear of flying – Likewise, being unable to board a flight out of fear doesn’t qualify you for insurance payouts.
- Foreseeable reasons – This can include issues like traveling at the height of a declared pandemic or inclement weather that you knew about before traveling.
- Certain last-minute changes – If something changes at the last second that makes you decide not to go—such as a tour changing its itinerary—insurance won’t help. Even CFAR travel insurance policies are typically only valid up until 48 hours before a trip, so very last-minute non-essential decisions to cancel aren’t covered.
- Natural disasters predating the purchase of travel insurance – If a natural disaster like a hurricane or volcanic eruption happens before you buy travel insurance, it’s too late to insure that trip. To avoid this, always buy your insurance as soon as your tickets are booked.
- Certain types of bad weather – Only severe weather disturbances are eligible for insurance payouts. If, for example, you end up with rainy weather during your beach vacation, this isn’t enough to cancel and receive reimbursement.
- Pre-existing medical conditions – Having a pre-existing medical condition exclusion waiver is crucial for anyone traveling with health concerns. This means you can be reimbursed for lab work, medicine, hospital trips, X-rays, and more if your condition flares up while you’re on vacation. Without one, you’ll have to pay for a medical expense out of pocket.
- Elective procedures – If you’re traveling for a non-essential procedure, such as plastic surgery for aesthetic reasons, insurance likely won’t cover you.
- Adventure or extreme activities – If you plan on skydiving, bungee jumping, mountain climbing, or participating in any other potentially dangerous activity, chances are insurance won’t cover any accidents.
- Certain forms of medical care – This includes mental health care, physical therapy, routine pregnancy, routine physicals, and routine dental exams.
In short, expect that you’ll only receive payouts in the event of unforeseen emergencies.
If you think you might want to cancel your trip due to any non-covered reasons, then having CFAR insurance may help. You can also opt for Interruption for Any Reason (IFAR) insurance, in which case the insurance company would reimburse a portion of expenses if you end your trip early.
Is Travel Insurance Worth It For You?
The bottom line is that just about any traveler can benefit from travel insurance to some degree, but that doesn’t mean it’s required. Some people are fine with a little risk, while some people benefit from purchasing trip protection much more than others.4
When you’re thinking about buying travel insurance, start by asking yourself these questions:
- Is there a high chance that you’ll be impacted by surprise events or severe weather?
- Do you have the money to invest in insurance?
- Can you afford to lose the money you invested into the trip already?
- Do you or a loved one currently have health issues?
- Will you be better able to enjoy your trip with the peace of mind insurance brings?
Short trips close to home don’t typically need travel insurance. If you’re going abroad, vacationing for a longer period of time, or can’t afford to cancel and rebook your trip, travel insurance is well worth the cost.
A 5% Charge for Your Peace of Mind
So, is travel insurance worth it? Yes, but the decision ultimately lies in your hands. If you do a little digging, you’ll likely be able to find a travel insurance plan that meets your needs and fits your travel budget. Just make sure that you read all of the fine print before making your purchase.
If you’re looking for another way to ensure your peace of mind abroad, purchase a prepaid phone plan or unlimited eSIM card for the area you’re visiting. Understanding how to use your phone internationally can save you from unexpected data roaming charges when you’re just looking to stay connected. Whether you end up needing to make a claim with your travel insurance company or simply want to stay connected while on the go, an eSIM makes it all easy.
With a few extra expenses, you can enjoy your trip without worrying about the unpredictable twists and turns that life can take.
Sources:
- Market Watch Guides. Average Cost of Travel Insurance for 2024. https://www.marketwatch.com/guides/insurance-services/travel-insurance-cost/
- DISB. Taking a Trip? Information About Travel Insurance You Should Know Before You Hit The Road. https://disb.dc.gov/page/taking-trip-information-about-travel-insurance-you-should-know-you-hit-road
- Forbes. What Travel Insurance Does Not Cover. https://www.forbes.com/advisor/travel-insurance/will-never-cover-this/
- Forbes. Is Travel Insurance Worth It? https://www.forbes.com/advisor/travel-insurance/should-you-buy-travel-insurance/
