By Subhasree Nag
Is travel insurance worth it? – Travel insurance is the right choice when you travel to a new place. Although every traveler does not face unforeseen circumstances, nature is unpredictable. With travel insurance, you can ensure you get the money back that you lose when you face difficult situations.
In this article, you will learn about travel insurance and how it works. Moreover, you will learn what travel insurance covers. Apart from that, this article also explains the benefits of travel insurance. Additionally, you will learn how to buy travel insurance as well as cost analysis. Hence, to learn more, read on to the end of the article.
What Is Travel Insurance?
Travel insurance provides coverage for unforeseen trip emergencies. For example, it is helpful in situations like trip cancellation, losing your luggage, getting hurt, or even getting sick before you travel. Apart from that, many unpredictable events can have a big impact on your trip.
Once you understand the potential costs and benefits of travel, you can decide whether to purchase travel insurance or not. Basically, you have to understand the financial risks you are in when you travel.
Is Travel Insurance Worth It?
The following are the major reasons why travel insurance is worthwhile:
1. To Protect Your Non-Refundable Trip Costs
If you lose money for the flight tickets, rentals, accommodations, and activities, travel insurance covers that. On the other hand, if you must cancel your trip or go home early, try to get travel insurance that includes trip cancellation and trip interruption. Hence, if there is a trip cancellation or interruption, the protection will cover your reservations.
For instance, if you are traveling to a destination with weather issues, with your travel insurance, you will get protection for non-cancelable reservations. On the other hand, some policies provide emergency evacuation for dangerous situations.
2. To Protect the Cost of Your Lost Luggage
Suppose you go on a trip, and you find your checked luggage is lost. In such cases, if your travel insurance covers lost baggage, you will get reimbursement for your essentials. Hence, you will be able to purchase them since you do not have your own things with you.
Apart from that, the insurance will also reimburse you for your misplaced bag but only up to a certain amount. However, if you are traveling with a carry-on, there is no need for such types of coverage for your luggage.
3. To Cover Health Issues
Generally, health insurance policies in the US offer coverage anywhere you travel within the US. However, if you travel internationally and you get sick and hurt, policies like Medicare will not cover your health.
Moreover, even if your health insurance policies offer you coverage outside the country, doctors in those countries might not accept it. Hence, it is essential to get travel insurance.
Furthermore, if you do not have travel insurance, you might have to pay your bills from your pocket. Then, you might have to seek reimbursement from your healthcare provider.
Situations Where Travel Insurance Is Beneficial
The following are the major situations where travel insurance can be beneficial for you:
- Medical Emergencies: One of the most important things when you are traveling is your medical expenses. Here, travel insurance can help you cover medical expenses. This includes doctor’s fees and hospital bills. Moreover, it also helps in coordinating care and finding a standard medical facility.
- Trip Cancellations: If you have to cancel your trip or if there is an interruption, travel insurance will help you with coverage. For instance, you need travel insurance for situations like bad weather, medical emergencies, or a strike.
- Lost/Stolen Luggage: If there is lost/stolen luggage, your travel insurance will help you with the cost of replacement.
- Loss of Passport: Moreover, with travel insurance, you also get coverage if you somehow lose your passport.
- Personal Liability: There are situations where you might end up accidentally damaging someone else’s property. In this case, travel insurance covers the cost of the damage.
- Vacation Rental Damage: Some travel insurance plans also help you cover the costs of damage done to a vacation rental.
- Home Security: One of the downsides of traveling is that your house’s security is compromised. Here, some travel insurance will help you cover those costs in case of damage when you are away.
Cost Analysis of Travel Insurance
Generally, the cost of travel insurance is between 4-10% of the overall price of your trip. However, the cost of the insurance can vary depending on these factors:
- If a travel insurance plan has higher limits and more optional coverage, it will cost more.
- If a plan offers CFAR benefits, it will cost more (up to 40%).
- Generally, older travelers pay more since there is a higher likelihood of filing an insurance claim.
Before you choose travel insurance, make sure to read the policy documents carefully before you spend your money.
How to Buy Travel Insurance?
Nerdwallet recommends, “If you booked your trip through a travel agent, you can likely purchase coverage through them. That includes online travel booking engines like Expedia.”
If you are on a cruise travel, you will get the chance to purchase travel insurance overage during the booking process. On the other hand, if you are taking air travel, the airline company will offer you certain types of coverage when you book a flight through your website.
Some of the major companies to buy travel insurance from are Travel Guard, Alliance, and AXA.
Alternatives to Travel Insurance
One of the major alternatives to travel insurance is to choose the right credit card for travel. In such cases, you will get built-in travel protection from the financier.
For instance, card providers like American Express Gold Card, Chase Sapphire Preferred Card, Southwest Rapid Rewards Plus Credit Card, etc., come with trip cancellation options. Also, they will give you protection from trip delays.
However, you have to keep in mind that the coverage from the card might not be as robust as you get from a travel insurance policy.
For instance, many cards offer trip delay protection as well as cancellation protection. Moreover, they also offer lost baggage insurance and car rental insurance. However, only a few cards will cover medical treatment, travel accidents, emergency evacuation, etc.
Hence, you must do deep research on your travel benefits from credit cards before you make any purchase decisions for your trip.
Common Misconceptions About Travel Insurance
The following are some of the myths of travel insurance:
- “You do not need travel insurance. Nothing will happen.” : Unforeseen events can happen in time. Here, travel insurance acts as your safety net and protects you from sudden medical emergencies.
- “I already have a health insurance policy. So, I do not need travel insurance.”: Generally, health insurance policies do not extend internationally. This is because there are judicial limitations.
- “Travel insurance policies are expensive.” Basically, the cost of travel insurance depends on a variety of factors. These include trip duration, coverage, destination, and more. However, when you compare it to potential financial losses that happen due to trip cancellations, lost luggage, etc., the insurance cost seems reasonable.
Get Your Travel Insurance Now
Is travel insurance worth it? You can see that it is worthwhile to have the protection of travel insurance. This is especially important when you are traveling internationally. This is because your health insurance might not work in another country. Here, travel insurance will cover your medical coverage, luggage loss, injury, and more.
Do you have more suggestions on how to choose travel insurance? Please share your ideas and opinions in the comments section below.
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