Travel Insurance: Is It Really Worth It?

Should you get travel insurance before taking off on your next adventure?

Planning a vacation can be exciting. But there's one important thing that many people forget in the excitement of planning a dream trip: buying travel insurance. It can be easy to think of travel insurance as an unnecessary expense, but it is actually a smart and cost-effective way to protect yourself from any unexpected losses. Let's take a look at what travel insurance is and how it can save you money when things don't go as planned.

What is travel insurance?

Travel insurance is a type of insurance policy specifically designed for people who want to be covered against a variety of potential risks associated with traveling. It typically covers medical expenses, trip cancellations, lost or stolen luggage, flight delays, and other unexpected events while you are away from home.

What does travel insurance cover?

The coverage provided by travel insurance policies varies depending on the provider. Generally speaking, most policies will cover:

• Medical expenses, including emergency evacuation and repatriation if needed
• Trip cancellation/interruption due to illness or injury
• Lost or stolen luggage
• Flight delays
• Accidental death or dismemberment.

For example, trip cancellation insurance protects you from any financial losses, should an illness or other unforeseen event cause you to cancel your trip before it even begins. These policies also provide reimbursement for nonrefundable deposits and other prepaid costs if your plans change unexpectedly due to events like natural disasters. Some policies may also include supplemental medical insurance and liability protection in case you are sued during your travels.

Where you can buy travel insurance

There are various ways you can get travel insurance, depending on your needs. Here are some of the most common options.

Credit cards

Some travel rewards credit cards provide coverage for certain types of trips and activities if you used that card to pay for them. Check with your credit card company to find out what type of coverage it offers. For example, the Chase Sapphire Preferred® Card offers travel insurance as a free perk. This includes trip cancellation/interruption coverage, trip delays, travel accident coverage, and lost luggage reimbursement.

Airlines

Most airlines offer their own policies for travelers who purchase their tickets through them. This type of coverage typically covers medical expenses, flight cancellations or delays, lost or damaged baggage, and other unexpected costs or losses related to air travel.

Third-party insurance

These policies are purchased through independent providers and cover more than just flights. Coverage may include medical evacuations, trip cancellation protection, car rental damage waiver protection, lost luggage reimbursement, and more. You can purchase a policy that covers you per trip or an annual protection policy that includes multiple trips.

Should you get travel insurance?

Travel insurance can provide peace of mind when you are planning a trip, since it will help protect you from the financial costs of any unexpected events that could occur. Travel insurance typically costs anywhere from 4% to 8% of the trip's costs. So for a $3,000 trip, basic coverage can start at $120 and comprehensive coverage can cost $240.

If you're taking a short and inexpensive trip, then you may not need it. Travel insurance is like auto insurance in that it is "use or lose." Some policies may not reimburse prepaid expenses such as hotel stays or car rentals. There also may be exclusions for certain activities such as extreme sports or rock climbing.

On the plus side, if an emergency occurs or your plans are interrupted by unforeseen events, having insurance can help cover some (or all) of your expenses. If your plans involve expensive activities, then having travel insurance can also help protect you financially if something goes wrong.

Additionally, if you plan on traveling overseas, then purchasing travel insurance can also help protect you from any potential medical expenses that could arise while abroad. Global travel halted during the early days of COVID-19, so those with travel insurance would have been able to recover much of their costs due to pandemic shutdowns. Keep in mind that if you join a tour group or book a travel package through a travel company, you may be required to purchase coverage.

All in all, purchasing travel insurance may be a smart decision for any traveler looking for peace of mind. While it does come with some extra costs, if your trip involves overseas travel or expensive activities, having an appropriate level of protection can save money and time should anything unexpected happen. Even if nothing goes wrong during your time away from home, the peace of mind is invaluable! So do some research into different types of travel insurance before booking your next flight.