Is Travel Insurance Worth It?
July 23, 2013
Traveling the country and seeing different cultures is a great thing â€“ but there are significant costs involved. You don’t mind to spend the money assuming your trip goes well, but what happens when something goes wrong?
Travel insurance can step in during difficult circumstances while you are traveling to help make things right or to protect you. But tacking on extra costs to your trip might mean you have to scale back elsewhere. Is travel insurance worth the cost?
How to Determine If You Should Buy Travel Insurance for Your Trip
Travel insurance can be invaluable if you need it and an unfortunate sunk cost if you don’t use it. Here are four things to consider before buying a travel insurance policy.
1. What Does Travel Insurance Cover?
Before you buy a travel insurance policy you need to understand what exactly it covers just like any other type of insurance you might purchase.
Unfortunately, no two travel policies are the same. Each policy has certain restrictions as to what is and isn’t covered, so reading the details and fine print are paramount before you purchase.
Some policies cover you during a natural disaster and provide assistance in evacuating you. Others can get you emergency medical care or an extremely expensive medical flight home. Smaller policies might reimburse you for lost luggage or let you come home early with a partial refund due to a death in the family.
2. What Type of Travel Insurance Do I Need?
Before you can select a policy you also need to understand what types of coverage you might need.
Is this a quick trip with a low dollar cost and low likelihood of being canceled? If so, even if it got canceled at the last minute it might be worthwhile to skip the cost of the insurance since the odds are stacked that you won’t cancel it.
Do you have a family member in poor health that you might need to get back to quickly? Or are you at risk of becoming injured or ill while on the trip? Travel insurance might be a worthy investment.
Travel insurance is all about peace of mind â€“ whatever incident you are worried about would need to be covered by the travel insurance policy.
3. How Much Does Travel Insurance Cost?
There is no hard and fast number because the policy will change based on:
- the cost of your trip and
- the cost of extra coverage you select (medical evacuation, and so on).
However, a general rule of thumb would put travel insurance at 5% to 10% of the total cost of your trip per person. If you are looking at a $2,000 trip to the Caribbean you could pay $100 to $200 in travel insurance based on the type of policy you select.
4. Do You Have Other Coverage Options?
One last thing to consider with trip insurance is whether or not you have other coverage options available to you at lower cost or at no cost at all.
For example, if you are worried about lost luggage or delayed flights your travel rewards credit card might provide you some protection. If you are worried about medical issues while traveling overseas your regular health insurance policy might have coverage for you.
You need to understand the full spectrum of coverages available to you whether it is a travel insurance policy, a policy you already hold that can cover you while traveling, or a simple perk of using a rewards travel credit card.
Have you purchased travel insurance? Have you had to use it?
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