Is It Really Worth Buying Travel Insurance?

Is it Really Worth Buying Travel Insurance?

Traveling always looks like fun…except when you’re planning it. There are a million and one things to do – packing, getting someone to water your plants and feed your dog, choosing the right flight plans, booking hotels, etc.

Then there’s the question of travel insurance. Do you really need it?

While traveling can be a pleasant and memorable experience, things can and sometimes do go wrong. Tsunamis, earthquakes, canceled or missed flights, getting mugged, injuries, political unrest, food poisoning, sudden illness, etc. are just a small list of terribly (and not so terribly) unpleasant things that could happen on your trip.

Although it’s highly unlikely that your planned journey could end up in tragedy, it’s always better that you take necessary precautions. Despite your best efforts and staying up all night reading dozens of listicles dealing with how to prevent common travel woes, when something actually goes wrong in the end, travel insurance will help you back on your feet in no time.

Let’s take an in-depth look at the pros and cons of travel insurance. So you’ll be better equipped to decide whether or not to purchase one on your next trip.

What is Travel Insurance?

Travel insurance is insurance that is meant to cover possible costs and losses that occur while traveling. It offers handy protection against trip cancellation, medical expenses, lost luggage, accidents and other losses for people traveling domestically or internationally.

Coverage could also include 24/7 emergency services such as cash wire assistance, replacing lost passports, and rebooking canceled flights. Some policies even offer protection for costs that can be refunded through other means.

Companies that sell travel packages and tickets usually offer travel insurance to their customers. Travel insurance can be taken out for a single trip or a multi-trip policy which covers an unlimited number of trips in a set period.

My Personal Experience

I’ve traveled out of the country about twice a year on average in the past fifteen years and all these times, I always use my AMEX Platinum card to pay for my trips. One of the reasons was the travel protection benefits they offer. For years, I always thought that all travel insurance is created equal and carries the same benefits. I was wrong!

About three years ago, I was looking at the AMEX summary of benefits and realized that they only offer basic coverage to AMEX cardholders.

As soon as I found out about the AMEX coverage, I made the decision to purchase travel insurance every time I travel overseas.

Long story short, I was able to use the travel insurance benefits when I hurt my back about two years ago and had to undergo surgery. The surgeon advised me not to take long travels after my surgery so I ended up re-scheduling my trip.

The entire process was simple:

  • Filed a claim with AON (insurance provider)
  • They acknowledged my receipt of the claim via email
  • They requested receipts and flight itinerary documents
  • Got paid about two months later

Types of Travel Insurance

Several types of travel insurance exist. But here, we’ll look at the more common options available to travelers which they can buy singularly or as part of a package.

Emergency Medical Care

As you know, medical care can be costly. More worrisome is the fact that if you fall ill or get injured while abroad, your health insurance may not cover the costs of treatment and medication (confirm from your insurers before traveling). While you should contact the local embassy in the case of an emergency to assist you in locating the right medical facilities, the state department will not help to pay your medical bills.

You may see yourself as being in prime health. But what if you get food poisoning in Japan while stuffing your face full of contaminated sushi? Or sprain your neck while staring up at the ancient cathedrals in Europe? These scenarios are not as uncommon as you’d like to think and your health is undoubtedly worth every investment in insurance.

Having emergency medical insurance in place gives you peace of mind knowing that you can get assistance with your medical bills which otherwise could wreck your finances.

Lost or Delayed Luggage

Top of the list of every traveler’s nightmare is the disruption caused by delayed or outright missing baggage. When this unfortunate incident happens, luggage insurance ensures you’ll get reimbursed for all the money you spent buying replacement clothing, toiletries, and medication. You can, therefore, return the flip-flops and oversized pants you borrowed from good Samaritans early enough.

is travel insurance worth it

Accidental Death

Just like life insurance, accidental death insurance pays out benefits to designated beneficiaries in the event of death caused by accident. It’s unimaginable and downright discomforting to think any such tragic event will happen on a trip. But unfortunately, the unexpected does happen sometimes.

Trip Cancellation or Interruption

A lot of factors can cause your trip to be delayed or canceled. It could be the sudden onset of a hurricane in your intended destination or a lively rebellion against the government of the day or an emergency back at home.

Trip cancellation or interruption insurance will compensate you the cost of your travel expenses if your trip is canceled. It also covers the value of your return ticket home if you’re already abroad and your trip is interrupted for whatever reason. However, make sure to go through the fine print of the policy before making a purchase to know what is covered or not, and what steps to take to file a claim when your trip is canceled.

When to Get Travel Insurance

While concluding your travel plans, you should consider your itinerary and the dynamics of your trip and decide if it’s worth buying travel insurance or not.

You should definitely get travel insurance if:

  • Your destination is fraught with political instability and civil unrest. It’s a great idea to get travel insurance. But make sure to read the fine print to ensure your insurance covers war and civil disturbances. Even if the area is calm at the moment, a lot of things could change from the time you booked the flight and when you finally arrive at your destination. Your reserved accommodation may be canceled, or movements restricted in the area where you are. You might even require a non-medical evacuation to spring you to safety if the situation badly deteriorates. Always carry out an online search for travel advisory from the State Department concerning your destination.
  • Your itinerary has many flights and stopovers. Like a machine with so many moving parts, the more complicated your flight plans are, the more likely it is for something to go awry. A straight forward nonstop international flight to a remote destination has lower risks than a European tour with 13 destinations.
  • You are worried. If you are unable to relax on your trip because your mind is on the thousands of things that could go wrong, then you should get travel insurance. It would be pointless taking time off from the stress of work and a long commute to go on a holiday and have the entire trip overshadowed by worry.

Taking out travel insurance will ease your mind and let you enjoy yourself.

When Not to Get Travel Insurance

While we are for adequate protection against the vicissitudes of life at all times, there are trips where you can skip travel insurance altogether and use the money for something else:

  • When your credit card already comes with travel insurance.  Some credit card companies offer some sort of travel insurance. Do find out from your credit card provider if they provide travel insurance as a standard benefit and what is covered. You may then consider skipping travel insurance entirely if what is offered by your credit card company is adequate. And while you’re at, also, ask them to add a travel alert to your account.
  • When your insurance policy doesn’t match your risks. Travel insurance policies are not all the same and what is suitable for John headed to Rome may fail to provide the kind of cover you need while planning to vacation in Hawaii. Again, let’s say you only travel with carry-on bags, then travel insurance that only covers lost luggage would be about as useful as an ashtray on a motorbike.
  • When you embark on short trips. You should skip travel insurance when going to visit your little brother in a neighboring state. For obvious reasons – the distance is short, and the trip would cost about the same as a night out with the boys. The only exception is if you’re traveling to a location that could be affected by a hurricane or other predictable event of nature within the duration of your planned visit. Just make sure the policy covers natural disasters.

Is Travel Insurance Worth It?

Travel insurance gives you the reassuring comfort that you will get all your money back if say, your child suddenly develops a toothache and you can’t make the trip, you lose all your luggage (including the lovely Indian shawl you bought for your mother) or any other way your travel plans could fall apart. But then again, travel insurance comes at a cost.

A hefty one at that, which might be a little bit uncomfortable for a wallet already strained by the expenses of a long journey.

So do you cross your fingers and hope your trip stays smoother than a baby’s butt and skip taking out travel insurance? Or should you make travel insurance a necessary item in your travel plans checklist?

Where to Buy Travel Insurance

It’s easy to be overwhelmed by choices when shopping for the right travel insurance for your next trip or vacation.

I usually book my flights through Expedia and buy travel insurance right on their site, although you can buy travel insurance from almost anywhere these days. Tour and cruise companies, travel insurance companies, insurance comparison sites, a travel agency, and even airlines are some of the places you can find travel insurance to buy.

The main problem is that there are a lot of options and they all tend to be similar.

So how do you know the best one to buy?

The type of travel insurance you choose will depend on factors such as your destination. The best way to go about finding the right travel insurance for your needs is to know what your top concerns are. Then make sure the one you decide upon comprehensively covers all your concerns. Take the time to research different insurance companies and make comparisons.

Conclusion

Is travel insurance worth it? Yes, because shit happens. Buying travel insurance is the least fun part of your pre-departure travel plans, but it is surely worth it. But only if the nature of your trip necessitates insurance.

While on a trip or vacation, no one likes to think of twisting their ankle on a sidewalk in Paris or losing their Louis Vuitton bag, but these risks do exist. Without good travel insurance, an unexpected event could mess up your trip and possibly damage your finances for a very long time.

BA in Accountancy, he entered the entrepreneurial world by starting his first online marketing business in 2004. He is passionate about personal finance, self-development, the stock market, and a digital marketing addict. He strongly believes that financial knowledge combined with self-discipline is the key to achieving financial freedom.  He is also an avid golfer and a 15 handicapper.

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