Should You Buy Travel Insurance For Your Trip?

You have booked your long-awaited trip.  You have been saving up for this trip for months, and now everything is set.  One question remains:  Do you need travel insurance?

Most parts of your travel including flight tickets and hotels are non-refundable.  What happens if you are unable to make the trip for some reason?  This is where travel insurance comes in.  You don’t need travel insurance for every trip but it can come in handy on some expensive trips.

What is travel insurance?

As the name implies, travel insurance protects you in case something goes wrong with your travel plans such as an illness that causes you to cancel the trip, lost luggage and doctor visits and ambulance rides during travel.

The last thing you would want to happen to you is to book an expensive vacation (these purchases are mostly non-refundable) and watch your money disappear because you had to deal with an unexpected event.

There are several types of travel insurance.  You have the option to get comprehensive travel insurance or only the options you need.

  • Trip Cancellation, Interruption, and Delay – pays you if an airline or tour operator goes out of business or you have to cancel a trip for reasons covered by the policy such as an illness or death in the family
  • Baggage And Personal belongings – provides reimbursement if baggage and personal belongings are lost or delayed for a certain amount of time
  • Medical Assistance and Evacuation – provides coverage if you get injured or need medical attention on a trip.  It may not cover pre-existing conditions, so check your policy.
    • Your own medical insurance (such as one through your employer) may provide coverage.  Coverage varies from plan to plan, and you may need to pay everything and request reimbursement when you return from your trip.  Coinsurance, deductibles, and other policy requirements still apply
    • Medicare does not provide coverage outside the US

How much does it cost?

Travel insurance usually costs between 5 and 10% of the cost of the trip.  If you are quoted a policy that is less than 5% of the total cost, take the time to review the policy to ensure that it has adequate coverage.  Cheap policies are cheap for a reason, and have dozens of exclusions and provide very limited coverage.

The cost of travel insurance is also affected by the age of travelers.  Since older people are likely to need medical help while traveling, the cost of insurance is higher for older travelers.

Here’s some good news about travel insurance. Unlike car insurance, your claim history has no impact on prices, neither does your medical history.  If you have a pre-existing medical condition, however, travel insurance may or may not cover it.  Review the policy before buying it if you have a pre-existing condition.

Unless you are traveling some remote or high-risk destinations, the cost of insurance does not vary based on where you are going.  In other words, going to Shanghai or Cape Town makes no difference when it comes to the cost of travel insurance.

When do you need travel insurance?

Here are some situations when you should consider travel insurance.

  • If you are taking an expensive international trip that costs over $5000
  • Your travel itinerary is complex with multiple stops
  • You are on Medicare and intend to travel overseas.  Medicare  typically does not provide coverage outside the United States
  • Travel abroad.  Medical expenses can be very high in many places and need upfront payment before any service is provided.

When you do you NOT need travel insurance?

  • A domestic trip
  • A simple inexpensive trip
  • You intend to stay with friends and family.  In this case, travel insurance will not provide much in terms of coverage
  • Your credit card provides some type of travel insurance.  If you buy travel insurance, you are buying redundant coverage.  Understand that credit cards don’t provide all the coverage that travel insurance provides.

How soon should you buy travel insurance after booking a trip?

Buying early can save you money.  The best time to buy travel insurance is within 15 days of booking your trip.

Many insurance providers allow you to buy travel insurance until the day before you leave for the trip but it won’t be cheap and the last-minute policy may have some exclusions.

Where to buy travel insurance?

Websites like will help you search and compare quotes from multiple insurance companies.

Insurance brokers will also be able to get you quotes from multiple providers.



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