Is Travel Insurance Worth the Cost?

As spring break approaches and you peruse your options for travel both within the United States and abroad, you’re bound to be faced with a decision: do I accept the added cost of a travel insurance package? Whether you’re booking from a travel website or simply wondering whether to add cancellation protection onto a flight, here’s what you need to know.

Travel insurance can work in two ways. 

First, if you experience a personal disaster or injury while traveling, it can help you get reimbursed for changes in flights, canceled lodging, or medical care abroad. Second, if you find yourself wanting to cancel your trip altogether before your departure, it can help you secure a refund in full.

The issue with travel insurance, for some, is the difficulty you may have utilizing it when you actually need to redeem the benefits. 

Travel writer Jeffery Morrison details in FORBES his experience after a broken leg in Vina Del Mar, Chile. He had to cancel hostels and hotels, cancel two flights, see a Chilean physician, and reschedule his flight home. Was he able to get most of the costs covered by his travel insurance plan? Yes! But it took hours (and hours) of phone calls, emails, and scanning receipts. And he had to prove, with paperwork, that he purchased something that went unused, it actually went unused, and it wasn’t yet reimbursed. Morrison’s conclusion? It’s possible that the general “travel issues” coverage a premium credit card can offer you will be less of a hassle than separate travel insurance.

However, it’s probably worth the cost…

If you’re traveling internationally or are planning your trip far, far in advance.

International travel tends to be booked up to a year in advance. That certainly leaves room for surprises in schedules, family dynamics, and general health. Traveling abroad is also significantly more expensive than traveling locally, so it makes sense to tack an extra fee onto your trip for cancellation protection. Plus, as Morrison experienced, if you’re faced with an emergency overseas, you may find the amount of compensation you need is worth the time required to receive it.

If there’s an illness in the family.

If you know someone you love dearly back home has the potential to take a turn for the worse, you’ll enjoy vacation prep knowing you’ve secured a Plan B. But be careful about language in the policy about pre-existing conditions. You’ll want to talk to your insurance provider about whether that means filing a claim could be denied if it’s a medical complication related to your own pre-existing medical conditions or a family member’s back home. When considering your own well-being, Travel Insurance Review reports that adding pre-existing coverage can come in handy when you find yourself surprised that symptoms you were experiencing during the insurance company’s “look back period” dating 60 to 180 days before the policy went into effect. That means if you saw a physician for heartburn a month before your trip and need to cancel your vacation because it evolved into something worse, you may not be able to file a claim unless you’ve added pre-existing condition coverage.

If you couldn’t bounce back from a flight cancellation.

If an airline offers you insurance for a flight, it’s going to be fairly redundant with the rights you already have as a passenger. When an airline cancels your flight, you’re automatically eligible for a seat on the next flight headed where you need to go. Time sensitivity is the only time this may not play out in your favor, like if you need to catch a cruise departure. In that case, look into a way to guarantee you can re-book a canceled flight on any airline or secure reimbursement for having to find a way to meet up with your cruise ship at its next port of call.