Is Travel Insurance Worth It? Squaremouth Explains
Is Travel Insurance Worth It? Squaremouth Explains
Last Updated: February 1, 2021 November 16, 2023
The financial cost of traveling can be significant, as airfare, hotel accommodations, and other activities during the trip can compound quickly. For some travelers, the thought of adding travel insurance to an already expensive trip can seem like an unnecessary expense that pushes a trip’s cost even higher.
However, one of the best times to insure a trip is when higher prices tags are involved. Travel insurance coverage can provide travelers with a layer of financial protection before and during a trip. Squaremouth shares the various ways in which travel insurance can cover travelers when their trips take a turn for the worse.
Is Travel Insurance Worth the Cost?
Travel insurance is absolutely worth the extra cost of the policy for domestic and international travelers that want to protect their expenses heading into a trip. Travel plans can change, and purchasing a policy can provide you with peace of mind knowing you’re covered from the unexpected.
The average cost of travel insurance can range widely depending on the benefits, coverage limits, and other determining factors. On average, comprehensive travel insurance plans cost roughly $300. While this may seem high, it’s a small price to pay in comparison to high medical expenses or financial impact of flight cancellations.
Most of the single trip travel insurance policies available through Squaremouth are comprehensive, and were designed to provide coverage for the most common traveler concerns. This includes coverage for trip cancellations, medical emergencies and evacuations, travel delays, and lost or delayed luggage, in addition to other less commonly sought after benefits.
Is Travel Insurance For Everyone?
No, travel insurance is not necessarily recommended to all travelers. There are a variety of scenarios in which a traveler likely won’t need to purchase travel protection before they depart for their vacation. Examples of travelers that likely don’t need insurance include:
- Travelers with existing protection through their travel credit cards, airline, or through others means
- Travelers that don’t have any prepaid, non-refundable trip expenses
- Travelers with few trip expenses, or taking relatively inexpensive trips
- Travelers with existing medical coverage that covers them for their trips
If your budget allows, Squaremouth strongly recommends all travelers consider purchasing some form of travel protection before they depart for their trips.
Below are some common benefits included in travel insurance plans that may help you decide if the benefits outweigh the cost of travel insurance.
Travel Insurance Can Save You Money if Your Trip is Cancelled
Trip Cancellation coverage is the primary reason most travelers buy travel insurance. This benefit can reimburse 100% of your prepaid and non-refundable trip expenses if you need to cancel your trip for a reason covered by your policy. Most policies have an extensive list of covered reasons, with the most commonly asked about reasons including:
- An illness, injury, or death of you, a traveling companion, or a non-traveling family member
- Inclement weather that prevents you from traveling
- A significant delay caused by a common carrier, such as your airline
- A natural disaster at your destination
- A terrorist incident at your destination
This benefit of travel insurance is worth it for travelers who have non-refundable trip costs and are concerned they may not be able to travel. In general, a comprehensive policy with Trip Cancellation coverage will cost between 5% and 10% of your total trip cost, and can cover the entire amount you insured.
For even further flexibility, many travelers are turning to Cancel For Any Reason, or CFAR for short. This upgrade can partially reimburse you to cancel for a reason that is not otherwise covered by your policy, such as unfavorable weather. CFAR coverage can increase the cost of a policy by up to 40-50%, however many travelers find this cost worth it because of the added protection.
Travel Insurance Can Save You Money if Your Trip is Interrupted
Travel insurance also provides coverage for travelers that need to return home early if their trip is interrupted. With Trip Interruption coverage, travelers may be eligible for reimbursement for any unused travel expenses. Some travel insurance providers will also include coverage for any additional expenses incurred to return home, such as change fees or new flight bookings.
The eligibility requirements for Trip Interruption coverage are very similar to those for Trip Cancellation insurance. Common covered reasons to be eligible for interruption insurance a trip include:
- An illness, injury, or death of you, a traveling companion, or a non-traveling family member
- Inclement weather that prevents you from continuing your trip as planned
- A mandatory evacuation order in place at your destination
- A natural disaster at your destination
- A terrorist incident at your destination
Travel Medical Benefits Can Save You Thousands in Case of An Emergency
Medical emergencies can happen at any time when traveling. Since most primary health insurance plans don’t provide international coverage, many travelers purchase travel insurance to protect against the potential high costs of international medical care.
There are two main travel medical insurance benefits that are included within most policies: Emergency Medical and Medical Evacuation.
The Emergency Medical benefit can cover reasonable out-of-pocket expenses you incur if you become sick or injured while you’re traveling, including the costs of seeing a physician, hospital fees, ambulance services, and others. Squaremouth recommends at least $50,000 in Emergency Medical coverage.
The Medical Evacuation benefit is designed to arrange and cover your transportation to the nearest adequate medical facility in the event of a medical emergency. Due to the expensive nature of a emergency evacuations, Squaremouth recommends at least $100,000 in coverage.
Since pre-existing conditions are a common exclusion in standard travel insurance plans, travelers concerned with existing illnesses, injuries, or other medical conditions should consider a policy that includes the Pre-Existing Condition benefit. This benefit is typically an optional add-on.
Travel Delay Can Cover Necessary Costs if Your Trip is Delayed
Travel Delay, sometimes referred to as Trip Delay, has become an increasingly common concern for travelers. This benefit can cover the cost of meals, accommodations in the event of a significant delay.
To be eligible for Travel Delay, a traveler must meet the minimum delay period outlined in their policy details. Typically, this period will be either 3, 6, or 12 hours. The best travel insurance companies will feature low delay periods with high daily reimbursement limits.
Be sure to read your policy’s fine print to see what type of trip delay. While most travel insurance policies offer strong delay coverage, some may include exclusions for delays relating to wars, government shutdowns, and other events.
Travel insurance Can Cover Your Lost or Delayed Luggage
Issues with luggage can quickly derail a trip. Fortunately, many travel insurance plans offer protection for travelers’ personal items if their baggage is delayed, lost, stolen, or damaged during a trip.
The two most common luggage perks include Baggage and Personal Item Loss and Baggage Delay.
Baggage and Personal Item Loss can reimburse travelers if their baggage goes missing at any point during their trip. In this case, a traveler may be reimbursed the value of their belongings.
Baggage Delay, on the other hand, offers protection for travelers whose items are delayed on route to their destination. After a pre-determined delay period, typically 24 hours, travelers may be eligible to purchase toiletries, clothes, and other essential items and receive reimbursement up to a specific amount.
Is Travel Insurance Right for You?
Before purchasing travel insurance, it’s important to first determine what you need from a policy. Understanding your itinerary, risk level, concerns, and budget can help determine what type of coverage, if any, is right for you.
While the cost of travel insurance is important, it should not be the only factor you base your decision on. The recent pandemic is proof that travel plans can change overnight, and having travel protection can save you from financial loss.
The peace of mind travel insurance can provide is enough to convince many travelers to purchase a plan. Even if you’ve waited until the last minute, and your departure date is approaching, it’s still not too late to purchase travel protection.