What to Consider When Buying Travel Insurance
Planning a trip is exciting, but unexpected disruptions such as sudden illness, flight cancellations, or lost baggage can make your dream vacation costly. So, if you’re wondering, do I need travel insurance? Let’s see if we can help you determine the answer.
Whether you face a sudden illness, flight cancellations, or lost baggage, travel insurance can provide a safety net. But with so many options available, how do you choose the right policy?
This guide breaks down the key factors to consider when buying travel insurance, including coverage types, costs, and where and when to purchase the best plan for your needs.
Why Buy Travel Insurance?
Travel insurance protects you from financial losses if unexpected events occur before or during your trip. Oftentimes, plans are comprehensive and include protection for cancellations, baggage issues, and more. Still, sometimes you only need medical coverage or evacuation protection, so we recommend evaluating your trip and needs and then exploring the benefits you need. Depending on the policy, it can cover:
- Trip cancellations or interruptions
- Emergency medical expenses
- Lost, damaged, or delayed baggage
- Flight delays and missed connections
- Rental car damage
Even if your existing health insurance or credit card offers some travel benefits, these plans often provide limited coverage abroad. That’s why a dedicated travel insurance policy can be a wise investment.
Breaking Down Key Travel Insurance Benefits
To maximize value and protection, consider these coverage options:
- Trip Cancellation or Interruption – Reimburses prepaid, non-refundable trip costs if you need to cancel or cut your trip short for a covered reason (e.g., illness, injury, death of a family member, or severe weather). This is one of the most common and valuable types of travel insurance.
- Travel Medical Insurance covers medical expenses if you become ill or injured while traveling. It is handy for international trips, where domestic health insurance may not apply. Many plans include coverage for hospital stays, ambulance services, and emergency medical evacuation.
- Baggage & Personal Belongings – Reimburse lost, stolen, or damaged luggage and valuables.
- Travel Delay & Missed Connections: This covers additional expenses such as meals, accommodations, and rebooking fees if your flight or other transportation is significantly delayed. It is helpful for long-haul and international travelers who may be stranded overnight due to flight disruptions.
- Cancel For Any Reason (CFAR) – An optional upgrade that allows you to cancel your trip for any reason (not just those covered under standard trip cancellation policies). Typically reimburses up to 50-75% of your trip cost but must be purchased within a specific timeframe after booking.
- Rental Car Coverage – Pays for repairs if your rental car is damaged or stolen. It can be a cost-effective alternative to purchasing insurance directly from the rental company.
How Much Does Travel Insurance Cost?
The cost of travel insurance varies based on several factors, including:
- Trip Cost – Plans typically cost 5% to 10% of your prepaid, non-refundable trip expenses.
- Traveler Age – Older travelers often pay higher premiums due to increased medical risks.
- Destination – More risks or adventures can increase the cost. Also, if you’re headed to an area experiencing a war or dealing with other geopolitical issues, the insurance rate would increase.
- Trip Length – Longer trips or visits to remote locations may increase costs.
- Coverage Limits & Add-Ons – Comprehensive plans and upgrades like CFAR will cost more.
For example, a $5,000 trip could cost anywhere from $200 to $500 for a standard travel insurance policy. Comparing plans can help you find the best coverage for your budget. And if you need to file a claim, here are some tips to help you maximize your potential refund.
When Should You Buy Travel Insurance?
Timing matters when purchasing travel insurance. While you can buy a policy until the day before departure, the best time to secure coverage is immediately after booking your trip.
Buying early allows you to access benefits like pre-existing condition waivers, which can provide coverage for existing health conditions that may affect your trip. This is a valuable feature that can protect you from unexpected medical expenses. Cancel for Any Reason (CFAR) coverage and protect from unexpected disruptions.
Here are the best times to buy:
- Immediately After Booking: The sooner you buy travel insurance, the sooner you’re protected from trip cancellation risks.
- Within 14-21 Days of Initial Payment: Many policies offer additional benefits, such as CFAR eligibility and waivers for pre-existing conditions, if purchased within this window.
- Before Your Departure Date: While some policies allow last-minute purchases, buying early ensures access to the best coverage options.
How to Buy Travel Insurance
Travel insurance is designed to act as a financial safety net when you’re away from home, protecting you from hefty out-of-pocket expenses that arise from situations outside of your control. However, finding a cost-effective policy can be challenging with many available options.
To find the right plan, follow these steps:
- Assess Your Trip Risks: Consider your destination, planned activities, and existing insurance coverage. Comprehensive coverage is often worth it if you’re traveling abroad or taking an expensive trip.
- Empower yourself by comparing plans and providers. Use online travel insurance marketplaces to find the best coverage options. This process gives you the control to make an informed decision that best suits your needs.
- Read the Fine Print: Before purchasing, it’s crucial to understand policy limits, exclusions, and claim requirements. This step ensures you’re fully informed and prepared for any situation that may arise during your trip.
- Check for Existing Coverage: Some credit cards and health insurance plans offer limited travel benefits.
Bottom Line: Is Travel Insurance Worth It?
Travel insurance is a wise decision if your trip is expensive, international, or non-refundable. It provides financial protection, security, and peace of mind against the unexpected.
Before you buy, compare plans, read the details carefully, and choose a provider that aligns with your needs. With the right coverage, you can travel confidently, knowing you’re protected. Travel insurance is a valuable investment that can make your trip worry-free.