I’ve read many posts about travel insurance, most of them sponsored by an insurance company. Most of the time I find myself nodding along; of course it sounds like a good idea. However, when I find myself buying plane tickets online, and they try to tack on the extra cost at the end, I get miffed and skip it (I’m a notorious cheapskate). Is travel insurance worth it?
I want this post to turn into a conversation and a collection of perspectives. Please leave your thoughts, experiences, and advice in the comments!
Last December My husband and I had to cancel a trip because we needed to care for our dog who’d just had emergency surgery. Cancelling the flight went smoothly and the money was credited to future flights—except that when we rebooked we had to pay a $125 per person fee. Not cool! For us (two people) a $350 trip just turned into a $600 trip. Is it worth paying the rebooking fee to “recover” the money lost by cancelling the fight? I guess that is to be decided by each person in their own situation.
A little math: If I bought travel insurance every time I didn’t end up needing it, for the past two years, I would have spent approximately $175 (7 flights at $25 each). By skipping the insurance, I broke even when I finally needed to rebook and pay the change fee. If I’d continued my good luck streak, I would have come out ahead. Due to this calculation, I’m still on the fence as to answering the question: Is travel insurance worth it?
I consulted my go-to on all financial matters, my dad. He recently booked a tour through Europe and opted in to insurance, which cost about 10% of his total trip. He pointed out that some countries require you to have evidence of international health insurance before arrival. I didn’t know this! He mentioned that he doesn’t usually add it for a domestic trip, but does for international voyages.
With “cancel for any reason” insurance, you can cancel your trip and get your money back. Of course, you could also select the refundable ticket at a higher cost. But who wants to check the box for the more expensive ticket when the cheaper one is sitting right there? This is my default, and it’s what got me into the situation I described above. I’m certainly not in financial ruin as a result: I will have to skip a couple new outfits or going out to eat to balance out the budget, but overall, paying the change fee is mostly just annoying.
Health reasons: Here’s the one that doesn’t always come to mind. Let’s say you are taking a camel trek in the Sahara desert but forgot to hydrate. You are overcome with heat stroke and need to be rushed to a foreign hospital. I would wager that your US health insurance card doesn’t go very far at the local clinic. This is the kind of real financial hardship your trip insurance can protect against.
Cost. The added cost for something you probably won’t need is the big con. If you are on a shoestring budget and you are 99.9% sure your trip won’t change, the price of the insurance could cover a couple meals or admission to an attraction you really want to check out. This is generally my default setting unless I’m taking a very expensive (overseas) trip or if the insurance is super cheap (when I went to Mexico, for example, the trip insurance was $5).
If you book using a major credit card, especially an airline card, some types of travel coverage is already included. Check the fine print before you rely on this, but you might be surprised to know that they can go to bat for you. If this gives you enough peace of mind, you may want to skip the add-on.