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When planning a big trip, a common question that arises is whether or not to buy travel insurance, and if so, how to choose the right policy. There are many options and a wide range of possible price points. Here’s how to understand the benefits and evaluate your options to find the right travel insurance policy for you.
Who needs travel insurance?
Before you go down the rabbit hole of comparing travel insurance policies, it’s important to know whether you really need it or not. Consider buying travel insurance:
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You are traveling abroad. If your health plan offers international coverage, you may be able to skip buying a policy, but “many health plans lack robust international coverage, or impose high out-of-network deductibles for care outside the US,” Forbes reports. Check your plan and proceed accordingly.
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Parts of your trip are non-refundable. If things don’t go according to plan and you can’t get your money back, travel insurance can provide some protection. Some common non-refundable components of travel “may be a good deal by accepting that pre-paid tours, trips or other expenses (such as airfare) are non-refundable,” according to CBS News.
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You will go far. Your location also plays into the decision of whether or not to get travel insurance. Forbes adds that if you live far from any medical facilities, “medical evacuation coverage will pay you to be in an adequate facility.”
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Your trip is scheduled for certain times of the year. Consider the weather when deciding whether it makes sense to buy a policy, CBS News suggests. For example, if you’re heading to a tropical location during a hurricane, some extra precautions might be wise.
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You’ll feel more comfortable using an easy backup. Some travelers want peace of mind while away from home, knowing their travel insurance can help them in case the unexpected happens or if they’re in a pinch.
In other cases, however, travelers may be better off skipping travel insurance, NerdWallet said. This includes if your airline tickets are already flexible or if all parts of your trip are refundable or cancelable.
Some credit cards automatically offer travel insurance when you purchase the card associated with your trip. “So, for example, if you have trip cancellation insurance on a card, you’re covered when you book a flight using that card. It’s the same for checking your bag and activating lost baggage protection,” Francis Hodall, president of Loyalty and Loyalty engagement with MasterCard, told CNBC.
What does travel insurance cover?
If you decide you need travel insurance, it’s important to be clear about what travel insurance does and doesn’t cover. There are general travel insurance policies that offer bundled benefits, and then there are separate travel insurance policies that cover specific parts of your trip.
That said, “policies generally provide coverage for three things: the protection of your financial expenses, the protection of your safety and the protection of your personal assets,” reports CNBC. Look for the following coverage areas when sorting through the options.
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Travel cancellation, delay and interruption
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Medical expenses and emergency evacuation
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Loss of baggage
Other benefits may include 24-hour assistance services, “cancellation for any reason” coverage, accidental death and bodily injury, and car rental collision insurance.
What is usually not covered?
What’s covered can vary from policy to policy, which is why it’s so important to read the fine print to fully understand how your particular policy protects you. In general, however, here are some common situations where travel insurance will not be issued:
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Protection from a predetermined storm or weather event
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Activities performed while under the influence of alcohol or drugs
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Extreme sports like scuba diving or rock climbing
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Pregnancy including medical expenses that may occur while traveling during pregnancy
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Medical expenses for election procedures
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Fear of travel
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Lost or stolen money
How much does travel insurance cost?
By A Forbes consultantTravel Insurance Cost Analysis On average, travel insurance accounts for about 6 percent of the cost of your trip.
However, the cost of travel insurance can “vary a lot depending on the coverage you get and how expensive your trip is,” CNBC said. So if you need a lot of coverage in different areas and plan a long and expensive trip with pre-planned and non-refundable expenses, you will generally pay more for travel insurance.
Higher health care costs at your destination, existing health conditions and age can all raise the price of travel insurance, Nerdwallet said.
How to find the right policy
Once you have a general idea of what to expect from travel insurance in terms of coverage and costs, you need to know what you want out of your policy and how much you’re willing to spend.
Start by assessing your financial risks and whether you can afford those costs on your own, says NerdWallet. Also see what coverage you may have from a travel credit card, your homeowner’s insurance policy, or your health plan. You may be covered in some areas, which can help you avoid doubling up.
It’s also important to shop around instead of just going with the first offer you see. You can use a travel insurance comparison site to shop around and compare benefits and prices.
Take the time to read the fine print rather than going ahead on price alone. “You may find that the lowest-cost policy is more restrictive and that paying a little more will get you the coverage you want,” Nerdwallet said. “Or you may find that the cheapest, most basic policy fits the bill.”
Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as managing editor of investing and savings content at LendingTree, editor at Smart Asset and staff writer of the week.
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