The Pros and Cons of Travel Insurance (2024)

Whether you’re traveling to faraway destinations or just across the country, travel insurance can safeguard your journey against many unfortunate scenarios. It can also be expensive, difficult to file claims, and not always cover the things you thought it would — or should.

In this article, we’ll describe the pros and cons of travel insurance, along with what a travel insurance policy covers — and doesn’t cover. We’ll also provide a rough estimate of how much to budget for travel insurance costs, and where to find the best deals for every type of journey.

What is Travel Insurance?

Travel insurance is a type of policy that covers an individual while traveling domestically or internationally. These short-term insurance policies were designed to safeguard your journey against flight delays, lost luggage, the unfortunate mishap, or a serious medical emergency. All scenarios where travel insurance could save the day — or the entire trip.

Why Should I Purchase Travel Insurance?

The number one reason to purchase travel insurance is to ensure you won’t lose your money over a trip cancellation. Many travel carriers, cruise lines, and tour operators offer nominal reimbursem*nts for last-minute cancellations – making it important to read the fine print.

Moreover, many foreign countries are increasingly requiring visitors to carry a travel insurance policy before entering. A travel insurance policy can also reimburse your costs if you have to cancel your trip for any of the covered reasons detailed in your policy. Again, read the fine print.

Lastly, before purchasing a travel insurance policy, check with your credit card company. Many travel rewards cards cover some, or all of the cost of travel cancellations or disruptions, lost luggage, and other issues that may occur. This leads us to…

What Does Travel Insurance Cover?

Most travel insurance policies will cover trip interruptions, lost, stolen, or damaged luggage – some may even cover damages to your rental car. Here’s a general list of what coverage your policy might provide:

  • Airline cancellation*
  • Baggage loss or delay
  • Emergency evacuation
  • Hijacking
  • Lost passport services
  • Medical costs & evacuations
  • Missed connections/departures
  • Personal accident or injury
  • Prescription eyeglass replacement
  • Trip cancellation
  • Trip changes

📌 *As Covid-19 continues to disrupt air travel, be sure to understand whether Covid-related cancellations by airlines, consolidators, or travel bundlers are covered in your policy.

What Doesn’t Travel Insurance Cover?

A travel insurance policy won’t cover some activities or circ*mstances, including the following:

  • Dental treatments
  • Injuries incurred from participation in extreme activities that involve the risk of serious injury or death
  • Injuries incurred from participation in a professional sporting event
  • Injuries incurred from learning how to fly a plane
  • Medical-related travel expenses
  • Pregnancy-related treatment
  • Pre-existing conditions

How Much Does Travel Insurance Cost?

Travel insurance policy costs vary widely, but a general rule of thumb is to budget 4-10% of the value of your trip. For example, if you’ve invested $5K into your vacation, your travel insurance policy might add an extra $250-$500 to the overall cost of the trip, depending on the level of coverage.

Additional factors affecting the cost of travel insurance include the number and age of travelers, points of departure and destination, length of stay, and type of coverage requested. Any pre-existing medical conditions must be divulged and may or may not be covered, or only at an additional cost.

How Does Travel Insurance Work?

Should something unfortunate happen during your trip like an injury, illness, a severe weather event, or an individual is required to return to work, a travel insurance policy can reimburse the remaining cost of the trip, as well as cover medical expenses (up to the limit of the policy) for the insured.

How Do I File a Travel Insurance Claim?

Filing a claim is similar to filing a vehicle damage or home insurance claim. Should you experience any event that results in trip cancellation (or curtailment), you’ll need documentation to support your claim, e.g. hospital receipts, airline confirmation of cancellation, or employer verification, to expedite your claim reimbursem*nt.

📌 Pro tip: Be sure to print out your travel insurance documents and carry them with your passport or other identification papers. They contain important contact information for domestic and international travelers.

Pros of Purchasing Travel Insurance

The top reason for purchasing travel insurance is simply peace of mind. However, beyond resting easy, a travel insurance policy ensures you won’t lose the entire cost of a long-planned vacation or any other travel plans.

Here are some other good reasons to purchase travel insurance for your next adventure. Depending on your policy, travel insurance will:

  • Compensate for trip cancellations or interruptions, in most circ*mstances
  • Compensate for lost, stolen, or damaged luggage (including computers and cameras)
  • Cover medical expenses (see any pre-existing condition clauses that may apply to you)

The Pros and Cons of Travel Insurance (1)

Think of travel insurance more as an investment. You worked hard, saved, and planned for a well-deserved vacation. Should a catastrophic weather event occur at your destination, and your travel plans are dashed, a travel insurance policy ensures you won’t lose your entire investment.

Cons of Purchasing Travel Insurance

While many of us are traveling on a shoestring, most see the added expense of travel insurance as its biggest barrier. There are other reasons besides the expense not to purchase a travel insurance policy — your claim may not be accepted, and there's lots of loopholes.

Included in the list of what your travel insurance policy does not cover, are injuries due to participation in extreme activities. Some insurance companies consider breaking an ankle while walking as an "extreme activity."

The Pros and Cons of Travel Insurance (2)

Be sure to choose a policy that will cover your lifestyle or activities. If you’re traveling for a bicycle touring holiday make sure your policy will cover the cost of medical treatments, or evacuation, in the event of a serious accident.

Do I Need Travel Insurance?

Travel insurance is meant to provide some peace of mind. And, although not a necessity, at least for domestic travel, unfortunate mishaps can not only ruin your trip but cost you more money in the long run.

Keep in mind, all insurance policies come with specific terms, conditions, exclusions, and benefits. Reading the fine print BEFORE purchasing your policy will help you to understand what’s covered in your policy should you need to use it — and the high probability of recouping some, if not all — of your travel costs investment.

Where Can I Purchase Travel Insurance?

There are numerous reputable online travel insurance companies and bundlers. Services like AARDY take the guesswork out of the search by offering side-by-side comparisons of top-rated travel insurance policies.

Need a Passport or Passport Renewal?

Traveling abroad? With months-long waits — and recent fee increases, don’t let an out-of-date passport derail your travel plans. Skip’s door-to-door passport renewal service takes the hassle out of renewing your passport, without leaving the house. We can even speed up the wait time when you request expedited service.

Keep apprised of the latest Covid travel restrictions around the world. Download the Skip app for convenience on the go.

How Else Can Skip Help? Whether you need assistance navigating funding for your small business — like SBA loans, grants, or other financing options, or guidance with government-related services — like TSA PreCheck or DMV appointments, we’re ready to help. Become a member and skip the red tape.

The Pros and Cons of Travel Insurance (2024)


The Pros and Cons of Travel Insurance? ›

Travel insurance can be useful, but it's not always necessary. The key to knowing if you need travel insurance is figuring out your specific risks for any given vacation, then deciding if you can buy coverage that adequately protects you from any financial losses and pitfalls that might occur.

Is it worth adding travel insurance? ›

Travel insurance can be useful, but it's not always necessary. The key to knowing if you need travel insurance is figuring out your specific risks for any given vacation, then deciding if you can buy coverage that adequately protects you from any financial losses and pitfalls that might occur.

What is the benefit of travel insurance? ›

Travel insurance is coverage designed to protect against risks and financial losses that could happen while traveling. The risks range from minor inconveniences such as missed airline connections and delayed luggage all the way to more serious issues including injuries or major illness.

What is not covered in travel insurance? ›

Reasonably foreseeable events. Known storms, epidemics, acts of war. Travel restrictions imposed by government authorities. Pre-existing conditions, unless the Premium plan is bought within the window for coverage.

Do travel insurance companies actually pay out? ›

Travel insurance compensates you for money you lose due to unforeseen events before and during your trip. Just as importantly, it can pay for emergency medical care and evacuation during your trip.

Is it OK to not have travel insurance? ›

Trip cancellation coverage may be unnecessary if you're not on the hook for nonrefundable expenses or if your credit card provides cancellation benefits as a perk. Emergency medical coverage is not always necessary if you are traveling domestically and your health insurance covers you while you're away from home.

How much should travel insurance cost? ›

The average cost of travel insurance is about 3% to 5% of a trip's total value, according to quotes gathered by our research team across different travel insurance providers for various traveler profiles.

What is the best travel insurance company? ›

The Best International Travel Insurance Providers in Detail
  • Faye. Our Top Pick. ...
  • Travelex. Our pick for families. ...
  • Nationwide Travel Insurance. Our pick for most coverage reimbursed. ...
  • Tin Leg. Our pick for customizable coverage. ...
  • Berkshire Hathaway Travel Protection. ...
  • Seven Corners Travel Insurance. ...
  • AIG Travel Guard.

When should I buy travel insurance? ›

In general, you can buy coverage any time before the date of your trip. That said, it's always best to buy coverage as soon as you make your reservations. The sooner you buy travel insurance, the sooner you'll be protected and the more benefits you may be eligible to receive.

Does travel insurance cover cancelled flights? ›

Cancellation cover is a common inclusion with most standard travel insurance policies, but you can take it out separately if it doesn't offer enough cover. Alternatively, if you only want cancellation cover to protect you against cancelled flights rather than baggage protection, you can get it for that.

Is Allianz travel insurance good? ›

We at the MarketWatch Guides team awarded Allianz Travel Insurance 4.1 out of 5 stars based on our provider review methodology. Named our pick for concierge services, Allianz offers 24/7 travel assistance through a multilingual team, which can help policyholders with travel and coverage issues while abroad.

Does travel insurance cover doctor visits? ›

Medical expenses and emergency evacuation

If you travel within the U.S., your health insurance should cover any illness or injury you sustain. If you're traveling abroad, though, your plan may provide little or no coverage. The right travel insurance should cover doctors' fees and hospital bills, Durazo said.

Does AARP offer international travel insurance? ›

While there are no AARP travel insurance products or discounts available for seniors, members can use the AARP website for trips and tricks on how to plan for international travel and information regarding how to choose the right insurance plan for older travelers.

Do credit cards come with travel insurance? ›

While it would be ideal if all credit cards provided travel insurance benefits, this simply isn't the case. Travel rewards credit cards often offer insurance, though coverage limits and types of protections vary by card. You'll generally see the highest levels of coverage with high-annual-fee travel credit cards.

What is the most common travel insurance claim? ›

By far, the most common and often most significant travel insurance claim is for medical emergencies. A sudden illness or injury during your trip can not only ruin your plans but also cause a severe financial strain.

What to look for in travel insurance? ›

What cover should travel insurance include?
  • medical expenses and cover for getting you home if you're injured or fall ill abroad.
  • personal injury and cover for accidents or damage caused by you.
  • cover for lost or damaged items.
  • cover for lost or delayed baggage.
  • cover for cancellation or missed departure.

Does travel insurance get more expensive closer to the trip? ›

Unlike other aspects of your travel experience like airfares or hotel-room rates, the price of travel insurance doesn't increase the closer you get to your travel date. There's no financial penalty if you wait to buy travel insurance (except for those bonus coverages, of course).

Is it better to buy travel insurance early or late? ›

In general, you can buy coverage any time before the date of your trip. That said, it's always best to buy coverage as soon as you make your reservations. The sooner you buy travel insurance, the sooner you'll be protected and the more benefits you may be eligible to receive.

Should I buy travel insurance before or after flights? ›

When is the best time to buy travel protection? We suggest you buy a travel protection plan when you make your first trip payment, like airfare or a cruise. That way you maximize your coverage period in case you need to cancel your trip.

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