Getting Trip Insurance (When is Flight Insurance Worth It?)

From researching attractions to viewing romantic bed and breakfasts while simultaneously dreaming up your packing list, preparing for a vacation is an exciting experience. But while you’re busy coordinating all of the fun stuff, don’t forget about the practical planning you need to do, too!

Travel insurance is one thing you might want to add to your vacation checklist, depending on your circumstances. If you’re wondering “is travel insurance worth it?” or “what does travel insurance cover?”, we’re here to help you navigate this journey.

In this post, we’ll discuss what travel insurance means, when it might make sense for you to add travel insurance and more. To skip ahead to your topic of interest, use the links below.

• What is Travel Insurance?
• What is Covered by Travel Insurance?
  • Who buys travel insurance?
• When Should You Buy Travel Insurance?
  • When you probably shouldn’t buy travel insurance
• How to Get Travel Insurance
  • Who offers travel insurance?
• Tips for Buying Travel Insurance
• Wrapping Up: Is Trip Insurance Worth it?

What is Travel Insurance?

Travel insurance is a type of insurance policy that’s designed to cover the potential fees and losses incurred while traveling domestically or abroad.

In the event that you have to cancel your trip due to an emergency or other circumstances, or if something like severe weather or locational threats interrupt your trip, travel insurance may help to minimize the associated financial penalties. Additionally, travel insurance can cover lost or stolen baggage, as well as temporary medical and injury coverage. Of course, what your trip insurance does and does not cover depends on the policy that you purchase.

Now that you know what travel insurance is, let’s take a look at what is covered by travel insurance and what is not covered by travel insurance.

What is Covered by Travel Insurance?

Just like when you’re shopping for medical, auto, or homeowner’s insurance, you typically have plenty of options to choose from when buying a travel insurance plan. And a variety of options means differing levels of insurance coverage. Four of the most common types of travel insurance include:

• Trip Cancellation/Interruption Insurance: Trip cancellation insurance can reimburse you for insured items, such as your flight accommodations, in case you had to cancel due to illness, a death in the family, or other circumstances listed in the policy that you purchased.
• Emergency Medical Assistance: If you are injured or become ill while you’re traveling, emergency medical assistance can help you get medical coverage at your travel destination.
• Baggage Insurance: If your luggage or other personal belongings are lost, stolen, or damaged while traveling, baggage insurance can provide cost assistance for the items included in your trip insurance policy.
• Accidental Death: Accidental death insurance can provide you with coverage in the event that you or a family member suffers from fatal complications due to an injury or accident that was covered within your travel insurance plan.

Depending on the trip insurance carrier and plan you select, there may be other caveats, exclusions, or additional coverage included in your policy. Always be sure to read the fine print and ask your travel insurance agent if you have any questions about the extent of your plan’s coverage.

Who buys travel insurance?

If you’re wondering whether you should buy travel insurance, it might help to take a look at who else finds value in this type of insurance coverage.

According to a recent study, 23% of people surveyed said they intend to buy more trip insurance in 2020 than they did in 2019. And of those who plan to purchase travel insurance, Gen Z’ers and Millennials are most likely to do so. In fact, 30.39% of 18-24 year-olds and 28.21% of 25-34 year-olds said that they were likely to buy travel insurance for an upcoming vacation. 45-54 year-olds, on the other hand, aren’t quite so interested in trip protection; only 12.7% said they’d buy insurance on their trip.

It’s important to note that even if you fall into one of the categories that does or does not tend to buy travel insurance, you don’t necessarily need to base your decision on data trends. In order to decide whether you should buy travel insurance, you’ll want to consider a number of factors specific to your situation. Let’s take a look.

When Should You Buy Travel Insurance?

If you subscribe to the old saying, “you’re better off safe than sorry,” you might think trip insurance is worth purchasing—especially if you’ve invested a substantial amount of money into your vacation or are exposed to risk factors that might influence your decision.

According to a survey from Travel Market Report, the top three reasons people buy travel insurance include:

• Cost of the trip
• Concerns about family’s health and welfare
• The type of trip they’re planning

If you or a family member are dealing with health issues that may impact your trip, for example, trip insurance may be worth it in case you need to cancel or reschedule.

When you probably shouldn’t buy travel insurance

Before you buy travel insurance, ConsumerReports.org suggests checking how much you’re already protected with your current insurance policies and credit card coverage plans.

• Some healthcare plans will include a certain level of health insurance for plan holders who are traveling domestically and abroad.
• Your homeowner’s and renter’s insurance plans may protect your belongings even while you’re off-site. If you’re worried about bringing your laptop or camera on vacation, check to see if your home insurance plan already includes these items.
• Certain credit card companies offer trip cancellation coverage as well as lost luggage and car rental coverage.

Consumer Reports also cites travel lawyer, Jeffery Miller’s advice on purchasing travel insurance: “The millennial going to Las Vegas doesn’t need travel insurance, but if you’re in your 40s and have elderly parents who might fall ill and cause you to cut short your holiday, then yes, you should definitely get coverage.”

Note: Before you commit to a travel insurance plan, read the plans that are offered to you. You may be surprised about what they do and do not cover, so it could be worth a quick read if you’re still unsure about it.

How to Get Travel Insurance

If you decide that travel insurance is a good investment for your situation, your next step will be to find the best plan for your needs.

Who offers travel insurance?

There are several travel insurance companies, banks, and credit cards that provide trip insurance plans for you to choose from.

Some popular travel insurance companies include:

• Amex Assurance
• Travelex
• Generali Global Assistance
• World Nomads
• Travel Guard
• Seven Corners
• Allianz Global Assistance
• RoamRight Travel Insurance

Credit card companies who offer travel insurance include:

• Visa
• MasterCard
• American Express
• Discover
• Chase

While you’re shopping for travel coverage plans, be sure to compare policies to get the best rate for your situation.

Tips for Buying Travel Insurance

To find the best travel insurance option for your plans, use these tips provided by ConsumerReports.org:

• Check your existing coverage: Does your health insurance plan cover you while you’re traveling domestically or abroad? Or perhaps your travel credit card offers coverage for lost luggage, flight insurance, or trip cancellation. Consider checking these options as you shop for trip insurance.
• Compare plans and pricing: Many companies who offer travel insurance will issue free quotes, so take advantage of this so that you can shop around for the plan that gets you the most bang for your buck.
• Know your policy limitations: Like any type of insurance plan, there are several limitations on coverage, one of which being “known events.” Once a hurricane has been named, for example, it becomes a known event that can disqualify your trip coverage. In addition, there are certain time constraints which could void coverage if you don’t cancel within a specified timeframe, or if your trip is scheduled X days after an event such as a natural disaster or terrorist attack.

Beware of CFAR plans: One travel insurance option insurers offer is known as CFAR insurance (cancel for any reason). While this may sound ideal, you might think twice about this type of plan, which can be expensive and not as valuable as it claims to be. Consumer Reports notes that the cost of CFAR plans are typically 40% higher than standard travel insurance plans and often only pay out 50-70% of trip costs upon cancellation.

Wrapping Up: Is Trip Insurance Worth it?

Like any financial decision, you’ll make in your lifetime, whether or not travel insurance is worth it depends entirely on your unique financial situation and travel plans. Perhaps you got a good deal on your flight and the cost of your insurance would cost the same as the reservation altogether. In this case, trip insurance might not be worth it.

There are many different variables you should consider when deciding whether or not travel insurance is the right solution for you, including:

• The amount you’ve invested in your trip
• How much you’re already covered with your healthcare plan, renter’s insurance, etc.
• Personal circumstances which may impact your plans, such as health or family issues which may jeopardize your vacation

If you do decide that travel insurance makes sense for your situation, be sure to read your policy carefully. The fine print may include important coverage caveats or exclusions that could put you in a tricky situation later on.

Want to learn more about managing your summer travel spending or how to approach the budgeting topic while on vacation with friends? Check out our travel resources for tips and tricks to help you plan your next adventure.