Is travel insurance ever worth it?
I used to ponder this question every time I was about to book a flight, train, or hotel. Thanks to my Chase Sapphire Reserve card, I have built-in travel insurance reimbursement on any travel booked with the card. But before that lovely feature, I’d always agonize over the option to “protect my trip” in the final steps of booking.
After two years of a raging global pandemic, thousands of canceled flights, and millions of stranded passengers, the answer is: YES. Chances are, your trip is worth the insurance. But in case you need more convincing, here are five reasons why you should consider a travel insurance policy before heading out on your next adventure:
Reason 1: Vacations are Investments – Insure the Big Ones.
Let’s compare two trips:
Trip A:
You’re taking a weeklong trip with friends to a ski resort a few states over. It’s about $8,000 total, but split across four people and several expense categories.
Trip B:
You and your spouse are taking a luxury cruise around the cape of South Africa for your 10th anniversary. It’s $5,000, all-inclusive, and non-refundable.
The day before departure, you wake up sick. The PCR concludes: it’s COVID. You won’t be going anywhere, anytime soon.
So which trip would you rather have insured? Probably the second one. Although it’s the less expensive of the two, there’s rationale. For one, the money’s already spent. And past that, you have far fewer options for recourse since the sum was both nonrefundable and paid up-front.
When considering travel insurance, think about exactly how the trip is purchased. Since travel insurance works on a reimbursement basis, there’s more of an incentive to insure trips that hinge on significant nonrefundable expenses, like an overseas flight or a resort package.
Reason 2: Minor inconveniences Can Turn Into Major Expenses
A vacation isn’t just a financial investment. It’s an emotional investment, too. And when vacation begins with a canceled flight, a missed connection – the joy quickly turns to panic and rage, ruining a trip before it could even begin.
Travel insurance policies can soften the blow of these terrible but inevitable parts of traveling. They include reimbursements for lost prepaid expenses due to departure delays, cost of additional accommodation and travel expenses, and baggage delay benefits.
So, consider that hypothetical ski trip from earlier: what if a snowstorm delayed your flight by a day? Now, you’ve potentially lost a day of your lift ticket – worth up to $300 at some resorts. With a travel insurance plan, you could purchase a new ticket and submit the cost for reimbursement.
But there are other reasons to insure your trip beyond cost recovery. After all, skiing is risky. What if you got hurt? And what if you’re in the Swiss Alps, instead of the next state over?
Reason 3: Emergencies Happen
Medical emergencies overseas are enormously, devastatingly expensive. According to the U.S. State Department: “many foreign medical facilities and providers require cash payment upfront and do not accept U.S. insurance plans. Medicare does not provide coverage outside of the United States.”
It’s been a source of financial ruin for plenty of people. But travel insurance with emergency medical benefits can protect against the worst-case scenarios and expenses – covering emergency transportation, as well as medical evacuation/extraction costs for severe injury and illness. It can even pay your way through treatment, in advance, for particular covered emergency medical expenses. How’s that for peace of mind?
There are options, here. For example: if you’re spending a large portion of your year abroad – a Medigap plan would be a better option than travel insurance. But you should never travel far from home without first weighing the massive cost of a medical emergency overseas against the minuscule cost of travel insurance.
Reason 4: The Embassy Can’t Help You
Many traveling Americans have a woefully mistaken view of the U.S. embassy’s role in other countries. So much so that they assume the embassy performs almost the exact function of travel insurance, and will – at the first sign of trouble – call their local U.S. embassy for assistance they cannot provide.
They’re often disappointed by just how little the embassy staff can do for them.
Yes, an embassy can help you replace a stolen passport. Yes, you can contact friends, family, hospitals, legal counsel, and local law enforcement. But no, they cannot help you pay for any of it. Except in the case of rare, major catastrophes – it’s not a place you can stay overnight. The embassy is a glorified help desk, in your native language.
Reason 5: It’s Ridiculously, Stupidly Cheap
I know, I know. Cost is probably the reason most people don’t purchase travel insurance in the first place. And with the extra step of getting a quote, many people wonder: why bother? Especially when they’ve already spent thousands on the original vacation.
But as long as you’re looking at quality insurers with reputations for actually paying out claims, trust me: it’s worth it. I won’t go too far into detail since the price varies according to your demographic information. Still, for example: Allianz offers their OneTrip Emergency Medical plan for as low as $30 a week.
Now look me in the eye, and try to tell me that travel insurance isn’t worth the money!
It’s a simple fact. Please don’t get caught without it.
