Monday, March 04, 2024
For men, women, and teens

How to decide if travel insurance is worth it

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Written by Vera C. Last updated on .

young woman with luggage at airport - is travel insurance worth it

Travel insurance, also known as trip insurance, can be extremely helpful if something goes wrong on your trip. On the other hand, its cost might make you stop and wonder whether you need travel insurance.

A good rule of thumb is that for any international travel, you should get travel insurance. However, your final decision (and its consequences - good or bad!) is up to you.

Disclaimer: I am not an insurance professional, nor am I a travel agent. However, I have traveled over the years and wound up on 2 different instances having to make travel insurance claims. Therefore, I have personal experience with the unexpected happening on an international trip, and this is what my advice is based on. You should seek professional advice from an insurance agent or attorney if you have questions about a travel insurance quote, particularly if you're trying to understand coverage and/or compare plans.

The cost of travel insurance does add up, but compared to the cost of your trip, the cost of your travel insurance is likely to be low. Therefore, I do not recommend making your decision based on cost (or certainly not on cost alone).

Instead, your decision should be based on

  1. How much risk you are willing to take on
  2. How easily are you able to change your travel plans and/or navigate a health system or police system (in case of theft) when in a foreign country - particularly if you're not a native speaker of that language

You should still get travel insurance for Europe or other places where you'll be in a generally safe area. What if you suffer an accident somewhere that you're not a native speaker of the language? Even without a language barrier, would you be comfortable handling every last arrangement yourself in a foreign country if an accident or injury means you need to return home?

How much does travel insurance cost?

Trip insurance depends on multiple factors, so you might be pleasantly surprised that it could cost lower than you might think. Typical costs are based on:

  • Your age (the younger you are, the cheaper it is)
  • The total cost of your flights or cruise package
  • What country or countries you're traveling to
  • The total length of time you'll be away (the shorter it is, the cheaper it will be)

So for example if you're a young adult traveling to a generally safe country with a relatively affordable medical system and your trip is for 10 days, your trip insurance is going to be relatively cheap.

On the other hand, if you're elderly and traveling to an unsafe or medically expensive country and you'll be away for 2 months, your insurance is going to be a lot more expensive.

I recommend getting travel insurance from a reputable provider that isn't your airline or cruise line - in other words, not your airline or cruise line's built-in trip insurance (although that's better than nothing). The airline or cruise line's insurance typically doesn't cover as much, and reimbursements to flight or cruise date changes may come in the form of credits for future use instead of monetary coverage. This is why you want to shop with a trusted independent travel insurer.

The best time to buy your insurance is right after you purchase your flights or cruise package, ideally up to 24 hours after. This is because many insurance policies offer a slightly better level of coverage for trip cancellation for those who purchase insurance right away - you're seen as a less of a cancellation risk than those who buy it a longer time after the fact. None the less, it's still worth getting travel insurance even if you've passed the 24 hour period since you still reap all the rewards of the regular level of coverage.

The hidden reasons that travel insurance is worth it

Most people think about trip insurance purely from a financial point of view, i.e. whether they can afford to handle any losses or added expenses financially on their own. This is of course something to think about, but ability to recoup losses should not be the only basis for your decision.

For example, one fallacy people come up with is "If my luggage is permanently lost I can afford to replace my belongings, so I don't need travel insurance." Meep! Travel insurance isn't solely about financial costs, it's actually even more about convenience and peace of mind.

Here are the hidden reasons why to get travel insurance that most people don't consider.

1. If you need to navigate a country's healthcare system

Suppose you suffer a fractured leg during your international trip (this happened to me!) You're at the hospital. Even if you are a native speaker of the language, it's hard to understand what the process is and what's going on. If you can't speak the local language, as was the case with my trip, you'll have trouble at the very first step - you'll struggle to explain what happened. Yes, that's the case even in places where they speak English as a second language: I discovered that medical staff can be reluctant to speak English with you if it's not their first language, simply because they don't want to accidentally get any medical details wrong.

If you call your travel insurance as you head to the hospital, or while you're in the waiting room, they will usually help you right away with non-financial things such as providing translation services by voice call and giving you general advice for that country's healthcare system. Services vary between plans and companies, so check if your plan offers this. Usually, even if your travel insurance company can't help you at that exact second, you can expect that they might give you a call while you're still at the hospital once they can get hold of someone to help you over the phone. You'll still have to submit your claim formally later on, but you'll be glad of at-the-moment advice and translation for such calamities.

Do not assume that a country with socialized medicine will give you medical treatment for free. In most of those countries, that is only for citizens and permanent residents. You still need travel insurance if you're not a citizen or permanent resident of a country with socialized medicine - otherwise you'll be expected to foot your hospital or doctor's bill yourself there. A few of those countries (but not all!) make exceptions for accidents but don't rely on this being the case. Don't make the mistake of thinking you'll get treated for free in a country with socialized medicine.

Any existing medical insurance you already have in your home country (whether private or government-sponsored) will typically not cover you while you're overseas. This is why you really need travel insurance.

2. Some countries require you to have travel insurance as an entry requirement or need it as proof that you won't be a burden to the country

Even if you qualify as a visa waiver visitor to a country, that country may still require all visitors to have travel insurance as an entry requirement. This is often buried somewhere in regulations that you don't even see until the last minute - and it may be too late to buy travel insurance then!

Even countries who don't require you to have travel insurance may prefer you to have it as part of a burden of proof that you are expected to show when boarding your international flight that you won't be a drain on the country's resources. In some situations, proof of a return ticket may be all that's needed, but you don't want to find out the hard way at the airport that you're 1 document short of the required level of proof.

This is a case where you do need travel insurance.

3. Let the insurance's concierge service call up the airport every day if you have delayed or missing luggage

This happened to me - one of our pieces of luggage was delayed by what turned out to be a week(!) Upon arrival, I did the correct thing and reported my missing luggage to the airport baggage department before leaving the airport. They gave me a paper printout with a reference number and a phone number to call. They recommended calling each day to get its status until I was re-united with my luggage. Yikes! Imagine you're on your vacation but every day before heading out sightseeing you need to call an automated system to check on your luggage status. Your vacation starts feeling miserable!

After 2 days without luggage, I called my travel insurance company to let them know and to inform them I might have to fill out a claim for delayed luggage. According to the plan I had bought, if luggage is delayed more than a certain amount of time (48 hours), I was covered for reimbursement of reasonable costs replacing urgently needed items to tide me over (some changes of clothing, etc). To my happy surprise and relief, the travel insurance representative told me not to worry about calling the airport any more, they would do that for me, and to just go off, sightsee, and enjoy. Of course, they're not just being generous here - it's in the insurance company's interests to do whatever they can to get the luggage returned to me. This is because if it's lost forever I'd wind up needing to put in a bigger claim (to replace everything, not just tide over until it came).

Again, services vary depending on your insurance company or plan - your plan might not include this feature, which does not necessarily mean it's a bad plan. The take-home point is that your trip insurance may be more helpful than you think in terms of convenience - above and beyond any dollar value.

4. If a catastrophe means you need to be returned home

If you suffer an accident that means you can't continue your trip, your travel insurance will most likely cover the cost of returning you home (not all plans will do this - check your policy for details). Even more importantly, they may even arrange your return travel for you. Normally, this involves some sort of accident that happened to you resulting in a medical event that prevents you continuing your trip.

Buying a plane ticket online at the last minute to go home is one thing if you're healthy and feeling OK, but if you're in pain, at a hospital, and your phone keeps defaulting to the local language when buying flights... it's a disaster. Not to mention, expensive because it's a last-minute flight. So you'll get so much convenience and peace of mind if your travel insurance handles your return flights for you in a catastrophe. It doesn't sound like much when you're healthy like now, but speaking from experience, it makes all the difference in the world when the unexpected happens in a foreign country.

If they buy your flights for you at the time (instead of you buying and them paying you back after you submit your claim), this isn't necessarily them being generous. They have their own travel agents who can snap up last minute flights that aren't available to you as a member of the general public and at a cheaper price point than you'd otherwise get. This helps make their total payout become a bit cheaper since the flights will be cheaper than what you could get.

5. You can use their concierge service if something unexpected happens, even if it you don't wind up making a claim

Not all insurance plans include a concierge service, but many do. The travel insurance concierge service over the phone is extremely helpful if something happens, even if it's not something that qualifies for a claim. Anytime something potentially big throws you for a loop - such as something happening to you, your belongings, or your flights at the airport, you can call the insurance concierge phone number to seek advice. This is more helpful than you might think.

If you suffer a bad event on your trip that is specifically not covered by your insurance so you can't put in a claim, you can still call the concierge service to seek advice on options for how to proceed.

The peace of mind of having the backup of concierge service is so important that it's one of the reasons travel insurance is worth it. You'll definitely want this if you go to a country where you're not a native speaker of the local language .

What does travel insurance not cover?

Different travel insurance companies and even different policies offered by the same company can differ widely in what they will and won't cover. This is why it's so important to read all the fine print first for any policy you're considering.

Travel insurance usually does not cover health pre-existing health conditions and certain other types of medical events - although most will cover medical events from a fall or other accident. There are also a lot of things it won't cover surrounding trip cancelations. Usually there is a whole section labeled "exclusions" for everything the policy won't cover. All of this is written in the policy details - if in doubt what a policy will and won't cover, ask for the document containing the full policy details before purchasing the policy. This will be a fairly long pdf, not the short 3-page brochure that you first saw. If a company won't give you that in-depth information upon request before buying, it's a red flag - look elsewhere.

The bottom line on whether travel insurance is worth it

A good rule of thumb is that travel insurance is worth it for the peace of mind for any international trip you take.

Remember that the cost of trip insurance is likely to be low compared to the total cost of the trip itself.

Ultimately, the final decision of whether to get travel insurance is up to you - no-one else can make that decision for you. It should be based on:

  1. how much risk you're willing to take on
  2. what the policy coverage includes and does not include
  3. whether the country you're traveling to requires you to show proof of travel insurance before boarding your international flight - or prefers it as a part of proof you need to show that you won't be a drain on the country. In this case it's necessary to buy travel insurance
  4. how able and willing you are to handle all the steps on your own if the unexpected happens in a foreign country

Will you be traveling to a French speaking country? If so, you'll want to look at our 4 easy tips on how to pronounce French words correctly.

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