If you have booked a trip or vacation recently then you have probably asked yourself, is travel insurance worth it? The answer is yes and no, and I will explain the reasons behind each in this blog. There are many different reasons behind getting travel insurance, and the good news is, it's completely up to you if you want to get it or not.
There are many different stipulations when it comes to travel insurance and insurance in general. This blog will not be laying out all the details and T&C's of travel insurance companies. I want to give advice to people who travel on when it is advisable to get travel insurance, and when not to.
When you book your travel, companies will usually try and pressure you into taking their travel insurance, and even if you want coverage, don't take it from the company you book with. These companies usually have extortionate fees and points to catch you out in the small print. You should also be aware that there are a number of credit cards in the world that offer travel insurance. Please don't think that this means you are fully protected. Credit card companies generally advertise with "free travel insurance" as a benefit but you will find that the small print has some hidden warning signs. I have come across cards previously that offer free travel insurance, and later found out that the travel insurance might only cover you for a 7-day trip or covers up to $500. Just make sure you read all the terms before thinking you are covered.
The Reasons for Travel Insurance
As mentioned already it is entirely dependant on you to decide if travel insurance is worth it, and there are different reasons that can help you decide that. If you are going to spend the whole time worrying because you aren't covered, then it's probably worth just paying the money and enjoying your trip. The main two considerations that you should have to begin with is:
Some people go 25 years without ever breaking a nail, then break their leg on a trip. Some people will injure themselves every day but will be absolutely fine when they travel. The point is, you can't predict what's going to happen when you travel, you could develop appendicitis which would require expensive surgery, a tree could fall and hit you, or you could get food poisoning. Without travel insurance, you may end up paying anywhere from $500 to $30,000 depending on what happens and where. This is where you need to decide if it's worth the risk, even if you are that person that "nothing ever happens to you".
There are a range of financial risks that you take if you decide that travel insurance isn't worth it. You might have a family emergency that means you have to cancel the trip, items may get stolen, you could lose your luggage, and also suffer if you rent a car without insurance. Most of the risks here are a mixture of your responsibility and things that are out of your hands. You also may already have insurance out on your electronics for example, but you should double-check the terms in case it doesn't cover you in another country. Just make sure you are aware of the financial risks you take when travelling without insurance.
Disclaimer - I am not telling you what the right thing to is, this is purely for advice based on logic and experience.
When to Say Yes to Travel Insurance
There are instances where you should consider travel insurance no matter what. Here are some of the main reasons when travel insurance is worth it.
If You Book With a Budget Airline
If you are booking a flight with a budget airline OR an airline that has had speculation of recent financial troubles, I would strongly recommend getting travel insurance. There have been instances over the last 5 years where major budget airlines have ceased activity due to financial constraints. This can happen at an instant, and while it may not be so bad if you haven't left yet if you are already on your vacation/trip, you could find yourself in hot water. If the airline you are flying with ceases activity it will usually happen at the click of a finger and all flights will be grounded. They are at no obligation to get you home and occasionally other airlines may jump in and help as it's good marketing for them.
I have read stories that people have been stranded in a country because they didn't have money for a flight home and had no travel insurance. This might not be too bad as a single traveller, but imagine a family of 5. There are some credit cards that will cover this with travel insurance, however, I would recommend getting travel insurance to be on the safe side.
When You Book International Travel
When you book international travel, you should expect to pay a hefty amount of money for flights, accommodation and any additional extras. Even if you are a budget traveller, international travel is still a considerable amount more than domestic. Most international trips are booked months ahead of time to get the best price too. If you aren't covered by travel insurance, then you run the risk of losing a large sum of money. It makes more sense to protect your expensive investment for a small sum of money.
For Long-Term Travel
You will be surprised how many long-term travellers don't actually have travel insurance. You might be really lucky and end up going 1 - 2 years without ever getting sick/hurt or losing your bags. But the reality is you are going to be away for a very long time compared to a short vacation, this automatically increases your risk by huge amounts. You should therefore definitely have travel insurance for long-term travel.
For Medical Reasons
If you travel to a country that is known for poor hygiene and sanitation, then you should probably take out travel insurance. You never know how sick you will get and should be prepared that even though it's a cheap country, the medical bills are the opposite.
This also applies to people that decide to travel with illnesses or that are prone to them. For example, if you know you have asthma and you are travelling, not taking out travel insurance would be a huge risk. Anyone with a lasting condition should get travel insurance. Be aware that some may not cover recently diagnosed conditions. Also, if you have a weak immune system, you should get travel insurance. Your body will be introduced to new "bugs" when you travel, which could knock you off your feet. If you need medical assistance as a result, you will lose money without travel insurance.
Places Where Natural Disasters are Rife
The main example of a location I can give here is Bali. Bali is prone to earthquakes and volcano eruptions that can disrupt flights. If you know you have you booked a trip to somewhere that is at risk of natural disasters, then you should also purchase travel insurance to be on the safe side. Problems can occur before you travel resulting in loss of money and problems can occur when you are at that location causing medical expenses.
When to Say No to Travel Insurance
There are certain instances where I would suggest that travel insurance is not necessary, but this is circumstantial and is your choice entirely. I look at the situations as if the benefit outweighs the risk then you don't need to worry.
If you decide to travel internally or domestically then there usually isn't a need for travel insurance. You have to look at it this way, you will be covered for medical with your normal insurance provider, some credit cards may have increased coverage for travel insurance as you are still in the country, and you generally will not have invested $1,000's on your travel. Don't misunderstand though, you can still stand to lose money with domestic travel. If something happens with your flights, for example, you will lose that money. The good news is, it will be minimal compared to and international flight.
Last Minute Travel
Is travel insurance worth it for last-minute travel? Again, it depends on what you have invested. Some people are put off by last-minute travel because they don't have travel insurance. What you need to consider is that with last minute travel deals, you will likely pay much less than normal, which means less of a risk. I would say that with last-minute international travel, you will be more at risk and should be sceptical of deciding to go against travel insurance, after all it doesn't take long to take out travel insurance. If it is domestic last-minute travel, I wouldn't worry at all.
With Some Airlines
When people take out travel insurance, the main reason is to cover their flights. However, you should always check the airline's terms and conditions first because some of the bigger airlines will give you a new flight at no extra cost when something happens that is their fault. Make no mistake though, if it is your fault you couldn't make the flight, you won't get any money back. There are instances where the airline may delay the flight by 15 hours, 20 hours, or even a day, this means that without travel insurance, you will lose out on other bookings you have made for arrival.
If Your Credit Card is Good
It would be a headache to try and type out all the different travel insurance T&C's for credit cards as they are so diverse and complex. In my opinion, credit card companies try to catch you out with travel insurance. Some cards will cover cancelled flights but not lost bags, some will cover a portion of medical expenses on trips shorter than 90 days, and there are so many other variations you will find. The main thing to remember is to check you are covered before you leave. You should also check out this blog for the best travel credit cards:
The best tip I can give, don't sign up to a new credit card for travel insurance before you book a trip. You should book your trip and once you know your financial investment and length of trip, browse the different credit cards to see how much they cover you for. It's better to know what is covered in case you are missing something vital, for example, you book a trip for 3 weeks and the credit card covers you for 14 days only.
You should also check your existing credit card to see what you are covered for. You might find that the credit card covers you for everything and you won't even need to worry about travel insurance.
So is travel insurance worth it? Next time you book a trip, think about these points and make a decision that suits you best. Just remember one thing, ensure that the benefits outweigh the risks. I have travelled with and without travel insurance with experiences of paying for lost flights and being covered for medical expenses. I will be looking at the best travel insurance companies in a future blog to give you more of an idea of what is included. So make sure you subscribe to our emails.