Is The Cost Of Travel Insurance Worth The Benefits?

travel insurance

Is it time to get away from it all? While you are creating a trip budget, should you include travel insurance?


Travel insurance or traveler’s insurance is a supplemental insurance purchased to cover any loses while travelling domestically or abroad from ransom payments (!) to lost passports to damaged personal property.

Before COVID-19 only 1 in 5 Americans purchased this insurance, but since the virus, travelling can be a bit trickier and more people are considering investing in this. Some of the insurance policies you carry now, like homeowners and medical insurance, might cover what you need already.


This is the key for anything: You have to weigh the value of the purchase. Maybe in the worst-case scenario, your trip two states over going terribly wrong is still not worth buying insurance whereas your trip to Europe might be.

Travel insurance can be bought yearly or for one trip at a time. Annual insurance is for the frequent traveler.

There are many factors into the price of insurance, age and destination, but the general rule is the cost of the insurance is 5%-7% of the cost of the trip.


Trip cancellation or delay is a frequent use of travel insurance. People get sick, family members die, business plans change and weather is not always predictable.

Before you supplement with travel insurance, read your own policy (OK call and ask) to see what all your medical insurance covers when you go out of state or the country. Evaluate what insurance comes with a credit card purchase. Renter’s and Home Owner’s insurance might also cover some lost belongings, for example.

Read each policy carefully because they can vary greatly on their coverage. The main types of travel insurance include trip cancellation or interruption coverage, baggage and personal effects coverage, medical expense coverage, and accidental death or flight accident coverage.


There are several places to purchase insurance. If you buy travel insurance directly from the airline the insurance only lasts as long as the airline is in business and it is typically more expensive and you cannot see the details of the policy as well.

Another option for purchase is through the credit card company you buy the ticket through. Usually, the insurance only kicks in as secondary insurance. Credit card travel insurance only provides the most basic coverage.

Direct insurance purchases give you the most control and options. Before you buy directly from an insurance company, make sure you comparison shop through a website to see all of the pros and cons.

Before you purchase any insurance policy for your next vacation make sure you really think through what you need and make sure you purchase only what you need to cover your wants and needs.

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