Travel Insurance: Is It Worth It?

As the weather warms up, you’re finally looking forward to getting out of town.

But sometimes the joy of travel is dampened by the stress of travel. After all, there’s nothing like lost luggage, canceled flights, and stolen wallets to make your own bed start to look appealing compared to the sandy beaches of Fiji.

OK, maybe not quite.

We know travel is worth the potential headaches–but how do we minimize those headaches?

You probably know about trip insurance, and have heard some general rumblings about not paying for it because your credit card will cover you. But is that really true? Does trip insurance bring any added value, and is it worth it?

Deciding whether to pay for additional insurance on your vacation boils down to how much risk you’re comfortable with–and what it covers compared to most credit cards.

If You’re …

A Business Traveler

If you don’t have a corporate card and your company doesn’t book your travel for you, then trip insurance might be a good idea. Most major airlines offer account credit instead of money back if you cancel, and when you finally use that credit you’re often charged a $50 to $100 “re-booking” fee. You won’t want to risk your company not reimbursing you for a canceled business trip (or if there’s some reason you can’t go after all), but you may be able to get them to pay for travel insurance when you first purchase your tickets.
Not Worth It

Traveling With Kids

If you’re having nightmares of getting caught in a foreign locale with no stroller, crib, or diapers (or your flight being delayed and your toddler having a tantrum at gate B6), travel insurance may be a good idea. Meanwhile, travel insurance can pay up to $2,500 for lost baggage, and $600 for baggage that’s delayed for 24 hours or more—a godsend if your child is in need of the formula or medicine you put in your checked luggage. Most travel insurance plans even pay $100 per day for delays that last longer than six hours, which you can use on food or accommodation. Sleeping in an airport is bad enough; how awful would it be with a baby in tow?
Worth It

Traveling Internationally Or To Disaster-Prone Areas

If you’re heading overseas or traveling to, say, Bermuda during hurricane season, you’d be wise to have a little something to fall back on. Most international travel insurance covers 24-hour emergency medical assistance, medical evacuations, and hospital stays and surgery, according to Access America, the largest travel insurance provider in the world. If you’re worried about car accidents, worker strikes, or natural disasters, take a look at a lesser-known type of trip insurance called “unforeseen circumstances” insurance. If you go for this type of insurance, you won’t have to worry about getting home if a tornado levels your five-star chalet.
Worth It

You can pick up trip insurance on the checkout page of all reservation sites, from Delta.com to Travelocity. (If you’re not sure which site to use, check out our comparison of booking sites, including which have hidden fees.)

Travel Insurance vs. Credit Card Services

Most credit cards have some level of travel protection if you purchase your tickets with that card. Some even offer perks like car rental insurance and refunds on last-minute cancellations, and more robust travel concierge services for an extra fee. To find out more about which benefits your credit card offers, look at your membership literature or just Google your credit card’s name along with “member benefits.”

Below is a chart that outlines what your credit card will cover compared to trip insurance.

* Note that travel insurance mainly covers serious medical emergencies, and not things like doctor visits.

And don’t forget to prepare for your trip financially as well, with these tips.