Do you really need trip insurance?

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Do you really need trip insurance?A guide to evaluating when coverage is essential

Evaluating if travel protection is necessary? When planning a vacation, you need to consider key elements like booking flights, accommodations, and activities. But what about travel insurance? Is it really necessary, or just an additional cost you can skip? This article explores trip insurance types, when extra costs are worth it, and when you can safely skip them.

• Do you really need trip insurance
• Types of Trip Policies
• Comprehensive Travel Protection Benefits
• Calculating Insurance Costs
• Situations Where Coverage Isn’t Necessary
• Don’t Insure: Domestic U.S. Journeys
• Don’t Insure: Existing Coverage Suffices
• Don’t Insure: Flight-Only Plans
• Scenarios Where Protection is Advised
• Insure: Overseas Trips
• Insure: Medical Security Concerns
• Insure: Cruise Vacations
• Finally: Weighing Your Trip Priorities

Trip insurance types

Trip insurance generally has two categories: basic trip cancellation protection and comprehensive travel insurance. Basic protection usually covers lost bags, reimbursements for missed connections, and refunds if illness or injury prevents you from traveling. Comprehensive insurance includes all the basic trip cancellation benefits plus expenses for medical emergencies, dental emergencies, disaster evacuations, and even accidental deaths.

Comprehensive travel insurance benefits

Experts often recommend opting for comprehensive insurance. It covers not only basic cancellation benefits but also a wide range of medical and travel expenses. Additionally, some policies offer a “cancel for any reason” option, particularly useful for destinations prone to unrest.

However, without the “cancel for any reason” policy, reimbursement eligibility usually has strict rules. For example, pre-trip illness requires a doctor’s note for reimbursement. You must assess your risk level and make an informed decision based on your situation.

Evaluating trip insurance costs

One factor deterring purchasers is the added cost. According to ValuePenguin, all-in-one policies cost about 56% more than basic insurance, averaging around $164 per policy. While significant, weigh the potential benefits before deciding.

When you don’t need it

If an inexpensive trip you can afford to lose, insuring it may not be worth it. Also, if traveling in the U.S. where medical insurance covers emergencies and you have no cancellation concerns, you may not need it.

Don’t buy it: for U.S. travel

Domestic trips are generally cheaper than international, often planned just weeks in advance, and average four days and $576 per person. If you have existing U.S. medical coverage, it usually handles domestic emergencies. But always review policy terms and conditions.

Don’t buy It: If your card offers coverage

Before purchasing travel insurance, check if your credit card provides it. Cards like Chase Sapphire Preferred offer trip interruption insurance, baggage protection, and cancellation coverage. If your card’s coverage meets your needs, extra insurance may be unnecessary.

Don’t buy it: For flights

For flights, basic cancellation insurance may not provide value. If a flight cancels, passengers can usually rebook the next available flight. And depending on circumstances, you may claim compensation. Services like AirHelp can assist securing it for delays and cancellations.

If you cannot rely on rebooking for a specific deadline like a cruise departure, services like FreeBird can help by rebooking cancelled/delayed domestic flights on any airline. But these services involve additional costs. Do not buy insurance solely for flexibility. Some mistakenly think it acts as an open cancellation policy to change plans anytime. This wastes money, especially for hotel bookings. Instead of comprehensive coverage, opt for free hotel cancellation until your stay.

When you do need it

While there are times you can skip it, comprehensive travel insurance is highly recommended for international trips requiring advance planning and higher costs. It also becomes crucial if concerned about medical emergencies or evacuation.

Buy It: For international trips

International trips tend to cost more than domestic, with longer stays. Americans average 12 day trips costing $3,242 per person. As international trips need more planning, comprehensive coverage protecting many situations is advisable. If you have already invested significantly upfront, insurance provides peace of mind.

Buy It: For medical reasons

When traveling to remote places with limited medical access, insurance is essential. While most policies cover “customary and reasonable” hospital costs abroad, serious issues still involve significant out-of-pocket expenses. For example, medical evacuation can cost over $50,000 depending on location and condition. Insurance helps cover these and ensures necessary care.

Buy it: For cruises

Cruises require substantial upfront payments, involve international travel, and have higher risks of problems. Experts recommend comprehensive coverage. Many cruise lines offer protection packages similar to external companies like AIG and Allianz. These widely cover situations including hurricanes, particularly relevant in season.

Purchase cruise insurance ahead of time, as once a storm is named, companies cannot issue new policies. Investing in comprehensive trip insurance protects your investment and assists with unexpected issues.

In conclusion

Deciding if insurance is necessary requires assessing trip type, destination, and your circumstances. While basic cancellation may not provide value, comprehensive travel insurance can offer essential peace of mind for international travel, medical issues, and cruises. Evaluate your specific needs and budget to make an informed decision.