Is Trip Protection Worth It?

Is Trip Protection Worth It?

If you’ve never had the occasion to use travel insurance benefits, you may wonder if buying trip protection is really worth the expense.

Let’s run some numbers! (We’re insurance people — we love numbers.) In our example, 45-year-old Daphne is going on a 7-day Caribbean cruise with her sister. When she adds up the cost of the cruise fare (including port fees and taxes), the drinks package, shore excursions, and airfare, she’s paying $2,685.

What about travel insurance? Based on her age and the cost of the trip, she gets a quote of $151 for OneTrip Prime, our most popular travel insurance plan for cruises and tours. Daphne hesitates to spend the money on travel insurance. Is it worth it? she wonders. The best way to answer that is to look at some what-if scenarios.

Is trip protection worth it… if she has to cancel the cruise?

Scenario 1: Two days before the cruise departure date, Daphne’s sister slips on some black ice in the driveway and shatters her knee. She’s in the hospital, facing surgery, and they’ll have to postpone the cruise until she recovers. The airline agrees to refund Daphne’s $300 ticket — but the cruise line, citing its strict refund policy, gives her $0.

Luckily, travel insurance with trip cancellation benefits can help. The covered serious injury of a family member or travel companion can be considered a covered reason for trip cancellation. In this example, Daphne can file a claim to be reimbursed for her nonrefundable, prepaid trip costs.

• Plan cost: $151
• Potential benefits received: $2,385

Is trip protection worth it… if her flight gets delayed?

Scenario 2: A freak snowstorm grounds Daphne’s flight out of Washington D.C. She begs the airline rep to help her get to Miami, but it’s no good: all flights are canceled. That means she’s going to miss her cruise ship’s departure the next day.

Daphne calls the Allianz Global Assistance hotline for help. The assistance coordinator tells her that her insurance includes missed connection benefits up to $800, which can help in three important ways. First, Daphne can be reimbursed for the unused part of her cruise if she misses at least 24 hours of the trip, minus any refunds. Second, she can be reimbursed for reasonable meal and accommodation expenses while she’s stuck at the airport. Third, and best of all, her insurance can reimburse her for the extra cost of transportation to catch up with the cruise. Her coordinator helps her book a flight from D.C. directly to Nassau, where she can rejoin the ship — and her sister — at its first port of call.

• Plan cost: $151
• Potential benefits received: $800

Is trip protection worth it… if the airline loses her bag?

Scenario 3: Daphne flies into Miami and waits for 45 minutes at the baggage carousel, but her suitcase fails to show up. It was sent to Atlanta, the airline tells her, and should arrive by noon the next day — but by then, Daphne will already be sailing away. Frantically, she rushes around to buy sundresses, a swimsuit, and other cruise essentials.

OneTrip Prime includes baggage delay benefits up to $300, which means Daphne can be reimbursed for reasonable essential items, up to the specific policy’s limit, until her baggage arrives.

• Plan cost: $151
• Potential benefits received: $300

Is trip protection worth it… if she has a medical emergency?

Scenario 4: When the cruise ship docks in Nassau, Daphne and her sister head off on an ATV tour of the tropical forest. Daphne’s ATV hits a rock and overturns, leaving her with a possible spinal injury. Panicking, her sister calls the Allianz Global Assistance hotline for help. The medical team rapidly arranges a medical evacuation flight to carry Daphne to a Miami hospital, where she can receive the best care for her injuries.

OneTrip Prime includes up to $500,000 in emergency medical transportation benefits and up to $25,000 in emergency medical and dental benefits for covered injuries or illness. Not only can Daphne’s air ambulance and medical care be covered, but if she’s hospitalized for more than seven days during her trip, Allianz Global Assistance can arrange and pay for economy class transportation for a friend or family member — like her sister — to stay with her. Once her condition has stabilized, emergency medical transportation benefits can help her return home, with a medical escort if necessary.

• Plan cost: $151
• Potential benefits received: $50,000+ (the cost of emergency medical transportation and emergency medical care can vary widely, depending on the traveler’s location and the nature of the medical emergency).

Is trip protection worth it… if the trip goes 100% according to plan?

Scenario 5: Daphne’s flight and bags arrive on time. She and her sister have a fabulous time on the cruise — the weather is perfect, the food is fantastic, and the excursions are delightful. She returns home happy and rested, but with one thought nagging at her: Was travel insurance a waste of money?

Not at all. The whole point of a cruise is leaving your worries on the dock, and travel insurance allowed Daphne to do just that.

• Plan cost: $151
• Peace of mind: Achieved

Please understand that these are just hypothetical scenarios. Every trip and every traveler’s circumstances are unique, and travel insurance does not cover every possible situation. An insured traveler must file a claim and have it approved before receiving reimbursement.

Also, every travel insurance plan has different benefits and limits. It’s vitally important to read your plan documents and understand the benefits before you set off on your trip. If you’re not completely satisfied with your plan, you have 15 days (or more, depending on your state of residence) to request a refund, provided you haven’t started your trip or initiated a claim. Premiums are non-refundable after this period. Have questions? Call us! The travel insurance experts at Allianz Global Assistance can help.

Is Travel Insurance Worth It?

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Table of Contents

Table of Contents

Travel can be expensive. Insurance protects your vacation investment if the unexpected occurs. But is travel insurance worth it? The answer will depend on whether your trip is refundable, where you’re going, whether you’ll have health coverage at your destination and how much coverage you already get from your credit card. Here are some key topics to understand when deciding if travel insurance is right for you.

What does travel insurance cover?

Travel insurance covers a number of travel-related risks, from flight cancellations to lost bags to medical emergencies. The dollar amount of your coverage depends on the policy you bought and where and when you bought it. Most travel insurance providers offer several different policies to choose from, with higher or lower levels of coverage and higher or lower prices to match.

You can buy policies that cover a single trip, multiple trips or a full year. You can buy an individual policy or one that covers your entire family. There are many companies that offer policies, with Allianz and Travel Guard among the best-known. Here is a chart showing the benefits and coverage levels available on some Allianz policies.

Emergency medical transport

$300 / daily limit $150

$800 / daily limit $200

$600 / daily limit $200

$1,500 / daily limit $300

Rental car damage/ theft

Covered if certain criteria are met

Covered if certain criteria are met

Covered if certain criteria are met

NerdWallet recently analyzed various travel insurance policies to help you choose the plan that best aligns with your travel goals. Check out our results here: Best Travel Insurance Companies Right Now .

What is excluded from travel insurance?

Incidents not covered by your travel insurance vary by policy and provider.

Pre-existing medical conditions are often excluded from coverage, meaning your benefits don’t apply to claims related to that condition. Some policies cover pre-existing medical conditions if you meet certain criteria, for example if you purchased the policy within 14 days of paying for your trip and if you were well enough to travel when you booked your trip.

Plan on mountain-climbing or engaging in other dangerous activities on your trip? Many policies won’t cover you if something goes wrong. Other incidents excluded from your policy may involve war, acts of terrorism and the use of alcohol, which can cause your injuries to be designated as “self-inflicted,” or the use of drugs, which may be illegal.

If you want full flexibility to cancel your trip you’ll need to find a policy that allows you to purchase a Cancel For Any Reason (CFAR) add-on. This additional benefit does exactly what the name implies and allows you to cancel your trip for any reason. Typically, you’ll get around 75% of your prepaid nonrefundable trip expenses back, although exact timing and percentages vary by policy.

Does travel insurance cover coronavirus-related claims?

In most cases, no. Many travel insurance policies specifically exclude claims related to coronavirus. However, some insurers are making exceptions for policies already in effect. For example, Allianz will cover medical expenses for existing policyholders who get sick with COVID while on a trip. Additionally, they will cover trip cancellation or interruption if you get sick with COVID before or during a trip. But if you haven’t purchased travel insurance yet, the policy you’re considering probably won’t cover you for COVID.

When is travel insurance not necessary?

Travel insurance primarily covers two aspects of your trip — your reservations and your medical expenses while traveling.

If all of your reservations can be canceled without penalty, then trip cancellation or trip interruption coverage isn’t necessary. But even if your trip isn’t 100% refundable, insurance may not be necessary. For example, a cheap flight and hotel stay may not be worth covering, though you may still want to purchase travel insurance for medical situations.

Medical coverage typically is not necessary if you have a U.S.-based health insurance policy and you’re traveling within the U.S. In those cases, you probably already have adequate coverage for illness or injury.

When is travel insurance worth it?

There are two situations in which travel insurance can be worthwhile: to protect your trip and to protect your health.

If you prepaid for your trip and cannot cancel without penalty, travel insurance is probably a good idea. If your trip is canceled or interrupted for a covered reason, this protection will cover your reservations.

If you’re planning to travel to a destination that could have weather-related issues, like hurricanes in the Caribbean, travel insurance may protect your noncancelable reservations. Some policies also provide emergency evacuation to escape dangerous situations. However, if you try to purchase travel insurance after the storm poses a risk, the insurance probably will not protect you.

U.S.-based health insurance policies generally offer coverage anywhere within the U.S. But if you get sick or hurt when you travel internationally, some policies like Medicare may not cover you.

Even if your health insurance covers you outside the country, doctors at your destination may not accept it. Without travel insurance, you could be stuck paying for these bills out of pocket, then seeking reimbursement from your healthcare provider.

If you already have some travel insurance protections (e.g., trip cancellation, trip interruption, baggage delay) from your credit card, consider purchasing a standalone travel medical insurance policy to protect you in case of medical emergencies on your trip.

Where can you buy coverage?

If you booked your trip through a travel agent, you can likely purchase coverage through them. That includes online travel booking engines like Expedia. If you’re taking a cruise , you’re usually offered the chance to purchase coverage during the booking process. Similarly, airlines may offer you certain types of coverage when you book a flight through their website. If you have an award booking , you have travel insurance options too.

Another option: Purchase travel insurance directly through the website of a travel insurance company, like Allianz , AXA or Travel Guard .

How much will it cost?

The cost of travel insurance is based on the specifics of your trip. The best way to get a price is to request a quote through the websites of travel insurance providers. Or you can compare multiple insurers in one place with a consolidator like InsureMyTrip.com or SquareMouth .

Should you rely on credit card travel protections instead?

Many travel credit cards provide certain coverages in case your flight is delayed or canceled, your rental car is damaged, or your luggage is lost or delayed.

Here are a few credit cards offering travel protections that could serve as an alternative to travel insurance.

Up to $1,250 lost baggage.

Secondary rental car protection.

Secondary rental car protection.

$500 trip delay (trips booked after Dec. 31, 2019).

$10,000 trip cancellation (trips booked after Dec. 31, 2019).

$10,000 trip interruption (trips booked after Dec. 31, 2019).

Primary rental car protection.

$10,000 trip cancellation.

$10,000 trip interruption.

Up to $500 baggage delay.

Up to $500 trip delay.

Primary rental car protection.

$10,000 trip cancellation.

$10,000 trip interruption.

Up to $3,000 lost luggage.

Up to $500 trip delay.

$100,000 emergency evacuation.

These are attractive benefits, but the coverage may not be as broad as you would get buying insurance. For example, credit card benefits do not typically protect you in case you are injured or get sick during your trip. Plus, these cards can come with steep annual fees that may be more than you would pay for a travel insurance policy. So don’t sign up for a card just to cover one trip unless you’ve compared costs.

The bottom line

If you’ve paid a considerable sum for a nonrefundable vacation, travel insurance is likely a good idea. International travelers who need coverage in case they get sick or injured should also consider buying a policy. If troubles arise, you’ll be glad that you’re protected.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022 , including those best for:

Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card

Bonus travel rewards and high-end perks: Chase Sapphire Reserve®

About the authors: Lee Huffman is a travel writer and podcast host based in Nashville, Tennessee. He loves to travel with his wife and two children using miles and points. Lee has held the Southwest Companion Pass since 2007 and enjoys being spoiled thanks to his Kimpton Inner Circle status. Read more

Elina Geller is a Lead Travel Writer at NerdWallet specializing in airline and hotel loyalty programs. Her work has been featured in AwardWallet. Read more

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Should You Buy Travel Insurance And Is It Worth It?

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.

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Travel insurance makes sense if you want to protect the amount of money you’ve laid out for your vacation. But no one can blame you if you’re hesitant to add another expense to your travel budget after paying for airfare, hotels, meals and activities. Still, if you can’t afford to lose that money if something unexpected happens, travel insurance can be a smart investment.

The average insured trip cost is about $5,453, according to Squaremouth, a travel insurance comparison website. The cost for travel insurance was $252, on average. You may be planning to spend much more than that for your dream vacation, or you may be going on a long weekend get-away that costs much less.Typically, the cost of travel insurance is 5% to 6% of your trip cost.

Here are some scenarios where travel insurance can pay off.

What Travel Insurance Covers

Travel insurance compensates you for trip costs and money you spend due to unforeseen events before and during your trip.

Trip cancellation travel insurance

Before you’re even able to finish packing your sunscreen and swimsuits, an unforeseen circumstance could force cancellation of your trip—for instance, if a tour operator goes out of business, you become ill or a family member dies. Travel insurance that includes trip cancellation coverage will reimburse the pre-paid, non-refundable costs of your trip in these kinds of situations.

Furthermore, if you, a family member or a travel companion becomes sick or is injured while traveling, the policy’s trip cancellation feature typically would reimburse you for the unused part of the trip. The trip cancellation benefit could even kick in if you, a family member or a travel companion dies while traveling.

Compare & Buy Travel Insurance

“Cancel for any reason” travel insurance

Note that you can make a claim using trip cancellation coverage only if your reason for canceling is listed in the policy as an acceptable reason. To broaden cancellation coverage, there’s an add-on known as “cancel for any reason” travel insurance (CFAR).

CFAR coverage lets you cancel a trip for any reason and receive partial reimbursement, as long as you cancel at least 48 hours before your scheduled departure. For instance, maybe you’ve opted to stay home so you can attend your high school reunion after all. CFAR coverage typically adds 50% to your standard travel insurance policy cost. Reimbursement is generally 75% of the trip money you lose.

Travel medical insurance for emergencies

Whether you’re canoeing in Argentina or taking a safari trip in Zambia, a medical emergency can certainly put a big dent in your travel mojo. It also can put a big dent in your budget.

Many U.S. health plans offer no coverage outside the country. That means you have to pay for your medical care if you get injured or become ill during your trip—and if you think it’s not likely, think again. Allianz, a travel insurance company, says it receives more than 4,000 calls a year from customers who are experiencing a medical emergency during a trip.

Travel medical insurance covers costs for doctor and hospital bills, ambulance service, medicine, X-rays and lab work, up to the limits in your policy.

Medical evacuation travel insurance

Imagine needing to be airlifted off a mountainside in Switzerland after a hiking mishap, spending a few weeks in a Colombian hospital recovering from a heart attack or requiring a flight back home from Jamaica to treat a broken hip.

It can cost an estimated $15,000 to $200,000 to be transported by helicopter or ambulance to a nearby health care facility for treatment of an injury or illness somewhere in the world, according to Allianz. That does not include the cost of the treatment itself.

Medical evacuation travel insurance covers the expense of being taken to the closest health care facility overseas that’s equipped to treat you, and it also may pay for someone to be flown back to the U.S. for advanced medical attention. Along with medical evacuation, a policy can cover the repatriation, or transfer, of a traveler’s remains to the U.S.

For example, the TripProtector Preferred plan from HTH Worldwide is one of the most generous in the industry, providing $500,000 for emergency medical expenses and $1 million for emergency medical evacuation.

Travel insurance for missed connections

Missing a connection while you’re traveling can be a costly hassle. Missed connection travel insurance reimburses you if you miss a departure for a reason listed in the policy.

This would compensate for a travel delay of, say, three, six or 12 hours caused by something like a mechanical failure on a plane or a storm that prevents a cruise ship from docking on time. The compensation typically would cover the cost of catching up to a tour or cruise.

For example, the Classic plan by TravelSafe provides $2,500 after three hours of a missed connection.

Travel Insurance for flight cancellations

Flight cancellations caused by bad weather conditions, like storms and blizzards are typically covered by flight insurance. However, with flight cancellations becoming more and more common, for a variety of reasons and complications, it may be worth buying travel insurance for flight cancellations

Travel insurance for flight cancellations can reimburse your forfeited, non-refundable trip costs if the reasons of cancellation is not covered by standard travel insurance.

Travel delay insurance

Travel delays are a headache for many travelers. A policy with travel delay insurance can reimburse restaurant and hotel expenses when a flight is delayed due to a reason listed in your policy, for instance bad weather or a mechanical problem. The daily amount of coverage usually ranges from $150 to $200.

For example, Trawick International’s Safe Travels Voyager plan provides travel delay coverage of $150 a day, up to $2,000 total, after five hours of delay.

The travel delay benefit could also cover costs for you to catch up to a destination or go back home, or even may reimburse you for unused trip expenses that are pre-paid and non-refundable.

Baggage insurance

If your luggage is lost, stolen or damaged during a trip, a travel insurance policy with baggage insurance can reimburse you. Homeowners insurance or renters insurance policies can also cover theft of your baggage and belongings.

Baggage insurance also extends to your personal possessions, so if your backpack gets stolen, you can file a claim. Be aware that baggage insurance compensates you for the depreciated value of your belongings and not the amount to replace your stuff with new items. Also, there are exclusions and caps on certain items.

In addition, some travel insurance plans cover baggage delays. This coverage can pay for items you need to buy, such as clothing and toiletries, to tide you over while you’re waiting for your luggage to catch up with you. Note that baggage delay benefits come with a specified waiting time before benefits apply.

Here are some examples of baggage delay coverage from some of the best travel insurance companies in Forbes Advisor’s ratings:

TripProtector Preferred Plan: $400 after a five-hour delay Gold plan: $500 after a five-hour delay RoundTrip Elite plan: $600 after a five-hour delay Safe Travels Voyager plan: $600 after a 10-hour delay Select Elite plan: $500 after a five-hour delay

All in all, travel insurance is a small cost relative to the trip costs you can protect—especially when traveling uncertainties and surprises abound.

What Does Travel Insurance Not Cover?

Travel insurance generally doesn’t cover losses due to reasons and circumstances that are within your control. It’s designed to safeguard your trip investment if unexpected circumstances derail your plans.

For instance, trip cancellation benefits only apply if you cancel due to reasons listed in your policy, which are unforeseen events beyond your control. That means you won’t be eligible to file a standard trip cancellation insurance claim if you simply change your mind about going on your trip. For that, you would need CFAR coverage.

You should review the fine print of your travel insurance policy and familiarize yourself with what your policy doesn’t cover because all travel insurance plans have exclusions.

For example, medical claims exclusions often include things like:

• Elective procedures
• Mental health care
• Participation in adventure or extreme activities
• Physical therapy
• Routine physicals and routine dental exams
• Routine pregnancy

Also be aware that travel insurance policies generally won’t cover your losses for a hurricane unless you purchase travel insurance before the storm is named.

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When is Travel Insurance Worth It?

Generally, travel insurance is worth considering if:

• Your trip cost is much more than you can afford to lose
• You are traveling internationally
• You are traveling to a remote area with limited nearby health care facilities
• You are traveling to a hurricane-prone country
• You have lots of pre-paid, non-refundable tours, day trips and activities planned
• Your trip involves connecting flights or multiple destinations
• You want to be compensated for Covid-related cancellations and medical issues when traveling abroad
• You want to be partially reimbursed if you decide to cancel your trip or return home early for any reason

When Is Travel Insurance Not Necessary?

You generally don’t need travel insurance if you’re not putting down large non-refundable trip deposits, or if your health plan will cover you at your destination.

For example, travel insurance may not be necessary if you’re taking a cheap, domestic trip. If you’re going on a long-weekend getaway and staying with friends with plans to see a show and do some shopping, you likely won’t have a lot of pre-paid, non-refundable expenses. And your U.S. health insurance can cover any medical costs if you get sick or injured during your trip. In that case travel insurance may not be needed.

You also may not need travel insurance if your credit card benefits provide travel insurance coverage. It’s wise to check with your credit card company before planning a trip so you’re aware of any applicable travel coverage.

Also keep in mind that some baggage insurance is secondary, which means you first file a claim with your airline or homeowners insurance. You may want to skip baggage insurance if you have secondary baggage insurance, you’re not packing a lot of expensive items and have a direct flight.

Source https://www.allianztravelinsurance.com/travel/planning/is-trip-protection-worth-it.htm

Source https://www.nerdwallet.com/article/travel/is-travel-insurance-worth-getting

Source https://www.forbes.com/advisor/travel-insurance/should-you-buy-travel-insurance/