The Pros and Cons of Travel Insurance (2024)

Whether you’re traveling to faraway destinations or just across the country, travel insurance can safeguard your journey against many unfortunate scenarios. It can also be expensive, difficult to file claims, and not always cover the things you thought it would — or should.

In this article, we’ll describe the pros and cons of travel insurance, along with what a travel insurance policy covers — and doesn’t cover. We’ll also provide a rough estimate of how much to budget for travel insurance costs, and where to find the best deals for every type of journey.

What is Travel Insurance?

Travel insurance is a type of policy that covers an individual while traveling domestically or internationally. These short-term insurance policies were designed to safeguard your journey against flight delays, lost luggage, the unfortunate mishap, or a serious medical emergency. All scenarios where travel insurance could save the day — or the entire trip.

Why Should I Purchase Travel Insurance?

The number one reason to purchase travel insurance is to ensure you won’t lose your money over a trip cancellation. Many travel carriers, cruise lines, and tour operators offer nominal reimbursem*nts for last-minute cancellations – making it important to read the fine print.

Moreover, many foreign countries are increasingly requiring visitors to carry a travel insurance policy before entering. A travel insurance policy can also reimburse your costs if you have to cancel your trip for any of the covered reasons detailed in your policy. Again, read the fine print.

Lastly, before purchasing a travel insurance policy, check with your credit card company. Many travel rewards cards cover some, or all of the cost of travel cancellations or disruptions, lost luggage, and other issues that may occur. This leads us to…

What Does Travel Insurance Cover?

Most travel insurance policies will cover trip interruptions, lost, stolen, or damaged luggage – some may even cover damages to your rental car. Here’s a general list of what coverage your policy might provide:

  • Airline cancellation*
  • Baggage loss or delay
  • Emergency evacuation
  • Hijacking
  • Lost passport services
  • Medical costs & evacuations
  • Missed connections/departures
  • Personal accident or injury
  • Prescription eyeglass replacement
  • Trip cancellation
  • Trip changes

📌 *As Covid-19 continues to disrupt air travel, be sure to understand whether Covid-related cancellations by airlines, consolidators, or travel bundlers are covered in your policy.

What Doesn’t Travel Insurance Cover?

A travel insurance policy won’t cover some activities or circ*mstances, including the following:

  • Dental treatments
  • Injuries incurred from participation in extreme activities that involve the risk of serious injury or death
  • Injuries incurred from participation in a professional sporting event
  • Injuries incurred from learning how to fly a plane
  • Medical-related travel expenses
  • Pregnancy-related treatment
  • Pre-existing conditions

How Much Does Travel Insurance Cost?

Travel insurance policy costs vary widely, but a general rule of thumb is to budget 4-10% of the value of your trip. For example, if you’ve invested $5K into your vacation, your travel insurance policy might add an extra $250-$500 to the overall cost of the trip, depending on the level of coverage.

Additional factors affecting the cost of travel insurance include the number and age of travelers, points of departure and destination, length of stay, and type of coverage requested. Any pre-existing medical conditions must be divulged and may or may not be covered, or only at an additional cost.

How Does Travel Insurance Work?

Should something unfortunate happen during your trip like an injury, illness, a severe weather event, or an individual is required to return to work, a travel insurance policy can reimburse the remaining cost of the trip, as well as cover medical expenses (up to the limit of the policy) for the insured.

How Do I File a Travel Insurance Claim?

Filing a claim is similar to filing a vehicle damage or home insurance claim. Should you experience any event that results in trip cancellation (or curtailment), you’ll need documentation to support your claim, e.g. hospital receipts, airline confirmation of cancellation, or employer verification, to expedite your claim reimbursem*nt.

📌 Pro tip: Be sure to print out your travel insurance documents and carry them with your passport or other identification papers. They contain important contact information for domestic and international travelers.

Pros of Purchasing Travel Insurance

The top reason for purchasing travel insurance is simply peace of mind. However, beyond resting easy, a travel insurance policy ensures you won’t lose the entire cost of a long-planned vacation or any other travel plans.

Here are some other good reasons to purchase travel insurance for your next adventure. Depending on your policy, travel insurance will:

  • Compensate for trip cancellations or interruptions, in most circ*mstances
  • Compensate for lost, stolen, or damaged luggage (including computers and cameras)
  • Cover medical expenses (see any pre-existing condition clauses that may apply to you)

The Pros and Cons of Travel Insurance (1)

Think of travel insurance more as an investment. You worked hard, saved, and planned for a well-deserved vacation. Should a catastrophic weather event occur at your destination, and your travel plans are dashed, a travel insurance policy ensures you won’t lose your entire investment.

Cons of Purchasing Travel Insurance

While many of us are traveling on a shoestring, most see the added expense of travel insurance as its biggest barrier. There are other reasons besides the expense not to purchase a travel insurance policy — your claim may not be accepted, and there's lots of loopholes.

Included in the list of what your travel insurance policy does not cover, are injuries due to participation in extreme activities. Some insurance companies consider breaking an ankle while walking as an "extreme activity."

The Pros and Cons of Travel Insurance (2)

Be sure to choose a policy that will cover your lifestyle or activities. If you’re traveling for a bicycle touring holiday make sure your policy will cover the cost of medical treatments, or evacuation, in the event of a serious accident.

Do I Need Travel Insurance?

Travel insurance is meant to provide some peace of mind. And, although not a necessity, at least for domestic travel, unfortunate mishaps can not only ruin your trip but cost you more money in the long run.

Keep in mind, all insurance policies come with specific terms, conditions, exclusions, and benefits. Reading the fine print BEFORE purchasing your policy will help you to understand what’s covered in your policy should you need to use it — and the high probability of recouping some, if not all — of your travel costs investment.

Where Can I Purchase Travel Insurance?

There are numerous reputable online travel insurance companies and bundlers. Services like AARDY take the guesswork out of the search by offering side-by-side comparisons of top-rated travel insurance policies.

Need a Passport or Passport Renewal?

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Keep apprised of the latest Covid travel restrictions around the world. Download the Skip app for convenience on the go.

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The Pros and Cons of Travel Insurance (2024)


What is the benefit of travel insurance? ›

Travel insurance is coverage designed to protect against risks and financial losses that could happen while traveling. The risks range from minor inconveniences such as missed airline connections and delayed luggage all the way to more serious issues including injuries or major illness.

Does travel insurance really pay? ›

If your trip is canceled for a covered reason, a policy will often reimburse airline tickets, hotel rooms, rental cars, tours, cruises and other prepaid, non-refundable expenses.

How much travel insurance is enough? ›

How much travel medical insurance do you need? Squaremouth, a travel insurance comparison site, recommends buying at least $50,000 in emergency medical coverage for international travel. For travelers going on a cruise or to a remote destination, the site recommends at least $100,000 in coverage.

Should you travel without travel insurance? ›

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.

Does travel insurance cover non-refundable flights? ›

That's where travel insurance comes in. Travel insurance offers the assurance that you'll get reimbursed for non-refundable travel costs from a travel insurance provider. Frequent or business travelers also benefit from this safety net for flight cancellations.

Does travel insurance cover flight cancellation? ›

Cancellation cover is a common inclusion with most standard travel insurance policies, but you can take it out separately if it doesn't offer enough cover. Alternatively, if you only want cancellation cover to protect you against cancelled flights rather than baggage protection, you can get it for that.

Does travel insurance cover cancellation? ›

If you need to cancel or cut short your holiday because something unexpected happens, cancellation cover lets you reclaim some or all of the money you've already paid out. So, if you suddenly become seriously ill and can't go on holiday because you need treatment, you can claim on your travel insurance policy.

Do credit cards come with travel insurance? ›

While it would be ideal if all credit cards provided travel insurance benefits, this simply isn't the case. Travel rewards credit cards often offer insurance, though coverage limits and types of protections vary by card. You'll generally see the highest levels of coverage with high-annual-fee travel credit cards.

Is Allianz good travel insurance? ›

Allianz is a popular choice among business travelers due to its AllTrips Executive travel insurance policy with coverage for lost, stolen or damaged business equipment and rental car insurance. Earning 4.1 out of 5 stars, our expert reviewers think Allianz is a great choice for international travel insurance.

When should I buy travel insurance? ›

In general, you can buy coverage any time before the date of your trip. That said, it's always best to buy coverage as soon as you make your reservations. The sooner you buy travel insurance, the sooner you'll be protected and the more benefits you may be eligible to receive.

Does travel insurance cover 100%? ›

If all conditions are met, most of the policies will reimburse you 50% to 75% of your trip costs, unless otherwise noted.

What are the best travel medical insurance companies? ›

Based on our comprehensive review, the companies offering the best travel medical insurance are Faye, IMG, Travelex, AIG Travel Guard and Allianz. Travel medical insurance is a specialized type of coverage that helps pay for medical bills and emergency evacuations if you're hurt or become sick while traveling.

What is not covered by Allianz travel insurance? ›

Claims due to known, foreseeable, or expected events, epidemics, government prohibitions, warnings, or travel advisories or fear of travel are generally not covered (coverage can vary by state.)

What are the advantages and disadvantages of traveling alone? ›

Pros and Cons of Traveling Solo
  • PRO: Traveling solo liberates you!
  • Con: You cannot share your excitement!
  • Pro: You're becoming a stronger person while traveling solo.
  • Con: There's nobody to help you out!
  • Pro: You get to meet new people!
  • Con: Solo travel can be expensive.
  • Pro: Traveling solo gives you time to think.

What are the two basic types of travel insurance? ›

What type of travel insurance do I need? There are two main types of travel insurance: trip protection plans and travel medical plans.

What are the disadvantages of life insurance? ›

Disadvantages of buying life insurance. It can be expensive if you're older or have health conditions. Whole life insurance can be unaffordable in the long run. Cash value can be a weak investment tool.

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