Is Travel Insurance Worth It & Should You Buy?

Travel insurance is worth it if losing your trip investment would cause financial stress or if your health insurance doesn't cover international travel. Medical evacuations from remote areas cost $100,000 to $1 million, and cancellations due to illness, job loss or family emergencies affect millions of travelers each year.

The choice is simple: pay 3% to 8% of your trip cost or risk losing 100% of your investment plus facing medical bills if something goes wrong.

Travel insurance isn't worth it for every situation. Skip it for cheap weekend trips you could afford to lose or when you have excellent health insurance covering international travel.

Cancel for any reason (CFAR) coverage does exactly what it sounds like: cancel your trip for any reason and get 75% of your money back. Expect to pay an extra 3% of your trip cost for this flexibility.

It's worth it if:

• Work might interfere with your trip in ways standard policies won't cover.
• You're worried about safety issues or political instability at your destination.
• Getting 75% back beats losing everything if plans change.
• You're booking when things feel unpredictable, like during a pandemic or economic downturn.

You can skip it if:

• Your trip is cheap enough that losing the money won't hurt.
• You're young and healthy with no family health concerns.
• You're staying in the U.S., and your health insurance travels with you.

Travel insurance isn't necessary for every trip. Skip it in these situations.

1. Your trip is fully refundable: If you can cancel your hotel, flights and activities without penalty, you don't need trip cancellation or interruption coverage. Check your booking terms before buying insurance.
2. You're traveling with carry-on luggage only: Skip baggage coverage if you're not checking bags. You won't benefit from lost or delayed luggage reimbursement.
3. Your health insurance covers international travel: Some U.S. health insurance plans cover medical care abroad. Call your insurer to verify coverage limits and whether you'll need to pay upfront and file for reimbursement later. Medicare doesn't cover international travel.
4. Your trip costs less than you can afford to lose: A $300 weekend getaway where losing the money won't hurt financially doesn't justify a $50 insurance premium.
5. You're young, healthy and traveling domestically: Your regular health insurance works within the U.S., and you're less likely to face cancellation due to health issues. Focus your money on refundable bookings instead.

Many travel credit cards provide trip cancellation, baggage delay and rental car coverage, potentially reducing or eliminating your need for separate travel insurance. Premium cards like Chase Sapphire Reserve and American Express Platinum include coverage that might be sufficient for domestic trips or travelers with strong health insurance.

1. What Credit Cards Typically Cover: Top travel cards offer trip cancellation and interruption coverage up to $10,000 per trip, baggage delay reimbursement up to $100 per day and rental car damage protection. Some cards provide travel accident insurance up to $500,000 or $1 million and trip delay coverage starting after six to 12 hour delays.
2. What Credit Cards Don't Cover: Most credit cards exclude emergency medical coverage or cap it at low amounts insufficient for international travel. Cards won't cover pre-existing conditions, cancel for any reason benefits or high medical evacuation costs. You must book your trip with the card to activate coverage, and some cards only cover round-trip travel.
3. When to Buy Additional Travel Insurance: Credit card coverage works for short domestic trips under $10,000 with minimal medical risk. Buy separate travel insurance if you're traveling internationally, need medical coverage exceeding $50,000, want cancel for any reason flexibility or if your trip costs exceed your card's coverage limits. Travelers over 65 should buy additional insurance since credit cards don't account for age-related medical risks.

Travel insurance covers trip cancellation and interruption, emergency medical expenses, medical evacuation, baggage loss and travel delays. Most plans reimburse 100% of nonrefundable costs for covered reasons like illness, severe weather or job loss.

Common exclusions include pre-existing medical conditions unless you buy a waiver within 10 to 21 days of booking, known events like named hurricanes after they're announced, adventure sports without specific coverage and alcohol or drug-related incidents. Plans won't cover routine medical care or cancellations for reasons outside the policy terms.

See our complete guide to what travel insurance covers for detailed coverage information and policy exclusions.

Travel insurance costs 3% to 8% of your trip value, with age driving the biggest price differences. A 35-year-old pays $80 to $150 for comprehensive coverage on a $2,000 trip, while a 65-year-old pays $300 to $500 for a $5,000 vacation. Basic coverage for a $500 weekend trip costs just $20 to $50.

Ways to Save

Buy your policy within 14 to 21 days of booking and you'll get better rates and unlock benefits like pre-existing condition waivers. Skip add-ons you don't actually need. Get quotes from several companies and check out our guide to the cheapest travel insurance options. If you travel three or more times a year, an annual policy might save you money.

Buy travel insurance if losing your trip investment would cause financial stress or if you're traveling internationally without health coverage. The 3% to 8% cost protects against 100% loss plus potential six-figure medical bills abroad.

Rule of thumb: If the potential loss would hurt financially, insure it. If it wouldn't, skip the premium and self-insure. Buy within 14 to 21 days of booking for the best coverage options, including pre-existing condition waivers and CFAR.

Here are answers to common questions about travel insurance costs, coverage and timing.