Is Travel Insurance Worth It?

I’ll be upfront that I’m not a fan of travel insurance, period.  I used to think that if you buy travel insurance, you are basically flushing money down the drain.  In truth, I think it is still true as most people go on trips without major incidents.  The premium that you pay towards a travel insurance could have gone towards trip expenses. Given this stance, it may seemed contradictory to share that I often get travel insurance for international trips.

What changed my mind?

Some years ago, I was traveling abroad when a health issue cropped up with a traveling companion.  It was significant enough that it disrupted the rest of the itinerary, and we needed to head back to the states as soon as possible. Our onward flights had to be cancelled. Financial losses were taken in the form of non-refundable hotel rooms, change fees, and the premium costs of buying last minute tickets.  It was a bit of an ugly mess, but it made me realize one thing:

Nobody wants to think about the worst case scenario when they plan for travel.

It’s understandable. Who wants to think about what could go wrong when you’re excitedly planning for a trip? Like missing a connecting flight, or somebody getting seriously ill, or an accident resulting in bodily injuries or even death?

Yet, the reality is that these things happen. Just like car or home insurance, you don’t want to pay the premiums but you are glad to have purchased insurance if and when you need coverage. Travel insurance is the same way. In the past, I simply travel with the hopes that the trip would go smoothly. At best, I was hedging the risks. At worst, I was ignoring the potential of things going awry. They are both a little naive, but things worked out for the most part.

Figure out your travel insurance needs

I am far more proactive when it comes to travel insurance these days. For me, I’m less concerned about travel specific coverage as most credit cards offer basic travel related coverage. What matters more to me is the health and well-being of the people I travel with, so I generally focus on getting primary medical coverage when I travel abroad.

I emphasized “traveling abroad” because the medical coverage is typically a non-issue when traveling domestically. If traveling internationally, I’d rather not deal the ambiguity of whether some medical expenses are covered — not only in terms of doctor’s visits but also medical transport should the need arise.  After all, the cost of medical expenses is frightening — who can reasonably afford medical care without health insurance these days? (And this is coming from someone who used to work in the healthcare industry).

Where to look for travel insurance

I always start my travel insurance search on insuremytrip.com (note: I have no affiliation with them whatsoever).  The website is a travel insurance consolidator of sorts, so I find it easy to search on the site and filter the results with side-by-side plan comparisons.  I generally go with the plan that provides the “best value”, which means a reputable company that provides the desired coverage and competitive pricing.

Is travel insurance a good investment?

Generally speaking, I don’t consider travel insurance to be an “investment” at all.  I see it more as a sunk cost. However, just like all other insurance offerings, it’s a form of risk management. You can never really predict when something happens — sometimes a perfectly healthy person could fall ill when you least expect it. People have various comfort levels around risks, and for me, I’d rather that there is some risk management in place than none at all.  In that way, I tend to see travel insurance as part of the “built-in” cost of traveling internationally.

Do you usually buy travel insurance when you travel abroad?  Have you ever had to make use of the travel insurance and is it an easy process?  Or did you ever had an experience when you did not purchase travel insurance but wished you did?