Is Travel Insurance Worth It? Here’s When You Should Definitely Purchase It

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There's a lot of time and money that goes into planning a vacation, especially if you're flying somewhere, and especially if you're heading to another country. You have to book flights, hotel rooms, tours and experiences, and sometimes even train tickets and car service. Before you know it, you've racked up a considerable amount of money on your credit card, which can feel daunting. And each and every time you book something, you probably get the same question at checkout: do you want to add travel insurance to that? The question is often linked with some pretty persuasive statements (some booking sites will remind you that you're "risking" your trip if you don't purchase it) that can leave you second guessing yourself. But is travel insurance actually worth it?

In theory, it seems like travel insurance is a no-brainer. For an extra fee, you should be saving yourself from losing a lot of money in the long run. But the thing is, the fee for travel insurance adds up. Sure, sometimes, it's just a few dollars to add onto your flight or hotel booking, but for larger trips it can be a decent chunk of change. Considering the cost involved, it's worth looking into whether or not buying extra insurance for your vacay is actually necessary.

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Here's the thing: travel insurance often isn't as necessary as it seems, or as websites and companies make it seem. An analysis by Consumers' Checkbook found that travel insurance usually isn't worth it. The site looked into the various types of travel insurance and discovered that many of the policies being pushed by airlines, travel companies, hotels, and cruise lines aren't actually worth the extra money because they don't cover what you assume they'll cover.

When it comes to airlines and transportation companies that offer reimbursement for trip interruptions or cancellations (like someone getting sick or missing a flight), Consumers' Checkbook reported: "They might seem like good, sensible buys, but these plans actually provide pretty thin coverage, and most travelers don’t risk much skipping it." The reason? Most of these plans and policies have so many limitations and exclusions that they end up being basically useless. For example, some won't reimburse you if you have to cancel due to an illness caused by a pre-existing condition, or if your trip gets messed up because of a natural disaster. They basically don't cover the majority of the most common reasons you'd need to use travel insurance, which is beyond frustrating.

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In 2018, the office of Senator Edward Markey (D-Mass) released a study on travel insurance. It stated, "The only thing skimpier than airplane legroom are these travel insurance plans." The report looked at plans offered by 16 airlines and travel-booking websites, and found that they failed to provide the coverage promised, and that they also exploited travelers as "an easy revenue generator."

If you're intent on getting travel insurance, you should really look into the policy being offered to you. Read the fine print, pay attention to the exclusions, and really think about if it's something you'll need or not. If you find that any reason you may need to cancel isn't covered, then what's the point?

Another option is to get a travel credit card that offers insurance, which is often more reliable and more helpful. For example, Chase Sapphire Preferred offers trip insurance on purchases made with the credit card — and you don't have to pay more than a $95 annual fee for the card.

The lesson in all of this? Be mindful of the policies being offered, and do your research before paying for anything. There's no reason to spend unnecessary money when traveling.