Understanding the Value of Travel Insurance

Author: Aly J. Yale, Contributor, CBSNews.com, Managing Your Money Section

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Travel insurance can be a practical investment for many travelers. It provides financial protection against trip cancellations, delays, lost baggage, and medical emergencies. According to SquareMouth Travel Insurance, the average cost for a comprehensive policy is about $457 or roughly 6% of the typical trip cost as of mid-October 2026. Before purchasing, it’s vital to weigh the costs against the coverage provided.

When Travel Insurance Is Worth the Cost

Though travel insurance can be expensive, it can prove invaluable under certain circumstances:

• Medicare or Medicaid Users: These programs typically do not cover medical expenses abroad, requiring separate coverage for international emergencies.
• Limited U.S. Medical Plan Coverage: If your plan doesn’t extend overseas, you need travel insurance to ensure you’re covered.
• Traveling to Areas with Limited Medical Facilities: A medical evacuation plan might be necessary when traveling to regions with inadequate medical care.
• Risk of Cancellations or Delays: Knowing your area or destination is prone to travel disruptions, consider insurance for flexibility and financial protection.
• Pre-existing Conditions or Pregnancy: Specialized medical care required by these conditions may necessitate a travel medical plan if your normal insurance falls short.
• Participation in High-risk Activities: If engaging in activities such as skydiving or scuba diving, ensure your health is covered through insurance.
• Extended Travel Plans: Longer trips carry more financial risk, making travel insurance a prudent choice.

When Travel Insurance May Not Be Necessary

Some situations make buying travel insurance less critical:

• Existing Coverage: If your current healthcare covers international travel and emergencies, additional insurance may be unwarranted.
• Refundable Trips: Fully refundable trips or those with robust cancellation policies might not require extra insurance.
• Coverage Through Credit Cards: Many credit cards offer travel insurance benefits when using them to book travel, potentially negating the need for external coverage.
• Points-based Bookings: Trips booked using award points often allow for point refunds in the event of cancellation or interruption, reducing the need for travel insurance.

Considerations for Purchasing Travel Insurance

Before purchasing, analyze your trip’s unique risks, personal health status, and the specifics of any existing insurance or credit card benefits. Consider potential financial losses if you face a trip cancellation. Additionally, shopping around is crucial as coverage and pricing can vary significantly.

Edited by Matt Richardson