Travel Insurance: What's Worth Paying For and What You Can Skip

Nobody gets excited about buying travel insurance. It’s the line item you stare at during checkout, wondering if you’re being smart or paranoid. The industry doesn’t help — policies are dense, exclusions are buried in fine print, and sales pitches lean hard on worst-case scenarios.

Here’s a straightforward breakdown of what matters, what doesn’t, and how to decide.

The Only Two Coverages That Actually Matter

Emergency medical and evacuation. If you get injured or seriously ill in a country where your health insurance doesn’t work, the bill can destroy you. A broken leg in Thailand, a heart issue in Europe, a car accident in Mexico — these aren’t hypotheticals. Medical evacuation back to the U.S. can cost $50,000 to $200,000 depending on the location and medical needs.

Check your existing health insurance first. Some plans cover emergency care abroad. Medicare generally does not. If you have a premium travel credit card like the Chase Sapphire Reserve or Amex Platinum, you might already have evacuation coverage — but read the fine print. Many cards cap it at $100,000 and exclude pre-existing conditions.

Trip cancellation and interruption. If you’re prepaying thousands for a cruise, tour package, or nonrefundable resort stay, cancellation coverage protects that money. But it only applies to covered reasons: your illness, a family member’s death, natural disaster at the destination, jury duty, job loss. It does not cover “I changed my mind” or “work got busy.” Read the list of covered reasons before buying — if none of them apply to your situation, you’re paying for nothing.

What You Can Almost Always Skip

Baggage coverage. Airlines already reimburse for lost luggage (up to $3,800 on domestic flights, per DOT rules). Your homeowners or renters insurance may cover stolen items even while traveling. Unless you’re checking something irreplaceable, skip it.

Flight delay coverage. Most policies pay $150 to $300 per day after a 6 to 12-hour delay. That’s a meal and a cheap hotel. Airlines often provide meal vouchers and hotel accommodations for long delays anyway. You’re insuring a relatively small expense.

Rental car collision coverage. Your personal auto insurance probably extends to rental cars. Most credit cards include secondary collision coverage. Check what you already have before buying the rental counter’s $25/day policy.

When Insurance Is a No-Brainer

If you’re traveling somewhere with limited medical infrastructure, going on a cruise (where on-board medical bills are separate and steep), or have a pre-existing condition that could flare up — buy the medical coverage. Look for a policy with a “pre-existing condition waiver” and buy it within 14 days of your first trip payment.

If you’re booking a trip that costs more than you can comfortably lose — a $10,000 safari, a $15,000 Antarctic cruise — cancellation insurance makes sense. For a $300 domestic flight and a refundable hotel, it does not.

How to Actually Buy It

Don’t buy from the airline or cruise line. Their markup is high and coverage is thin. Use an aggregator like Squaremouth, InsureMyTrip, or TravelInsurance.com to compare policies from multiple underwriters. Look for policies underwritten by companies with at least an A rating from A.M. Best.

Pay attention to the “free look” period — most policies let you cancel within 10-15 days for a full refund if you read the fine print and realize it’s not what you thought.

Travel insurance is not a scam and it’s not a necessity. It’s a tool with a narrow use case. Use it when the downside is catastrophic, not when it’s inconvenient.