Planning a vacation takes a lot of time and money, especially when you're flying somewhere, and especially when you're going to another country. You have to book flights, hotel rooms, tours and experiences, and sometimes even train tickets and car services. Before you know it, you've accumulated a large amount of money on your credit card, which can be daunting. Every time you make a reservation, you'll likely encounter the same question at checkout: Do you want to add travel insurance to it? This question is often tied to some pretty convincing statements (some booking sites will remind you that if you don't buy it, you'll be "risking your trip") that may make you second-guess yourself. But is travel insurance really worth it?
In theory, travel insurance seems like a no-brainer. By paying the extra fee, you should be able to avoid losing a lot of money in the long run. But the problem is, the cost of travel insurance can add up. Sure, sometimes it's just a matter of adding a few dollars to your flight or hotel reservation, but for larger trips, it can be a nice chunk of change. Given the costs involved, it's worth considering whether additional insurance is actually necessary for your holiday.
Here’s the thing: Travel insurance is often not as necessary as it seems, or as the website and company makes it seem. An analysis by Consumers' Checkbook found that travel insurance is generally not worth it. The website looked into various types of travel insurance and found that many policies offered by airlines, tour companies, hotels and cruise lines aren't actually worth the extra money because they don't cover what you thought the coverage would cover.
When it comes to airlines and transportation companies offering compensation for travel interruptions or cancellations (such as if someone gets sick or misses a flight), Consumer Checkbook reports: “These plans may seem like good, smart purchases, but The coverage these plans actually offer is pretty weak, and most travelers won't risk skipping it." Why? Most of these plans and policies have so many limitations and exclusions that they end up being essentially useless. For example, some airlines won't compensate you if you have to cancel your trip due to a pre-existing condition, or if your trip is disrupted by a natural disaster. They basically don’t cover most of the most common reasons you’d need travel insurance, which is frustrating.
In 2018, the office of Sen. Edward Markey, D-Mass., released a study on travel insurance. It noted that "the only thing tighter than plane legroom is these travel insurance plans." The report examined plans offered by 16 airlines and travel booking sites and found that they failed to provide the promised coverage and that they also took advantage of Travelers as a "simple source of income".
If you are planning to purchase travel insurance, you should carefully research the policies offered to you. Read the fine print, note the exclusions, and think carefully about whether it's something you need. If you find that any reason you might 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 helpful. For example, the Chase Sapphire Preferred offers travel insurance for purchases made with your credit card, and you don't have to pay more than $95 in annual fees for the card.
What’s the lesson in all this? Please be aware of the policies on offer and do your research before paying any fees. There is no reason to spend unnecessary money when traveling.
