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Protecting your trip with travel insurance is generally a good idea. A comprehensive trip insurance policy safeguards your nonrefundable, prepaid plans (flights, hotel stays and excursions) if the trip is canceled due to a covered reason. It offers reimbursement of medical expenses if you get sick or injured and require care or evacuation. Plus, it provides a daily stipend if your belongings are lost or stolen, among many other needs.
However, just because travel insurance is an option doesn’t mean you should always buy it. You don't want to purchase coverage that you don’t need or already have. Here are some common situations when you can pass on travel insurance and save your hard-earned cash.
» Learn more: What to know before buying travel insurance
You booked flexible airline tickets
Generally, refundable plane tickets are more expensive than nonrefundable tickets. However, airlines have significantly loosened their change and cancellation policies in recent years.
Many airlines have permanently removed change fees, and depending on the fare type, new and existing reservations can be canceled for a full refund or an airline credit. So, if your flight has a flexible cancellation policy, you may not need a trip cancellation benefit, which is one of the main elements of standard travel insurance.
Additionally, to use the trip cancellation benefit, insurers typically require that you first contact the airline for a refund. If the airline offers you a flight credit or voucher, you’d have to decline it in order to claim a refund under your travel insurance policy. If you accept the credit or voucher, the insurer will consider that a refund by the travel provider. So even if you have insurance, it may not help you in these instances.
Even trip insurance for nonrefundable tickets only works in covered situations. If you want to minimize limitations and maximize flexibility, consider purchasing a plan with a Cancel For Any Reason add-on.
Your hotel has a friendly cancellation policy
Hotels have also loosened their change and cancellation policies for new and existing reservations in response to the ongoing pandemic. If the hotel you want to stay at offers a flexible change or cancellation policy, you may not need travel insurance — especially if the sole purpose of the policy was to protect a prepaid hotel deposit.
You haven’t booked nonrefundable activities
A comprehensive travel insurance plan protects your nonrefundable reservations, which can include prepaid excursions in addition to airplane tickets and hotel stays. If your trip doesn’t involve any nonrefundable reservations, you may not need travel insurance.
For instance, if you’ve booked only airplane tickets and a hotel stay for your vacation, and they're both governed by flexible cancellation policies, the trip cancellation benefit may not be necessary. Or if an activity you’ve booked with a specific provider has a flexible cancellation policy of its own, standard travel insurance might be worth skipping.
» Learn more: The majority of Americans plan to travel in 2022
It’s already included on your credit card
You may not need travel insurance if you already have it through your credit card. Many premium travel credit cards offer various degrees of travel insurance benefits, such as trip cancellation and interruption, travel medical, emergency evacuation, 24-hour assistance and rental car coverage.
Some credit cards have better protections than others because of more robust coverage and higher limits. If you hold a card that offers the benefits you need and the limits are sufficient, you might want to pass on purchasing a comprehensive trip insurance policy.
Generally though, the travel insurance benefits offered on credit cards aren't as extensive, and the limits can be significantly lower than on comprehensive policies. If you have a premium travel credit card, check which travel insurance benefits you already have before buying a stand-alone policy.
» Learn more: 4 best credit cards for travel insurance benefits
When travel insurance is worth it
There may still be instances when travel insurance is a smart money move.
International trips. For example, if you have medical insurance, it most likely won't cover travel outside of the U.S. If you’d like medical coverage while on an international vacation, purchasing a stand-alone travel medical insurance policy could be a good option.
Multi-country, multi-activity trips. Travel insurance can also make sense if your trip includes several destinations and mixed plans. Let's say you’re going on a two-week trip to Argentina to hike in Patagonia and then wrap up in Buenos Aires. If, halfway through the trip, you fall and sprain your ankle, you may need emergency medical care, and perhaps also to cut your trip short and fly home early. In an event like this, trip interruption and emergency medical coverage (both part of a comprehensive travel insurance policy) are your best friends. Trip interruption coverage will reimburse you for the unused portion of your hotel stay in Buenos Aires (which you may not be able to cancel mid-trip) and a last-minute flight home. And the medical benefits will reimburse international health care bills.
Adventurous travelers. If your travel plans include several adrenaline-pumping activities, such as wakeboarding, mountain biking, scuba diving or bungee jumping, a plan that covers adventure sports might be wise.
Trips that require expensive equipment. If you need to take expensive jewelry, sports equipment or tech gear on a trip, you might be wise to back up your trip with travel insurance coverage.
» Learn more: The best travel insurance companies
The bottom line
Deciding whether or not you need to purchase travel insurance depends on your specific circumstances. First, familiarize yourself with the change and cancellation policies of your hotel, airline and activities.
Then, check the benefits of any credit cards you already have and read the fine print so you know what coverage you have access to. With this information, you can make the most informed decision about what travel insurance policy (if any) is right for you.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card