Will It Pay to Buy Travel Insurance This Summer?
With summer quickly approaching, you may be asking yourself which expenses are worth the investment when planning ahead for vacations. Especially when it comes to travel insurance, you want to make sure you’re not overpaying for protection that may not be 100 percent necessary. Depending on where you’re traveling and how long you’ll be there, taking a trip can eat up a substantial amount of your budget as it is. Add in travel insurance, and you could quickly acquire more costs than you originally planned.
The global travel insurance market was valued at $13.9 billion in 2021 and is expected to grow to $31.3 billion by 2027. This rise is due in part to the rise in online travel bookings, as well as increased business travel expenses. As you may expect, tourism is one of the key factors contributing to this rise. According to the World Tourism Organization (UNWTO), there was a 4 percent increase in global international tourist arrivals in 2021.1,2
As you plan ahead for your summer vacations, there are a variety of factors you should consider before investing in a travel insurance policy. While protection is never a bad thing, you want to make sure that the value of coverage outweighs the added cost. For people on a tight budget, travel insurance may not be worth the financial stress involved. However, when it comes to longer and more expensive vacations, travel insurance could quickly prove to be a beneficial use of your money.
When to Consider Travel Insurance
One of the most common reasons you may want to invest in travel insurance is if you're taking an expensive vacation involving non-refundable fees, such as fees for your flight, hotel, and transportation. While your credit card may reimburse you for a portion of these expenses, you could easily incur costs beyond the reimbursement limit. Even if your chosen travel provider offers a reimbursement policy, it may not be as lenient or flexible as a travel insurance policy. Travel insurance could reimburse you for a myriad of reasons, including unexpected work requirements, illness, and military deployment. Additionally, you may not have restrictions regarding when you can cancel a trip, which is not always the case with travel providers.
With more money invested upfront comes more concern about the chance that unexpected circumstances may inadvertently change your plans with minimal or no prior notice. Accidents happen, especially when you're in an unfamiliar place doing activities you may not entertain in your home state. With travel insurance, you're protecting yourself from the thousands of dollars in hospital fees you could incur in the event of an accident or emergency while on vacation. And if you have a pre-existing condition, travel insurance can help make sure you don't spend an obscene amount of money if your condition worsens during your time away from home.
When to Skip Travel Insurance
If you're someone who enjoys taking shorter weekend-long trips, travel insurance may not be worth it in the long run because a policy could potentially cost more than the trip itself (or at least add up to an amount greater than your total travel expenses). Especially when it comes to plane tickets and hotel bookings, the airline and hotel you choose may be able to reimburse your expenses if you cancel (or at least offer you credit so you can take the trip at a later date). It's important to read the fine print before making these payments in case refunds are limited or non-existent.
If you have car insurance and a credit card specifically designed for travel, you may already be paying for the protection a travel insurance provider could offer. Instead of paying more money for double the coverage, you could instead maximize the policies you already have.
When exploring your travel insurance options, you're going to want to purchase a policy sooner rather than later if you want to avoid a higher premium or reduced coverage. If you're unable to pay for coverage within 10 to 15 days of booking your trip, it may be best to avoid travel insurance altogether to avoid additional fees and low-quality protection.
Evaluate Your Trip Thoroughly Before Committing
While extra protection could provide you with the peace of mind you need to fully enjoy your vacation, depending on the cost of the insurance policy, it may not necessarily be worth your time and investment. Especially if you're going on a relatively short and inexpensive trip within the states, the amount of money you could lose may end up being less than what you would pay for a travel insurance policy.
With so many providers out there, you want to make sure that if you are getting travel insurance, you get the coverage that makes the most sense for you. From the location of your trip to potential medical surprises, it's a good idea to outline your top concerns to determine which policy best suits the needs of both you and your family.
1. BusinessWire.com, July 5, 2022
2. BusinessWire.com, July 5, 2022
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