Travel Insurance

Should You Save the Money to Purchase Travel Insurance?

Feb 20, 2020
Empower Insights

Here’s what you need to know before you hit “accept” on that policy

You’ve chosen your destination, confirmed your travel dates and figured out where you’re staying. But before you start packing your bags, there’s one more important factor to consider: travel insurance.

Insurance can cover minor inconveniences such as trip cancellation or lost luggage, as well as major emergencies like personal illness and injury. As a general rule, travel insurance is worth buying when your pre-paid or nonrefundable purchases add up to more than you’re willing to lose.

Following are some handy guidelines to consider as you make plans for your next great getaway:

When to buy travel insurance

Expensive international travel

Say you book a week at a five-star resort in the Caribbean. The costs you’ve paid in advance — resort and transfer fees, flights and pre-planned activities such as deep sea fishing — could hit five figures. But what if a hurricane strikes, causing the country to temporarily shut down tourism? If you’ve purchased a travel insurance policy before the storm is known to the public, you can file a claim and get reimbursed for your pre-paid expenses. If you’re traveling to a region that’s prone to natural disasters, check for storm warnings and be sure to buy insurance as soon as you book your trip. (If you use a site like Travelocity or Booking, you might even be able to buy a policy in the same transaction along with your flights.)

Adventure travel

Travel insurance is important for your physical safety, too. If your trip includes physically challenging or off-the-beaten-path excursions like ziplining, whitewater rafting or mountaineering, you may want to buy an insurance policy that covers medical evacuation, hospitalization and emergency transportation. Each destination and activity carries different risks — be realistic about your physical capabilities and find a policy that covers unexpected accidents related to what you have planned.

Check for storm warnings when traveling to certain regions


When to skip it

Short, inexpensive trips

If you’re driving a few hours for a weekend getaway and your expenses consist of gas, groceries, a dog sitter and two nights in an Airbnb, it’s probably not worth paying for coverage. In fact, it could cost more just to buy insurance than you’d receive from any claim you might need to file. The same might be true for short-haul domestic flights. In that case, check if your airline offers points or credit toward another flight if they’re responsible for a cancellation or disruption.

You already have good coverage

The last thing you want is to spend money unnecessarily that could otherwise go toward your vacation — or your savings account. Compare your vacation needs with the coverage you currently receive through medical insurance, car insurance and even credit cards, which may offer reimbursement for flight cancellation, lost luggage or rental car services when you book with the card. If your current policies meet your needs, you may not need any additional coverage.

The bottom line:

Travel insurance provides peace of mind, but more is not always better. Match your needs with the appropriate level of coverage based on your travel plans — and then enjoy your trip.

Save for your next trip with an Empower Investment Account

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