Travel insurance: when it's worth it and when it isn't

Travel insurance is sold in the worst possible moment: a checkbox at checkout, priced at 'only' 5–10% of your trip, right when you're excited and want to protect the thing you just bought. Sometimes that checkbox is genuinely smart. Often it duplicates coverage you already have or protects against losses you could easily absorb. The skill is knowing which trip you're booking.

What travel insurance actually covers

• Trip cancellation/interruption: refunds prepaid, non-refundable costs if you cancel for a covered reason (illness, injury, death in family, jury duty — the list is specific and exhaustive).
• Emergency medical: treats you abroad where your domestic health insurance may cover little or nothing.
• Emergency evacuation: transport to adequate medical care — the coverage with the scariest uninsured price tag, easily $50,000–$200,000 for an air ambulance.
• Baggage loss/delay: reimbursement for lost bags and essentials during delays.
• Travel delay: hotels and meals during covered delays.

The two questions that decide it

Question one: how much non-refundable money is at risk? A trip built from refundable hotel bookings and a $300 flight credit has almost nothing to insure. A $9,000 safari or cruise paid upfront has everything to insure. Question two: what would a medical emergency cost where you're going? Domestic trips leave your health insurance intact; international trips — especially remote ones — can leave you effectively uninsured.

Check what you already have first

Many travel credit cards include trip delay, trip cancellation, baggage, and rental car coverage when you pay for the trip with the card — sometimes at levels that make a basic standalone policy redundant. Meanwhile, some health plans do cover international emergencies (check before assuming either way), though usually not evacuation. Ten minutes reading your card's benefits guide can save a $200 policy — or reveal that the card covers trip logistics but leaves a medical hole that a cheap medical-only policy fills perfectly.

Cancel for any reason: the expensive upgrade

'Cancel for any reason' (CFAR) coverage does what standard policies don't — covers cold feet, vague worries, anything. The catch: it typically costs 40–60% more than a standard policy, refunds only 50–75% of the trip cost, must usually be bought within 2–3 weeks of the first trip payment, and requires cancelling at least 48 hours before departure. It's worth considering for expensive trips booked far in advance in uncertain circumstances; it's poor value for routine travel.

1. Total your truly non-refundable costs — that's the number you're insuring, not the whole trip price.
2. Check your credit card's travel protections and your health plan's international coverage.
3. For international trips, prioritize medical and evacuation limits (look for $100,000+ medical, $250,000+ evacuation) over cancellation bells and whistles.
4. Compare on an aggregator rather than accepting the airline/cruise checkout policy, which is often mediocre coverage at a convenient price.
5. Buy within the early-purchase window if you need pre-existing condition waivers or CFAR.

The decision at a glance

A note on how claims actually go, because the buying decision should price it in: travel insurance is reimbursement insurance, and reimbursement runs on paper. You pay the hotel during the delay, keep every receipt, obtain written documentation (the airline's delay confirmation, the physician's note, the police report), file within the policy's window, and wait weeks. Travelers who know this treat documentation as part of the trip — photographing receipts as they go — and get paid; travelers who discover it afterward negotiate with a claims department from memory, and the memory loses. The policy is only as good as your paper trail.

Annual policies deserve a look for anyone taking three or more insured-worthy trips a year. A yearly multi-trip policy with solid medical and evacuation limits typically runs $150–500 depending on age and coverage, versus $60–200 per trip for comparable single-trip policies — the crossover arrives fast. Frequent international travelers for work or family often save hundreds while upgrading their coverage, and the always-on structure removes the per-trip buying decision entirely, which is worth something in itself: the trip you forgot to insure is always the one that needed it.

The bottom line

Skip the reflexive checkout checkbox and ask two questions: how much non-refundable money is at stake, and what would a medical emergency cost where I'm going? Cheap domestic trips rarely justify a policy. Expensive prepaid trips and remote international travel almost always do — and there, medical and evacuation limits matter far more than the cancellation coverage the checkbox emphasizes.