Summer is in full swing, which means it's vacation season. As you think about vacation time, you should ask yourself which expenses are worth the investment when preparing for your vacation. Especially when it comes to travel insurance, you want to ensure 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 travel insurance, and you could quickly acquire more costs than planned.
Allied Market Research reports that the global travel insurance market was valued at $12.38 billion in 2020 and is expected to grow to $119.31 billion by 2030. This rise is partly due to more senior citizens traveling and increased business travel expenses.1 As you might expect, tourism is one of the key factors contributing to this rise. According to The World Tourism Organization (UNWTO), there was a 4% rise in global international tourist arrivals in 2021.2
As you plan for your summer vacation, there are various factors you should consider before investing in a travel insurance policy. While protection is never a bad thing, you want to ensure the coverage's value outweighs the added cost. Travel insurance may not be worth the financial stress for people on a tight budget. However, when it comes to more extended 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 might want to invest in some travel insurance is if you’re taking an expensive vacation that includes non-refundable fees, such as your flight, hotel, and transportation. While your credit card might reimburse you for some of these expenses, you could easily incur costs beyond its limit. Even if your chosen travel provider offers a reimbursement policy, it may not be as lenient and flexible as what you might get with 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 a restriction on when you can cancel your trip, which is not always the case with travel providers.
With more money invested upfront comes more concern about unexpected circumstances or situations inadvertently changing your plans with minimal or no prior notice. Accidents happen, especially when you’re in an unfamiliar place doing activities that you may otherwise not entertain when in your home state. With travel insurance, you’re protecting yourself from thousands of dollars of hospital fees that you could incur if an accident or emergency happens while you’re on vacation. And if you already 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 the cost of a policy could potentially cost more than the trip itself or at least add up to an amount beyond 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 costs if you decide to cancel or at least offer you a 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.
For those with 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 for double the coverage, you could maximize the policies you already have.
When exploring your travel insurance options, you will want to purchase a policy sooner rather than later if you want to avoid a higher premium or reduced policy. If you cannot pay for coverage within 10 to 15 days of booking your trip, it might be best to avoid travel insurance altogether to reduce additional fees and lower-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 be less than what you would pay for a travel insurance policy.
With so many providers out there, you want to ensure that if you get 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.
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