How to buy travel insurance (and when to skip it)

Buying travel insurance can feel overwhelming, but it doesn't have to be a daunting task. Before you embark on your next adventure, consider the following factors to determine if travel insurance is necessary and which policy best suits your needs.

First and foremost, assess the cost of your trip. If you're only going across town to see family, a standalone policy likely isn't worth the expense. However, if you're investing substantial funds into your trip or venturing abroad, travel insurance becomes a valuable consideration.

Travel insurance primarily protects prepaid, nonrefundable expenses and provides coverage for medical emergencies. It's most beneficial for those embarking on international trips, cruises, safaris, luxury tours, or any vacation where a significant financial loss could occur due to cancellation. Similarly, if you're traveling during hurricane season, visiting a remote location, traveling with young children or elderly relatives, or have preexisting health conditions, purchasing insurance is highly recommended.

Before investing in a standalone policy, it's wise to review what protection you already possess. Your health insurance, credit card, or homeowners insurance might offer benefits that could save you money. Health insurance plans often include some coverage for emergency care within the U.S., while some employer-sponsored plans provide limited international benefits or overseas claims support.

However, it's crucial to check the specifics of your plan, as coverage varies greatly. Older travelers should be particularly diligent in reviewing their health coverage before departure.

Credit card benefits can also provide valuable travel protections. Many credit cards offer trip cancellation, trip interruption, trip delay, baggage delay, lost luggage reimbursement, and rental car damage coverage. Some premium credit cards, such as Chase Sapphire Reserve, even provide emergency medical and evacuation benefits.

However, it's essential to review your card's guide to benefits and understand the coverage limits, as preexisting conditions may not be covered. Keep in mind that credit card benefits are often secondary, meaning they reimburse expenses only after other parties, like the airline or travel provider, have paid.

Lastly, review your homeowners or renters insurance policy. These policies may provide coverage for stolen or damaged belongings while traveling. However, it's important to note that these policies typically do not cover trip cancellation, medical bills, missed connections, or travel delays. Deductibles may be higher than the value of the lost item, and expensive items may have sublimits.

In conclusion, the decision to purchase travel insurance depends on the cost and complexity of your trip, as well as your existing insurance coverage. By carefully evaluating your needs and reviewing your current insurance policies, you can make an informed decision about whether travel insurance is worth the investment for your upcoming adventure.