Is Travel Insurance Worth It? What It Actually Covers

Travel insurance gets pitched on nearly every booking site as an add-on, which makes it easy to either buy it reflexively or dismiss it as a scam. Neither reaction is right — whether it's worth it depends entirely on how much of your trip is prepaid and nonrefundable, and where you're going.

What It Typically Covers

• Trip cancellation/interruption: reimburses prepaid, nonrefundable costs if you have to cancel or cut a trip short for a covered reason (illness, injury, a death in the family, severe weather)
• Emergency medical: covers treatment abroad, which most U.S. health insurance and Medicare don't pay for outside the country
• Medical evacuation: transport to the nearest adequate hospital or back home — can run $25,000–$100,000+ out of pocket without coverage
• Baggage delay/loss: reimburses essentials if your luggage is delayed or covers replacement if it's lost

What It Doesn't Cover

Standard policies exclude pre-existing medical conditions unless you buy within a short window of your initial trip deposit (usually 14–21 days) and meet a waiver requirement. They also don't cover a simple change of mind — canceling because you no longer want to go isn't a covered reason unless you specifically buy a "cancel for any reason" (CFAR) upgrade, which typically costs 40–50% more and only reimburses 50–75% of your trip cost.

How Much It Costs

Standard travel insurance typically runs 4–10% of your total trip cost. A $5,000 trip might cost $200–$400 to insure; a $1,500 trip might cost $60–$150. Costs rise with trip length, traveler age, and destination — international and adventure travel cost more to insure than a domestic weekend trip.

When It's Worth It vs. When to Skip It

• Worth it: expensive, nonrefundable international trips, cruises, trips during hurricane season, or any trip where a medical emergency abroad would be financially devastating
• Often skippable: fully refundable bookings, short domestic trips, or trips where your existing credit card already includes coverage