Wondering about travel insurance advantages and disadvantages? Do you really need it?
If you’re about to embark on a trip, you’ve probably heard someone tell you you should get travel insurance to cover getting sick or having a canceled flight ruin your vacation.
Or maybe you’ve had someone tell you not to waste your time getting travel insurance. They had travel insurance on their trip to Mexico and it didn’t even cover their camera getting stolen.
It’s true that there are travel insurance advantages and disadvantages. I’ve traveled to over 50 countries solo, with friends and family, and with students, so I’ve had a few experiences with the unexpected. Let’s just say I never want to find myself in a rural Vietnamese hospital again…
My personal opinion is that travel insurance is important for the vast majority of travelers. That being said, it’s not a perfect product and there are some major issues with coverage.
I put together this post to inform travelers why they should or shouldn’t get travel insurance.
Note: This post contains affiliate links. If you make a purchase you’ll be supporting this blog at no extra cost to you. Thanks!
What is travel insurance?
Travel insurance is insurance for a trip that you are taking, usually out of the country. It usually covers a specific period of time and can protect you from losing money when things go wrong, for example when your flight is canceled and you have to stay in a hotel or when your luggage is lost.
Travel insurance can also contain medical insurance when you are traveling in other countries. This can cover the fees of seeing a doctor when you need medicine, an emergency hospital visit, or even emergency evacuation back to your home country.
Disadvantages of Travel Insurance
You May Not Need It
The most obvious disadvantage of travel insurance is that you may not need it. Like any insurance, you are paying for protection in case something unexpected and negative happens.
Could something unexpected happen? Definitely.
Is something unexpected actually going to happen? Probably not.
So, you will likely be paying for something that you don’t actually need to use.
Comprehensive travel insurance can be quite expensive. Coverage for a month of travel can run over $250 USD depending on your age and what countries you are visiting.
This is a large expense that you may not have budgeted for when you started planning your vacation.
Buying travel insurance may require you to cut out another part of your vacation to save money.
You Have To Buy Coverage Before Your Trip Starts
Many companies require you to buy coverage before your trip starts. You also may be required to buy it from your home country.
This is fine if you have a specific trip that you’ve planned in advance, but if your plans are last minute or if you aren’t sure where you will be in two months it makes things difficult.
This is especially difficult for digital nomads and people who are location independent and move around a lot.
SafetyWing is one company that overcomes this roadblock because you can buy their insurance at any time and from any place. They are great for digital nomads and travelers with an open itinerary.
SafetyWing provides some of the most affordable insurance available if you are looking for basic coverage.
Insurance is more expensive for older people. Even if you are healthy, if you are over 55 you’ll be paying more than someone who is 25.
Some programs will not cover anyone who is past a certain age.
No Coverage for Pre-existing Conditions
If you have a pre-existing condition, most plans will not cover treatment for that condition or anything else that is caused by that condition.
Let’s say you dislocated your knee years ago and while you are traveling that same knee swells up and sends you to the doctor. Your visit probably wouldn’t be covered, as you’d had previous knee problems.
No Coverage for Specific Activities or Events
So many travelers had travel horror stories during March 2020 when they were forced to change plans because of border closures. Many insurance companies had policies that did not cover pandemics, so some travelers’ insurance was essentially useless.
It was a good wake-up call for tourists to make sure to check what is covered and predict what coverage you absolutely need, depending on your travel and lifestyle.
Travel insurance policies vary widely. Generally, the more expensive, the more they cover.
In addition to scenarios that are just not covered, often the policy does not provide enough coverage for a traveler’s needs.
Imagine this scenario: your backpack is stolen. You had your cell phone worth $1000 US and your computer worth $2500 in it.
You have travel insurance (yay!) so you assume you’ll get reimbursed for the value of your belongings, or $3500. When you read your policy closer, it only reimburses $500 per item, up to $5,000 total. This means that you will only get $1000 for $3500 worth of belongings. Bummer.
This disadvantage of travel insurance can be avoided if you make sure to read your policy carefully and decide what your belongings are worth and how much they should be covered for.
Americans and Travelers to the United States
Travelers to the United States will find that travel insurance is especially expensive because the cost of healthcare is so expensive in this country. Some international insurance programs will not cover travel to the U.S. or will charge extra to travel there because the cost of claims is so high.
Americans do not automatically have health insurance from the government. It can be complicated for Americans who travel for part of the year outside the U.S. to find the insurance they need.
Advantages of Travel Insurance
Entry to certain countries
There are dozens of countries that require travel insurance to be able to enter. Many of these requirements were added during the pandemic.
Some countries might say they require travel insurance but not actually require you to show it.
Other countries might make you upload proof of insurance before you even leave the country. Either way, if the official requirements include travel insurance, you should have it.
When I entered Chile in December 2022 I was required to show proof of insurance that covered covid-19 to the airport staff. I was very glad I had taken the time to get the insurance that was required.
Participation in certain tours
Many group tours require you to get travel insurance. For example, the 1-12 month Remote Year program that I’ve participated in requires participants to upload proof of their travel insurance.
Intrepid Travel, a popular tour provider with tours worldwide, also requires travel insurance. They say “Your travel insurance must provide cover against personal accident, death, medical expenses and emergency repatriation with a recommended minimum coverage of US$200,000 for each of the categories of cover. We also strongly recommend it covers cancellation, curtailment, personal liability and loss of luggage and personal effects.”
Purchasing travel insurance opens the door to be able to travel on many group tours.
Emergency Medical and Evacuation Coverage
Imagine you are in a bad ski accident in Switzerland and you have to be taken to the hospital by helicopter. This incident would cost you tens of thousands of dollars and could bankrupt you if you don’t have emergency medical coverage from your travel insurance.
Make sure that when you buy a policy you look at which specific high-risk activities are covered. Skiing is just one activity that isn’t covered by all policies. If you’ll be doing any sports or activities that are not on the average traveler’s list, make sure your policy covers it. If the activity isn’t covered you’ll want to get a different policy or reconsider participating in that activity on your trip.
World Nomads is a company that offers two different plans with different levels of coverage. Their top plan covers activities that most other companies don’t, like ballooning, cliff jumping or shark cage diving.
Let’s face it, if you are going to get injured it will probably be during a high-risk activity, so be prepared with the necessary coverage.
Trip Cancellations, Interruptions, and Theft
In addition to medical coverage, trip insurance can provide financial reimbursement when things go wrong.
If your flight is canceled, you crash a rental car or your luggage is lost, trip insurance can cover it. You may even be entitled to receive money if your flight or luggage is delayed.
If something does happen, make sure to check your policy right away to see what type of incident verification you’ll need. You’ll often need to file a police report or get an official document from the airlines.
It can be complicated to prove that something happened, but getting a claim reimbursed is definitely worth it!
Peace of Mind
Hopefully, you will never actually need to use your trip insurance because all your trips will be smooth and injury free. But, like all insurance, travel insurance gives you the peace of mind that you will be covered if bad things happen.
It’s invaluable to know that you will have someone to call if something goes wrong when traveling and that you won’t be financially responsible for a huge bill.
For most travelers that peace of mind is worth a small fee.
Hopefully, this post has given you some things to think about when evaluating if you need coverage for your trip by telling you travel insurance advantages and disadvantages.
The bottom line is to gauge yourself, your travel plans, and your belongings to decide if you need travel insurance and buy the policy that covers what you need if you do.
Interested in more ways to travel better? Check out this post about award travel with points and miles.