Is Travel Insurance Worth It? How to Decide for Your Trip
Learning goal: Weigh the cost of travel insurance, typically a small percentage of the trip, against what you could lose, and know when it's likely not worth buying.
Short answer
It depends on what you'd lose. Travel insurance usually costs about 4% to 10% of a trip's price. It's most worth it when you've paid a lot that's nonrefundable, you're traveling abroad where your health plan pays little, or you're going somewhere remote. For a short, cheap or refundable trip close to home, it often isn't.
Read to the end to complete this lesson.
On this page
The Fuller Picture
Iowa's regulator suggests considering it if severe weather could affect the trip, a loved one has a health condition, or you've already paid nonrefundable costs, and says shorter trips close to home do not need travel insurance. Price depends on your age, the destination and length, and the coverage chosen. Compare quotes from licensed providers.
Key Takeaways
- D.C.'s regulator: "Travel insurance usually costs between 4-10% of a trip's price."
- For a $5,000 trip, that's roughly $200 to $500 depending on coverage.
- Iowa: price depends on the traveler's age, destination, trip length, coverage limits and covered reasons.
- Buying soon after booking maximizes coverage, especially for trip cancellation.
- Check existing insurance and credit card protections first.
Real-World Example
Ben and Rae
Ben books a $300 refundable weekend trip two hours away; he skips travel insurance. Rae books a $9,000 nonrefundable tour abroad and has an elderly parent in poor health. A policy costing about 5% of the trip, $450, would protect the $9,000 and cover medical care abroad, so Rae buys it the week she books.
Common Mistakes
- Insuring a cheap or refundable trip.
- Waiting until just before departure to buy.
- Buying a package without reading the covered reasons.
- Not comparing quotes.
Interactive Exercise
Run the Numbers
Compare what you'd lose with what the policy costs.
Arithmetic only, on the numbers you enter. Nothing is estimated.
Knowledge Check
Question: Which trip is generally the strongest case for travel insurance?
Recommended Insurpedia Tools
- Insurance Preparedness Checklist: Twelve insurance questions worth having an answer to, with a place to learn more about each one you have not looked at yet. No score.
Related Insurance Terms
Related Scenarios
Questions to explore next
Questions readers often ask next about this topic:
- Is travel insurance worth it for my trip?
- How much would a policy cost?
- What do I already have through my credit card?
- When should I buy it?
See every lesson in the Travel Insurance course.
Explore the course →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- disb.dc.govTaking a Trip? Information About Travel Insurance You Should Know Before You Hit the Road · District of Columbia Department of Insurance, Securities and Banking
- iid.iowa.govJune Consumer Connection: What is Travel Insurance? · Iowa Insurance Division
Educational information, not advice: This lesson is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers. Descriptions of travel insurance are from state insurance regulators and the Insurance Information Institute. Travel policies vary a great deal; the policy's list of covered reasons and exclusions decides what's paid. Educational information, not advice on a specific policy.