Is Trip Insurance Worth It?

Buying trip insurance is a way to safeguard your travel investment and provide for unforeseen circumstances. Knowing whether or not trip insurance is worth it for your circumstances depends on the type of coverage you are looking for.
Cancellation Insurance
Travel cancellation insurance isn't worthwhile if your investment is minimal. If you paid with your credit card and your trip was canceled by the company rather than by you, it will refund your money anyway. If you pay for a first-class flight or a luxury cruise and you have to cancel your trip, you may not get any refund at all, especially if it is within a few days of your departure time. Always read the fine print of all travel and trip insurance documents very carefully, because refund policies vary widely.

Many different events can be covered under trip cancellation insurance. If you cancel a trip due to illness you won't get a refund without trip cancellation insurance. If your insurance has a pre-existing condition clause, your insurance may not refund your money if you have visited the doctor in the last 90 days. You will want to purchase cancellation insurance within a week or two of the initial payment on your trip so that the insurer will waive pre-existing condition clauses.

If the airline or cruise line goes bankrupt, you will get your money back if you buy trip insurance. If your flight is canceled or severely delayed, you may get compensated for food and lodging. If you decide not to travel due to a terrorist attack on your destination, that may be covered.

Don't buy trip insurance from the company you're traveling with because if that company goes under, your coverage may go with it. Use a third-party trip insurance company.

Medical Insurance
Your medical insurance may not cover you at all if you're traveling internationally, and if it does, you may be looking at high deductibles and exclusions. The most important aspect of medical coverage for your trip is medical evacuation. If you are injured while traveling in an area far from advanced medical facilities, you will need to be airlifted, which is very costly. You may need special transport to return home as well.
Baggage Insurance
Airlines provide only minimal coverage for lost baggage, with many items excluded from coverage. If you declare excess valuation at the ticket counter, you can purchase added coverage. Be aware that if you have a connecting flight with another airline, you must recheck your bags and declare excess valuation again. Your homeowner's policy may include some high-ticket items, such as jewelry, but you must check your policy.
Resources
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evacuation insurance
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trip cancellation insurance
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vacation insurance
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excess valuation
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Nine Reasons to Buy Travel Insurance
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Yes, Sometimes You Do Need Insurance
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Trip Insurance Comparisons
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Medical and Accident Insurance