You do not need travel insurance for every trip.
There are cases where insurance is not necessary.
In these cases, buying insurance is a waste of money.
Remember, the decision to buy travel insurance comes down to 2 major factors, and understanding this will help you decide if you need it.
The 2 factors to help you decide if you need it are:
Financial Risk: Are you worried about losing money because of a canceled trip, interrupted trip, lost bags, delayed trip, or medical emergency?
Medical Concerns: Are you traveling outside your home country where your insurance from home won’t cover you for an accident?
Here are 3 times when you don’t need insurance
1. Last-minute domestic trips
Imagine you decide to visit a friend in Florida in a few weeks, so you jump online and find a super-saver last minute fare for $89.
That’s not much money at risk.
If you are taking a last-minute trip in the U.S. you probably don’t need travel insurance.
And since you are within the U.S., your health insurance plan should cover you for any emergency medical situations.
2. Cheap domestic trips
If you get a discount $129 round trip flight and you’re staying with family members, you don’t have much money at risk.
Travel insurance is smart when your pre-paid and non-refundable expenses are more than you are willing to lose.
Imagine investing in a cruise package for $4,000, or a safari for $12,000, or even airfare for your family of six for $2,800.
Any of those losses would hurt if you needed to cancel.
In the case, however, you’re only at risk of losing $129. Maybe not worth it.
Again, you are missing out on coverage for baggage and delays, but these coverages alone might not be worth it.
3. If you can afford to lose your pre-paid trip expenses
If you can afford to lose the money, skip the insurance.
As stated above, travel insurance is best used when your pre-paid and non-refundable expenses are more than you are willing to lose.
If you only have a few hundred dollars at risk, you can afford to “self-insure” this risk.
This is called self insuring because you are taking on the risk of loss instead of passing the risk to the insurance company.
“Ok…when should I buy insurance?”
This is a no-brainer.
Forget cancelled trips for now, if you leave your home country you at least need to make sure you are covered for a medical emergency.
Medical is included in all trip insurance plans, or you can buy a standalone travel medical insurance policy (which does not have cancellation coverage). Click here for more about these types of plans.
When you leave your home country, your health insurance may or may not travel with you. Whenever you are traveling abroad, get either a travel medical plan or vacation plan that includes medical emergencies.
Second, get insurance if you are worried about losing money if you need to cancel your trip.
Imagine you book a cruise and airfare. You pre-pay…and it is non-refundable.
Then, a week before you’re supposed to leave you get sick.
Or your child gets sick.
Or your elderly parent dies.
Or a hurricane is declared.
Or you lose your job
This is when you would want trip cancellation coverage, which is included with a trip insurance plan.
For more reasons to buy travel insurance, check out the following article: