Is Travel Insurance Worthwhile?

A reader wonders, is travel insurance worthwhile? Emma Patch of Kiplinger’s Personal Finance considers the question, primarily considering flight cancellations.

Question: International flights are so expensive these days. Is it worth buying travel insurance if for some reason I can’t make a flight?

Answer: If you’re mainly worried about losing money on costly international flights, think again before you pay to insure them. That also goes for travel insurance plans offered at checkout when purchasing a plane or train ticket. Although it may seem like a small expense in exchange for the added flexibility, keep in mind that most airfares already have built-in flexibility.

Major U.S. airlines made permanent changes during the pandemic, allowing flexible bookings for most tickets. That means you won’t have to pay a fee if you need to change your flight — if you don’t buy the cheapest fares. (Southwest allows free changes for all tickets.)

Also, some travel providers offer flexibility on bookings made within a certain time. For instance, the major airlines and Amtrak offer a refund in the first 24 hours after a booking if you must cancel or change your itinerary.

Plus, when an airline cancels your trip — as long as the flight is arriving at and/or departing from a U.S. airport — you are legally entitled to a refund, per U.S. Department of Transportation regulations. An airline will often automatically issue a credit or voucher for a canceled flight, but be sure to request a refund if that is what you would prefer, as is your right. Also, if there has been a substantial schedule change (typically of two hours or more) and you decide not to take that flight, you are entitled to a refund of your fare.

Of course, travel insurance covers more than canceled flights. Whether you should purchase a policy depends on if you’ll have to pay a lot out of pocket if you must cancel or postpone your plans. And you need to weigh those costs against the price of insurance.

According to data from SquareMouth, a travel insurance comparison site, the overall average cost among all single trip travel insurance policies purchased on its site in 2023 was $283. Comprehensive travel insurance policies averaged at $403, while medical-only policies cost on average $96.

The amount you pay for a policy depends on several factors — the length of your trip, the number of travelers you need to insure, and even how old you are. A better estimate is 4% to 11% of the total cost of a trip, experts say.

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Emma Patch is a senior writer at Kiplinger Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.

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