What to know about travel insurance to decide if it's right for you on your next trip

• Travel insurance covers various risks like trip cancelations, health emergencies, and theft.
• If you've prepaid for your trip and it's non-refundable, travel insurance probably makes sense for you.
• Travel insurance costs can range from as little as 4% to as much as 12% of your total trip cost.

Vacations can be very expensive. If you're paying a lot for yours you might be wondering if you should purchase travel insurance, especially when some of the costs are nonrefundable.

The answer isn't always cut-and-dried. Travel insurance isn't necessary for everyone. Whether you need it will depend on a variety of factors. Here are some key points to consider when deciding if travel insurance is right for you.

Why should you get travel insurance?

When planning a trip, it's essential to think about how you'll protect yourself from the unexpected. That's where travel insurance comes in. It can cover various risks like loss of personal belongings, checked baggage, and more. With the appropriate coverage, you can prevent or mitigate the potential losses.

"Plain and simple, travel insurance is a layer of protection against financial loss," says Brad Cummins, owner and principal agent for Insurance Geek, an insurance comparison platform. "Whether it be lost luggage or a lost passport, travel insurance will cover the extra costs during these unfortunate events."

One of the top reasons to acquire travel insurance is for trip cancellation coverage. When cancelling a trip due to a covered cause, this type of insurance will reimburse you for prepaid, nonrefundable expenses. 

Another important reason is for medical emergency coverage. Most US health insurers don't provide coverage when you're abroad. A comprehensive travel insurance plan will cover you in the event of an unexpected accident or emergency. And because the cost of medical care can add up quickly, the price you'll pay for insurance can bring peace of mind while traveling.

Do I need travel insurance? 

There are many things to consider when deciding if you need travel insurance. The first is how much of your trip is already paid for. If you've prepaid for most or all of your travel expenses, you may want to purchase travel insurance in case you have to cancel. 

Another thing to consider is where you will be traveling. If you are visiting multiple countries, it might be a good idea to get insurance that covers you in all of them.

Additionally, your age and overall health can play a role in whether or not you need travel insurance. Suppose you are older or have pre-existing medical conditions, for example. In that case, it might be a good idea to purchase travel insurance in the event you need to cancel your trip or if you incur unexpected medical expenses. 

Lastly, the value of your luggage can also be a factor to consider. If you plan to bring expensive items with you on your trip, it might be worth purchasing travel insurance to cover lost or stolen luggage.

There are also some situations in which you might not need travel insurance. 

For example, if you are traveling within the US, you do not need travel insurance for health reasons since most health insurance plans will cover you while you are away from home but still in the US. 

Another reason you might not need to purchase more coverage is if you have a credit card that provides travel insurance benefits. And those who are comfortable taking on the financial risk of traveling without insurance might not need to buy a policy.

Is travel insurance worth it?

If you're wondering whether travel insurance is worth it, you're not alone. And there are a few things to consider. If an emergency arises on your trip, travel insurance can reimburse part or all of your vacation expenditure. However, this will depend on factors such as the type of trip you're taking and whether it's refundable.

Travel insurance may be a wise investment if you've already paid for your holiday and can't change or cancel your trip without penalty. Suppose your trip is cancelled or disrupted due to a covered cause. In that case, travel insurance will cover the trip's cost and any other non-refundable expenditures up to a pre-determined amount.

If you're heading to a country where your health coverage doesn't apply, or if you don't have any health insurance at all, travel insurance might provide the protection you need. Travel insurance can also assist you in case of medical emergencies. It's vital to understand that not all travel insurance policies are created equal. Be sure to carefully study the details and understand what is and isn't covered before purchasing one.

In general, travel insurance is worth it if you're concerned about losing money if your trip is called off or delayed or if you're worried about medical bills while traveling. However, it's critical to conduct thorough research and understand the coverage provided before purchasing a policy.

How much does travel insurance cost?

The average cost of travel insurance is 5%-6% of your total trip cost. However, the exact cost will vary based on factors such as your age, travel destination, and where you live, and can be as little as 4% of your trip cost or as high as 12% of your trip cost.

For example, older travelers or those with pre-existing medical conditions may pay more for their insurance. Similarly, those traveling to high-risk destinations or participating in high-risk activities may also face higher premiums. 

Ultimately, it's important to shop around and compare quotes from different travel insurance companies to find the best coverage and rate for your needs.

Is travel insurance easy to buy and use?

Buying travel insurance can be a pretty quick and painless process, thanks to insurance aggregator sites like SquareMouth.

Using SquareMouth is one of the easiest ways to see multiple coverage options at once. Once you've entered some personal details and information regarding your trip, you'll see a variety insurance providers and plans from which to choose.

When it comes to travel insurance, the ease of use will depend on the provider you choose. If you're working with a reputable insurer, then the process should be relatively straightforward. However, it's still important to understand what is and isn't included in your policy before you purchase it. This way, you can be sure that you're getting the coverage you need and that you won't be caught off guard by any fine print.

How to find the best travel insurance policy

There are a few key things to consider when buying a travel insurance policy. The cost of the policy is one factor, but it's also important to look at the coverage limits and what is included and excluded in the policy. Be sure to read the fine print carefully and compare policies between different companies. 

It's also important to consider the purpose of your travel insurance policy. If you're going on a trip where you'll be doing adventurous activities, make sure that your policy covers those activities. And finally, remember that travel insurance is there to protect you in case something goes wrong on your trip, so don't hesitate to use it if you need to.

If you decide that you do need travel insurance, here few things to keep in mind when shopping for a policy:

• Read the fine print of any policy you are considering to understand what is and is not covered. This is especially important for those who want to add special coverage options. 
• Compare policies from different providers to find the best coverage at the best price.
• Purchase your policy well in advance of your trip so that you are covered in case of any unforeseen circumstances.
• Ensure you're covered for pre-existing conditions because a number of policies will exclude pre-existing conditions if you don't pay extra for a waiver or additional coverage. 

The bottom line

Travel insurance isn't necessary for everyone or every trip. But it can bring a lot of peace of mind during your travels and can certainly translate into significant savings if you're faced with a medical emergency while on your trip. It's best to do your research, compare plans, and understand your own level of risk when it comes to deciding whether or not to purchase coverage.