A Simple 7-Step Guide on Choosing Travel Insurance

You just scoped out a vacation to a dream domestic or international destination. It’s time to start booking flights, hotels, and more. You are probably asking a few questions about travel insurance to protect yourself from financial losses before and during your trip. Don’t know where to start? You are in the right place.

Travel insurance is essential for any international travel. However, choosing sufficient coverage without overspending on international travel insurance can be a daunting task. We have summarized our experience and best practice in 7 simple steps to save you time and money on choosing the best travel insurance for your next trip.

Is travel insurance worth it?

Absolutely! Travel insurance is a small investment to protect your vacation trip. Like all insurances, you wish you never need to use it. But when you need it, you will be glad you have it. We used to travel internationally without travel insurance. Not anymore. Recently, a delayed luggage claim payment we received on our Norway trip more than covered what we paid on travel insurance premium.

Do you know that your domestic insurances (i.e. health and auto) are most unlikely to cover you overseas. So, travel insurance is especially important if you plan to travel to an international destination.

Are you really covered? Before the pandemic, only one in five Americans bought travel insurance. Now, more travelers consider protect themselves against travel incidents. With higher travel and medical costs and rising geopolitical uncertainties, it’s never as important as now to protect you and your family and your vacation budget with travel insurance.

How much does travel insurance cost?

The good news is that travel insurance may not be as expensive as you might have guessed. It is a small investment to protect expensive vacations, especially international trips. It’s usually less than 5% of your trip cost (only the non-refundable expenses).

Travel insurance costs vary by coverage, destination, traveler’s age, total trip cost, trip duration, and other factors. Based on our experience, the most important pricing factor is total trip cost. Therefore, it’s important to estimate an accurate total trip cost before purchasing any travel insurance. We will show you how to do so in 7 simple steps at the end of this article.

What does travel insurance cover?

Even though travel insurance varies by plan, in general, travel insurance covers a list of travel-related risks items such as:

• Trip cancellation – only the non-refundable fare of your trip if you or your direct family member experience a qualified emergency event;
• Trip interruption
• Trip delay
• Lost or damaged baggage
• Baggage delay (Which we used on our Norway trip. Very satisfied with the experience.)
• Rental car damage or theft
• Emergency medical
• Emergency medical transport
• Travel accident
• Sometimes, even pre-existing conditions

Choosing the type of travel insurance should depend on each traveler’s situation, a trip’s destination, travel budget, and fare restrictions. A good travel insurance comparison site is a one-stop shop that you need.

What travel insurance would NOT cover?

It can be a general misunderstanding that travel insurance covers trip cancellation voluntarily. If you changed your mind about traveling, most travel insurance will not cover cancellation fees and other financial losses.

However, there is a type travel insurance call CFAR (Cancel for Any Reason) you can purchase. But, it comes with a cost. CFAR insurance is usually very expensive and may not make economic sense for many travelers.

How much does travel insurance cost?

The good news is that travel insurance may not be as expensive as you think. It is a small investment to protect expensive vacations, especially international trips. Travel insurance costs vary by coverage, destination, traveler’s age, total trip cost, trip duration, and other factors. Based on our experience, the most important pricing factor is total trip cost. Therefore, it’s important to estimate an accurate total trip cost before purchasing travel insurance. Here is how we come up with how much travel insurance to buy to avoid paying for unnecessary coverage:

1. Scope out travel plans with flights, hotels, tours, and other transportation methods;
2. Try to book flexible hotels with free cancelation dates as close as possible to checkin dates;
3. Add up all non-refundable expenses you need to book and pay for prior to the trip departure date. This amount will be your “total trip cost”. This is the most important step where most people make mistake by including free-cancelation expenses;
4. Use an online travel insurance comparison site such as Square Mouth to get quotes by entering traveler’s age, destination, and the “total trip cost”. Square Mouth will then list all applicable plans by various insurance providers;
5. The next step is for you to decide what coverages are important to you based on your personal situation and narrow down the search by filters. For example, if you have an active trip planned, you may want to have a solid coverage on medical and accidental evacuation; Since 2020, travel insurance Covid coverage should be considered based on the region you travel to.
6. Finally, you can sort the plans by cost and review rating to select the best plan based on your needs.

When should I purchase travel insurance?

Most airlines offer an option to add travel insurance (through a third-party provider) to your flight when you purchase your ticket. So you may ask: should I buy travel insurance at check-out of my longest and most expensive flight? The answer is no.

If you are not sure about what type of travel insurance to purchase at this point, you don’t have to purchase it through the airline to protect your trip. It’s often misunderstood this insurance would allow you to cancel your flights unconditionally. That’s not the case. You still have to follow the airlines’ cancelation policy. After reading the coverage closely, we realized this option doesn’t have sufficient coverage and can be also much more expensive because of airlines’ markup from the third-party insurance provider.

But, you should not wait for too long after you spend on the most expensive non-refundable items of your trip. Preferably, you should have a good estimate of the non-refundable “total trip cost” by now.

7 Simple Steps to Buy Travel Insurance:

Based on our experience and practice, we summarized these 7 simple steps to help you quickly choose the right travel insurance at the lowest cost for any destinations and vacation types:

1. Scope out your travel itinerary;
2. Try to book flexible hotels and transportation with free cancelation dates as close as possible to check-in dates;
3. Make a list of the biggest cost items such as flights, cruises, ferries, hotels, tours, cars, etc. with estimated cost per item. Mark refundable vs. non-refundable expenses;
4. Add up all non-refundable expenses you need to book and pay for prior to the trip departure date. This amount will be your “total trip cost”. This is the most important step where most people make mistake by including free-cancelation expenses;
5. Use an online travel insurance comparison site such as Square Mouth to get quotes by entering traveler’s age, destination, and the “total trip cost”. Square Mouth will then list all applicable plans by various insurance providers;
6. The next step is for you to decide what coverages are important to you based on your personal situation and narrow down the search by filters. For example, if you have an active trip planned, you may want to have a solid coverage on medical and accidental evacuation; Since 2020, travel insurance Covid coverage should be considered based on the region you travel to.
7. Finally, you can sort the plans by cost and review rating to select the best plan based on your needs.

Do you have good practice and resources you use to book travel insurance? Would love to hear about it!

If you have found this article helpful, please use the Square Mouth link in this article to shop for travel insurance. By doing so at no cost to you, you are motivating us to bring you more practical travel information based on our authentic experience and honest opinions. Thank you!