Should you get travel insurance for your next trip?
For many Americans planning a summer trip after COVID-19 scuttled vacation season the last two years, there remains a key financial question: Should I buy travel insurance?
Consider a family of four living in Cleveland, Ohio, that must fly to Fort Lauderdale, Florida, to board a cruise bound for the Caribbean. Without trip insurance, if their flight is delayed or cancelled and causes them to miss their ship, they would typically be on the hook for the cost of the cruise and other paid-for activities.
"They won't hold the boat for you, so having insurance for the cost of the cruise is going to be a good use of it. Without it, you would be out of pocket," Scott Keyes, founder of Scott's Cheap Flights, a flight deals site, told CBS MoneyWatch.
Insurance certainly can alleviate stress by providing assurance that a family or individual won't be on the hook financially if their trip is interrupted for a variety of reasons.
"For many folks, it's money well spent if it will provide you with a happier vacation. At the end of day, vacations are supposed to take away your anxieties," Keyes said.
For international travel, the financial stakes can be especially high.
"I can't think of an overseas trip I wouldn't recommend it for, because there is so much potential for something to go wrong," said Michael Giusti, an analyst for InsuranceQuotes.com.
"Used to think it was a waste"
Loosening pandemic restrictions, including nixing a requirement that travelers show proof of a negative test to re-enter the U.S., are also fueling demand for international travel, which is often costly and can require complex arrangements. Yet lingering concerns around COVID-19 also make overseas travel financially risky for individuals without coverage.
Even seasoned travelers who once bypassed trip insurance now say the equation is different.
"I used to think it was a waste and a little bit of a scam and hardly anybody ever used it," said Kathleen Bangs, an aviation expert for flight tracking website Flight Aware. "Now if a family is going to Disney World or Europe, I would recommend it."
One reason insurance may be wise this summer — the soaring cost of airfare. Domestic airline ticket prices have jumped 47% since January alone, according to data from Adobe. Airfares are also up 30% compared to May 2019, before the pandemic.
Meanwhile, airline staffing shortages, reduced carrier capacity, and COVID-19 infections among airline workers have lead to flight cancellations and delays, raising the risk of travel disruptions.
Don't just check the box
Before signing up for any kind of travel insurance, know what it covers. Experts advise against signing up for flight protection plans offered as add-ons at check out on airline and far-aggregator websites.
"Don't just click 'yes' on insurance when you purchase your flight," Keyes of Scott's Cheap Flights said. "Typically because it's right there and convenient, it's not going to be as robust or cover you for as many things, and you don't always know who you're buying it from."
These kinds of policies can be narrow and only cover trips that are cancelled for unforeseen sickness or an injury that prevents the covered individual from traveling.
Know what's already covered
Find out what your existing health and car insurance already cover before purchasing additional coverage. And remember that under U.S. federal law, consumers are entitled to full refunds of ticket costs if a flight is cancelled or significantly delayed.
Also research the protections that your credit card might offer. Generally, credit card issuers will require you to have paid for your flight or hotel with their card to be eligible for reimbursement if your trip goes awry.
"Many cards automatically provide a certain amount of travel protection. Specific provisions range from reimbursement for a hotel, taxis, food, or clothing if a flight is delayed and you miss a connection," Keyes said. "You don't want to pay for things you're already insured for."
Compare plans
Do your research before buying travel insurance. Websites including World Nomads, InsureMyTrip, Square Mouth and Battle Face are trusted by experts and allow you to compare plans and coverage, as well as select add-ons such as "cancel for any reason" insurance.
How much should you spend?
The more your travel insurance policy covers, the more it will cost. Typically, trip coverage policies cost 3% to 8% of the cost of the trip. "Cancel for any reason" insurance usually costs more.
For extra peace of mind, add a a buffer day before, say, a cruise is scheduled to depart, experts say.
"Giving yourself an extra day is also a form of insurance. Leave a day early, pad your schedule in case something does go wrong," said Zach Griff, a travel expert at The Points Guy, a site that helps consumers maximize their credit card and airline rewards. "Cancel for any reason insurance can get really expensive, so these are ways to minimize that cost."
Do I need medical insurance, too?
Before you travel, find out if you are covered for medical expenses out of state or overseas under your existing health care plan. If you get generous out-of-network benefits, you may be sufficiently covered. Additional medical insurance could be handy if you get sick or in an accident while traveling.
"It's something to think about. It could help you out, depending on how good your current health insurance is," said Giusti of InsuranceQuotes.
"Some people think they can walk into a foreign country with their health insurance card and get coverage, but that's not always the case," said Bangs of FlightAware. "Talk to your health care company and understand what your coverage is if you travel abroad."
Without travel health insurance, the International Association for Medical Assistance to Travellers (IAMAT) warns that "you may be responsible for the full cost of all expenses related to an unexpected event, accident or medical emergency abroad."
Medjet Assist, a medical evacuation insurance provider, will transport you to a hospital of choice in your home country for as little as $99 for a short-term trip.
"You absolutely need to have medical evacuation insurance," said CBS News travel editor Peter Greenberg. "If you get sick or injured outside of the U.S., it pays for you to be stabilized medically wherever you are, and to get you home to a medical facility and doctor of your choice."