The answer to the question why have travel insurance boils down to buying the ability to enjoy your trip while putting your mind more at ease from the consequences of what can go wrong. Unfortunately, travel insurance tends to be overlooked, and this can end up costing you a lot more money that you didn’t expect to spend (even exceeding your original trip cost)! The bottom line is that purchasing travel insurance adds to the trip cost by a modest amount in return for “insuring” against the potentially heavy financial penalties if the risks and consequences are realized both during or even before your trip.
So here are the 7 reasons why you shouldn’t overlook travel insurance, especially if you’re on the fence about paying money for something you actually don’t want to use!
Why We Buy Travel Insurance
1. Medical Emergencies
The biggest reason why we don’t mind paying extra for travel insurance is to protect ourselves against the cost of medical emergencies.
Think about it.
Have you ever gotten sick while abroad whether it’s food poisoning, bad water, mosquito-born illness, or infection from some mysterious bacteria, among others?
What happens if your ailment became so bad that you had to be hospitalized?
This doesn’t even cover what happens if you’ve broken an ankle or leg on a misstep or slip-and-fall while hiking.
Heck, having been to numerous waterfalls in our lives, we can appreciate how easy it is to really get hurt around them or on the way to them due to slippery rocks, steep terrain, fallen trees, rock falls, landslides, as well as an ill-fated cliff jump.
Indeed, when you’re in foreign lands, you don’t know what can strike you down and require hospital stays or medical procedures to get you out of a predicament and stabilize your health.
Having run the numbers, we can see that costs from a medical emergency can bankrupt you because these costs can escalate as if there was no cost ceiling!
So this reason alone makes us real hesitant to go on an international trip without travel insurance.
While the cost of medical emergencies abroad can scare the heck out of us, the cost of evacuations (whether political, war-time, or even debilitations) can also break the bank.
You typically need to be evacuated when you can’t get care in your immediate situation.
So say if you’re injured and debilitated in a remote part of a hike (very easy to do since most worthwhile hikes let alone waterfalls to reach involve going to remote places), then you may need to have crews navigate and carry you out.
However, if it’s really hard to reach you, then you may need to be airlifted out by helicopter.
That said, the need for evacuation is not limited to medical emergencies.
Indeed, you may need to be evacuated out of a politically unstable region or a place that was just affected by a sudden terror attack or act of war (assuming this area was covered by insurance in the first place)
Maybe you need to get out of a situation where you may be targeted as a foreigner who can be used as leverage for ransom.
All of these operations to extricate yourself out of these scenarios carry significant cost to you, which can far exceed the original trip cost.
This is also further complicated by the fact that you’re probably not likely to be able to speak the local language or know and understand how and why things are handled the way they are while in the foreign land.
So this is another major reason why we don’t hesitate to buy travel insurance prior to our trips to at least give us the piece of mind that we won’t go bankrupt should these situations become realized.
3. Recoup Costs From Unforeseen Delays, Interruptions, And Cancellations
Travel insurance can cover you for those situations where trips are cancelled or delayed even though you may be past the free cancellation window (i.e. it becomes non-refundable).
In some cases (like cruise lines), you only have until 14 days prior to your trip to cancel!
Heck, we’ve even had a scenario where we had to put in a 50% non-refundable deposit upon booking a hard-to-get cabin, which was 2 months before the actual trip!
Indeed, pre-paying for your trip is inevitable (gone are the days of reliably just booking something like a plane ticket or accommodation at the last minute).
However, once that money is surrendered, you never know if a loved one (like an elderly parent who fell) becomes hospitalized and needs your attention literally in the last minute before that trip you’re supposed to take.
Even if you are on a trip, what happens if you need to be back home to tend to a loved one when you had to cut your trip short?
This actually happened to my parents when grandma’s health suddenly made a turn for the worse.
Most of us don’t have the luxury of just blowing off our pre-paid trip expenses if vendors don’t have to give back your money.
So the modest cost of travel insurance at least makes it possible to recoup some or all of that money when the alternative would be to waste that money on a trip or parts of it that were unrealized.
4. Recoup Costs From Lost, Stolen, Damaged, Or Destroyed Property
Let’s face it. Losing luggage and/or belongings on a trip (or at least not having them during your trip) happen quite regularly.
We’ve had a situation where luggage was misrouted to a different city and had to do without our gear until we were able to go back to the airport and recover the misrouted luggage.
We’ve also talked to German travelers on a Norwegian cruise with us who had their luggage lost by the airline or baggage handlers.
In their situation, they had to buy expensive Norwegian clothes to protect themselves from their Summer weather clothing since it was still hot in Germany, but there was still inclement weather in Norway.
I’ve also met Canadian travelers in Venezuela who had lost belongings due to someone breaking into their room and stealing them (fortunately when they weren’t around because that could have ended badly).
Heck, I know of one Northern California blogger (long before blogging became a thing) who lost his DSLR camera in the Big Island of Hawaii when someone did a smash and grab from his rental car.
With travel insurance, as long as you’ve paid for coverage that incorporates these belongings (especially the expensive ones), then you may be able to at least get back some money to take some of the sting out of buying replacements.
With something like this, there’s definitely exclusions and fine print, but know that for some carriers, this is an option.
5. Shield Yourself From Increased Premiums On Primary Insurance
First and foremost, our primary health insurance policy typically doesn’t cover us for medical expenses overseas (which we know can be astronomically large with no apparent cost ceiling).
And even if they did, without dedicated travel insurance, if you do file a claim with your primary insurance, you may find that your premiums will have also gone up to make up for the cost you’ve incurred to the company.
Although I’ve focused on medical expenses (which is always on our minds when it comes to travel), this is not unlike the question of whether to buy supplemental coverage for a car rental instead of relying on your auto insurance.
The one time that we took our own car on a trip over the American Southwest, we found out after the fact that our premium jumped nearly $200 in a single 6-month period!
In fact, the increased premiums hardly ever go down so it could end up being unfavorable to you in the long run to fall back and rely on your primary insurance to handle things like medical expenses instead of going through travel insurance.
Your only other recourse would be to go through the hassle of finding an alternate carrier unless you have medical insurance primarily through your work (in which case your options are limited unless you want to pay even more out of pocket).
6. The US State Department Recommends Buying Travel Insurance
There’s a bit of a misunderstanding if you’re traveling abroad concerning what the US State Department (who runs our foreign embassies) can and can’t do if you as a US citizen gets into trouble.
I’d imagine that similar issues apply if you’re not a US citizen and are considering whether to purchase travel insurance for going abroad from your home country (where socialized insurance may or may not do the job).
While the US Embassy may assist in matters concerning a lost or stolen passport (which you can’t travel or go home without), they definitely don’t cover medical bills and costs associated with trip logistics.
Indeed, the US State Department website straight up tells you that you should get travel insurance before you travel.
So who are we to argue?
They’re already acknowledging the limits of their assistance to you.
7. You Want To Enjoy Your Trip
While the other 6 reasons to have travel insurance above primarily revolve around the consequences of what happens if something happens and you don’t have travel insurance, this particular reason pertains to the present.
I have opened this article with this assertion that you want to travel with piece of mind, and spending more for travel insurance affords you that piece of mind.
After all, at the end of the day, you want to be in the moment to truly enjoy your trip.
But how can you do that if your mind is preoccupied with worries and paranoia about the financial consequences of what can go wrong without having purchased travel insurance in the first place?
Is it really worth not having the ability to enjoy your trip just to save around 5% (more or less) of your overall trip cost?
What Is The Best Cheapest Travel Insurance?
Naturally, no one really wants to pay extra for their trip, especially if they don’t expect to (nor would want to) use it.
But as you’ve seen outlined above, there’s definitely value in paying to have that piece of mind so you can enjoy that trip instead of being so paranoid that you can’t enjoy it.
That said, what is the best cheapest travel insurance you can buy so the bite out of this additional cost doesn’t make your trip become unaffordable?
Well, the problem with this way of thinking is that you generally never know how good a company is until you file a claim with them.
Actually, this is true of all insurance companies, where the business case is to collect the most money in premiums and pay out the least amount possible in claims and liabilities.
We’ve dealt with enough calamities in our travels (not counting the COVID-19 outbreak that cancelled our 2020 Iceland trip), which is further proof that you just never know when it strikes, especially when bad things happen when you’re in unfamiliar places.
Nevertheless, as a general rule of thumb based on our experiences, we’ve typically paid around 5% of the covered expenses of our trip cost.
Obviously, the cheaper insurances will cover less, pay out less, or make you fight harder for a successful claim.
Conversely, the more expensive insurances will cover more scenarios and maybe give you less hassle on your claim.
This is why you’ll want to go with a reputable company to minimize the chances of getting less than what you were expecting based on what you paid.
Which Travel Insurance Should I Purchase?
To answer this question, we’ll just summarize the travel insurance companies that we’ve bought from over our many years of travel experiences.
While it turns out that each company has a reputation of catering to different types of travelers, they do offer different types of packages to better hit your price point versus risk of loss considerations.
In our case, we actively chase waterfalls around the world, which means that we tend to be independent travelers engaging in activities that carry some degree of risk.
After all, being in Nature is already inherently risky, but we also don’t mind going to developing countries, which also carries additional uncertainties and concerns.
As a result, there isn’t a “best” travel company or particular policy as far as we’re concerned, especially since our situation changes as we age and our lives evolve over time.
However, each travel insurance company has strengths and weaknesses as well as a target customer that they tend to cater to, and these are summarized below.
World Nomads Travel Insurance
This company primarily caters to backpackers and higher-risk active adventure travelers, which we envision ourselves to be due to the inherent risks of chasing waterfalls and hiking in general.
So their packages primarily consider sports-type scenarios, of which hiking applies to us since we consider that to be a “sport” (albeit a non-competitive one).
Nevertheless, they also have packages that can cover even higher-risk activities like skydiving and bungee jumping as well as backpacking in developing countries (all of which we’re less inclined to do).
World Nomads Travel Insurance is especially suitable if you’re young, open-minded, have a little more time, and all the while on a tight budget.
Granted, I know we thought we were more invincible when we were younger (and we see our daughter exhibiting the same kinds of risk-ignorant behavior we probably exhibited), which is all the more reason to consider World Nomads!
Travel Guard Travel Insurance
On the opposite extreme of the budget-minded, independent adventure travel that World Nomads caters to, Travel Guard tends to be known to cater more to luxury travel as well as travel with kids.
They’re especially known for having “cancel for any reason” policies as well as add-ons or customizations to cover more than the standard coverage that most travel insurance companies typically offer.
Reputation notwithstanding, we’ve bought Travel Guard Travel Insurance on some of our trips as they do have some packages or offerings with elements of independent travel that’s better suited for our situation.
In fact, we’ve noticed that as we age, we’ve been gravitating more away from the hostel and backpacker type of travel and more towards independence that does involve spending more to attain both freedom and time efficiency.
Travel Guard is actually the marketing name of AIG Travel, which is an arm of the American International Group (AIG), which itself is a major insurance and financial entity that has been around for over 100 years.
Therefore, their extensive experience in putting a dollar amount on travel risks ensures that they can remain financially viable while having fair prices for what they cover (which means they can be more expensive).
That said, you should have confidence in their ability to properly handle and pay out your claim should you need to file one given their pretty stable financial position.
Allianz Global Assistance
In our experiences, we’ve historically bought travel insurance from Allianz pretty frequently probably because they tend to cater to frequent travelers, which we consider ourselves to be.
This is especially the case since they even offer an annual travel insurance plan.
Therefore, they would cover the type of scenarios and risk/consequence factors that best fit our particular situations and circumstances as international waterfall chasers.
In particular, they’ve been pretty strong about covering medical expenses, where the sky is the limit on how much travel abroad injuries and hospitalizations can cost you.
The same can be said of their coverage of evacuations as well, which is another primary reason why we always buy travel insurance in the first place.
Allianz Travel Insurance is underwritten by the BCS Insurance Group (of which Blue Cross Blue Shield is perhaps the most known insurer of this entity).
Since it’s a large company with a lot of experience in terms of risk assessment and financial viability, we’re pretty confident about their ability to pay out a claim should we need it.
Perhaps even more telling about this company was that after pre-paying for our Iceland trip in March 2020 for a Spring Break trip the following month, they actually answered our calls and refunded us 100% when COVID-19 halted travel worldwide.
Other vendors didn’t even have someone to answer the phone during that time!
You can get an online quote from Allianz here.
Travelex Travel Insurance
While we’ve known the name Travelex for foreign exchange of cash when we’re abroad, this travel insurance company is actually not affiliated with the money exchange service.
Anyways, we have been paying more attention to the Travelex travel insurance offerings because they have policies (especially concerning medical and evacuations) that are more on par with Travel Guard and Allianz.
They have had a reputation for catering more towards family travel, which has become important to us since we’ve been bringing our daughter on our waterfalling escapades abroad.
However, what impressed us most about the Travelex Travel Insurance is that among the major travel insurance companies on the market, they’ve been known to have the highest paid out claims rate (at 94-98% depending on the source).
That’s not bad considering we’ve seen their medical expense coverage (our primary motivation for getting travel insurance in the first place) is similar to that of Allianz.
Travelex Travel Insurance is a relative newcomer compared to some of the more established companies like Travel Guard and Allianz as they’ve established a presence in the USA since 1996 after purchasing the travel insurance arm of Mutual of Omaha (Nebraska).
With that purchase, they’ve become one of the largest 3 travel insurers in the US so they have the means of paying out claims and not going under when their customers are in need at inopportune times.
Conclusion / Final Thoughts
As you can see, travel insurance is actually a very important part of your overall trip expenses.
While you can roll the dice and save money by not buying trip insurance, our personal experiences have taught us that unexpected (bad) things can and do happen that adversely impact our travel experience (especially financially).
It’s not a matter of if, but when such bad things happen while on or right before travel…
Then what do you do?
This is why we always buy travel insurance on our trips because failure to protect yourself from what can happen will certainly cost a lot more than just the trip itself!
So we’d like to hear from you.
Have you had to file a claim from your travel insurance?
What are you feelings towards travel insurance?
What kind of bad things happened on your trip?
Please feel free to comment below and keep the discussion going!
All of the information provided about travel insurance is a brief summary only. It does not include all terms, conditions, limitations, exclusions and termination provisions of the travel insurance plans described. Coverage may not be available for residents of all countries, states or provinces. Please carefully read your policy wording for a full description of coverage.
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