You've probably heard about insurance you can buy in case of an unfortunate travel-related event. Maybe the groom at the destination wedding you booked months ago got cold feet and called it off. Or maybe you broke your foot in a pickup basketball game a week before leaving for your summer backpacking trip.
But chances are, paying extra money—typically 5% to 10% of the total price—for trip protection coverage isn't worth it. That's because you're often already covered either from your credit card, the airline's own policies or simply by cancelling far enough in advance to get a full refund. Even in the cases when you're not already covered, if you're young and healthy, the odds of being forced to cancel are usually too small to justify the extra cost.
What exactly does travel insurance cover?
Some insurance carriers or credit card companies use terms like “trip protection” and “trip cancellation” interchangeably, but it's not always the same thing. “Flight delay coverage on a credit card refers to just one aspect of traveling that could go wrong,” said Nick Ewen, editor-at-large at The Points Guy.
What's more, the umbrella term travel insurance covers much more. “Travel insurance will often include many different protections: trip cancellation coverage when you must cancel a trip before departure for a covered reason, trip delay protection if a flight is delayed by a certain number of hours, baggage coverage if your luggage is delayed, lost or damaged; and so on,” Ewan added. In same cases, it even includes medical coverage.
Don't pay a dime until you do this
Check with your credit card company to see what coverage is included at no extra cost. “Far too few people use these types of perks on their credit cards, even though they could potentially save some real money and headaches by doing so,” said Matt Schulz, senior industry analyst at CreditCards.com.
Credit card trip protection typically includes any travel expense you charge to the card and covers you in the case of an accident, illness to yourself or an immediate family member. Many also cover weather delays.
Schulz recommends the Citi Double Cash, which has no annual fee and reimburses up to $5,000 in travel expenses; the Chase Sapphire Preferred and Reserve cards, which reimburse up to $10,000; and the Barclaycard Arrival Plus World Elite MasterCard, which covers up to $1,500. Extra travel perks can include free access to airport lounges, no foreign transaction fees, and the accrual of points that you can use to pay for future purchases.
Other ways to get reimbursed for free
If your card doesn't include trip protection, be aware that your airline probably does. That can include waiving a flight change fee if you get sick, reimbursing you for lost luggage, or providing food and lodging if the flight is delayed. If you're not sure what's covered, check with your airline.
Another approach is to try calling the travel provider and explaining the situation. If, for example, you were unhappy with your hotel and can provide a solid explanation why, you may get reimbursed for a night or given a travel credit. If you booked a day trip to see ancient ruins in Mexico, but aren't feeling well, you can always call and request to move the trip to another day or get a refund. It doesn't always work, but it never hurts to ask.
What's not covered
Even the best trip protection coverage doesn't cover everything. “If you're laid off or lose $100 at the craps table in Vegas, you probably won't be covered,” Ewen advised. “You also typically aren't covered if your employer suddenly decides that you have to take that last-minute work trip when you were scheduled to be on vacation. You can plead with the airline to have mercy, but your protection generally won't apply in this case.”
Other uncovered expenses include pre-existing medical conditions, going into labor on your trip, mental health issues, dental emergencies, or anything not specifically listed in the policy. If you're planning a big trip, it's also smart to tell your doctor in advance so you can have any prescriptions filled before you go and make sure you are in good health overall. That will help give you the peace of mind you need before hitting the road.
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