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National Travel Insurance Survey Results – Who Buys It and Is It Worth It?

by on June 26, 2013 · 41 comments

in Travel Insurance

As a frequent traveler, I’ve always balked at purchasing travel insurance because I’ve been confused by the different policies and whether it actually has any value. However, recently I embarked on a mission to research the topic and find out which policies were actually worth it. To start off, I commissioned Princeton Survey Research Associates International to conduct a study to find out if I was alone and see whether or not people think it’s worth it, and the results were very interesting.

In all, only about half of the respondents said they had a pretty good idea of what travel insurance covers while 49% admitted to being unsure of what travel insurance covers.

Do you always buy travel insurance BAR

Only 21% of people purchase travel insurance (only 7% of them purchase it regularly) with an astounding 78% of people responding that they either never purchase travel insurance or take a trip where it is offered.

Main reason you buy PIE

Of the people that do purchase travel insurance, the main reason they buy it when going on airline trips or cruises was trip cancellation by a long shot, with 52% of respondents picking that as their main reason. Medical coverage was the main reason for another 27% of travelers while 20% claimed another reason.

Screen Shot 2013-06-24 at 8.26.31 AM

In all, only 37% of people surveyed said they felt that travel insurance was worth the cost. Nearly half – 47% – said travel insurance wasn’t worth the cost, while 16% had no opinion.

That’s a lot of numbers to throw out there, but the main conclusion I draw is that, in fact, even people who purchase travel insurance don’t know exactly what they are buying and what it will cover.

Although we’ve all learned to be a little leery of the offers of “Trip Protection” and “Cancellation Protection” add-ons we see when purchasing airline tickets through airlines or online travel agencies these days, as well as the “Travel Accident” and “Travel Emergency Assistance” many credit cards offer as part of their benefits suite, travel insurance is different than these forms of coverage.

Whereas just buying a refundable plane ticket might be your best bet if you think you might cancel a trip, more extensive travel insurance can be extraordinarily prudent and valuable in certain situations, such as taking expensive non-refundable trips, or traveling to international destinations where medical care might be limited and if something happens evacuation may be required.

That said, it’s also extremely important to educate yourself on what exactly your travel insurance plan will cover and what it won’t – the same as with those travel accident and emergency benefits that come with your credit cards.

For instance, though most consumers claimed trip cancellation as the main reason they purchase travel insurance, what and when you can cancel depends on your plan, and it’s often much more complicated than just changing your mind and deciding not to take a trip.

Likewise the medical coverage, it’s important to know whether evacuation or transportation is included in your plan, what medical expenses are covered and what exclusions there are.

In short – there’s a lot of fine print!

However, as more and more mainstream travelers venture farther afield to corners of the globe that were once inaccessible, more and more of us are going to be considering travel insurance and it’s important to know what’s out there.

As a follow up to this survey, I am going to cover the basics of travel insurance including a rundown of the various kinds of plans that currently exist, what they cover, what to look for in an insurance plan, and the kinds of coverage many of the top travel credit cards out there offer, so stay tuned for future posts, and if you have questions you’d like answered, please feel free to comment below.

What has your experience been with travel insurance?

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • flyinace2000

    We are currently living in the UK and bought a 12 month travel insurance package. It was about 100GBP for the year. There are cheaper options, but we over insured. We made sure it would cover us while skiiing in France and emergency medical cover for a 3 week trip to india we have coming up. It also include repatriotization to make sure we can get home in case of emergency. Will we use it? probably not, but its worth it for us since we only have the NHS while in the UK.

  • Yao

    The insurance sold by airline companies or travel agents covers the same extreme circumstances as my credit card’s benefits cover. So each time, I prefer to use the benefits from credit cards (eg. United MileagePlus Explorer Visa Signature) instead of paying extra 30 bucks per ticket.

  • bevin

    Traveling late in pregnancy we considered this, and it turns out that pregnancy and related conditions are almost never reasons for cancellation / coverage. So that ruled it out for us….

  • frequent churner

    Only 100 gbp for a whole year? That’s dirt cheap. All the health insurance options I saw were at a minimum $20-30 per month of travel. What company was it from?

  • http://lifelaidout.com/ Roger

    Ah, what a timely post for me. I usually never buy travel insurance or even think about it, but I’m going to Cancun in September for a wedding. The wedding will be at an all-inclusive resort and the travel agent had the cheapest price.

    We had the choice of purchasing the trip through this travel agent with no refunds whatsoever, or paying $99 additional per person to be able to cancel our hotel anytime up to the day we were suppose to check-in and getting a full refund (minus travel insurance fees of course).

    The travel agent had said, to the extent there was a hurricane actually in Cancun, and we weren’t able to go to the resort, we could get a refund on our hotel without the travel insurance. With that said, if there was bad weather elsewhere (not Mexico) that prevented us from getting to the resort, we would not get any refund. Given all the hurricanes along the east coast over the past two years (Sandy and Irene), we thought better be safe than sorry and opted for the travel insurance. Not sure if I’d opt for this insurance all the time, but it seemed like a good policy (cancel anytime for any reason and get a full refund), and in this case, I’d rather pay the extra $99 per person than lose the full value of the trip.

  • flyinace2000

    I bought it via American Express but it is run by AXA. Don’t forget this is for a UK based policy and does not include travel to the USA. Eveywhere else in the world, just not the USA.

  • Backpacker

    So this may be slightly off topic, but maybe you could help. I’m currently in a slightly more difficult situation. I am about to quit my job and backpack around the world for 9 months on a RTW miles ticket.

    Since I am quitting, I need full medical coverage. Being a mid 20′s healthy non smoker, I would hope this would not be too expensive. Also, as a US citizen, I am not sure about how the ACA (ObamaCare) will factor in in 2014 and if the insurance will qualify as qualified medical coverage. I plan to work in the second half of 2014 and may not qualify for medicare.

    How does insurance cover award flights? Also, I am travelling on a One World Explorer award ticket, so if I miss a flight that could potentially terminate the rest of my RTW ticket.

    What about medical evacuation, seems most insurance will not bring you back to the USA unless THEY deem it necessary. Do I choose global rescue or some similar service? Also, I would need continued medical coverage upon return to the USA in such a situation.

    I will be partaking in many adventure activities. If something were to occur during this time, would my insurance cover me?

    I guess the last main issue is personal property coverage. What would the plan cover? How easy would it be to submit a claim if I am mugged in a third world country?

  • Brad

    I’ve worked in the Insurance industry for over a decade, consulting on large multinational insurance programs for companies like IBM and Honeywell. I’ve bought travel insurance before via accessamerica.com and wouldn’t recommend this to anyone. Despite my extensive knowledge of policy language, they still denied my claim because of conflicting wording (I bought extra coverage for pregnancy complications and they still denied my claim). If someone with my knowledge of insurance can’t comprehend their policies or get a claim paid the average joe doesn’t have a chance on a complicated claim with these policies.

  • MichaelP

    I started buying travel insurance, $125 from Seven Corners via SquareMouth, 1 year coverage for 2 people includes med evac, remain return, medical. It’s the basic coverage. I don’t know how good they are as I have not had to file a claim.

  • Heather Christopher

    We went on an African safari 5 years ago and had spent thousands of dollars for flights and the actual tour. Though we purchased cancelation insurance, our house burned down three weeks before the trip and the policy stated that a home had to burn down 10 days before for the insurance to cover. If any of you have lost a home to fire, you will understand that the investigation and insurance process for large loss takes months. We had also spent thousands of dollars on safari gear ($2500 camera, etc) that all burned up. We literally had to repurchase everything in one day and leave to Africa. An unwise choice, ad we worried about the home los the entire time. Nevertheless, we did actually use our insurance when one of the African airlines went bankrupt while we were going from South Africa to Zambia. We were able to purchase tix on a different airline right then, and we broke even on the insurance costs.

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  • zbird

    Good topic choice, but I would point out that coverage for medical
    emergencies while traveling is a completely different product than trip
    cancellation.

    On trip cancellation, I think you need to apply the fundamental rule of all
    insurance: Insurance should protect you from catastrophic losses that you can’t afford to experience without insurance. If you travel regularly, you may
    occasionally make good on a trip cancellation claim, but over time the cost of
    premiums will exceed the amount of the occasional claim – otherwise the insurers would not make money. If you can afford
    to travel, then you can afford to occasionally miss a flight without getting a
    refund.

  • frequent churner

    thanks! I got travelex for $40/mo that covers all emergency medical and emergency transportation.

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  • Matt C.

    I’ve purchased it just a couple of times in the past, when I was taking expensive trips booked months in advance. In my research TravelGuard had a lot of positive reviews from people who actually had to use it (obviously most never do), so I went with them.

    For my trip to the Philippines, I had to get specific coverage because I wanted medical evacuation back to the US for anything serious. For my trip to Mount Rainier, I wanted to get cancellation and injury coverage for “extreme” sports including mountaineering. Turns out many policies don’t cover it, and I had to hunt around for ones that did. I found two in the end (Travel Guard Great Outdoors and Travel Insured with Sports Coverage), one was $48, the other $79.

  • pssteve

    My SO buys travel Ins thru AAA for most of our trips. She is still trying (9 months later) to collect for an MD on board ship visit (eye infection) . Took 6 months to get claim form.

  • Wildfrei

    I take at least one horse-related trip a year, sometimes domestically, sometimes internationally. Because most of these take place in somewhat remote locations, a missed connection/cancelled flight/extended delay could mean that I would miss my pick-up to be taken to the location or campsite– and then either I’m SOL or have to cough up hundreds of dollars to find a way to catch up with the group. A lost bag means I don’t have any of my camping or protective gear. I ride competitive cross-country at home– a fairly high-risk style of riding– and there is always the possibility that I will suffer an injury prior to the trip. The trips are expensive and non-refundable; it’s worth the $75-100 to me to know that I’m covered for these sorts of situations. That said, if I’m just flying for work or going to visit the folks or something, I’d never bother.

  • Nathan

    Sometimes… depending on the card you used to book travel, you have protection built into the card. Especially Amex. Make sure you know what your coverage is there before purchasing additional.

    In my case, 80% of my family’s vacations are on cruises. Cruises are one of the areas that I think are worth getting travel insurance. You need to pay in full months in advance, if an airline loses a bag you typically have a day or less to wait for it before getting on the ship, and if you have a medical emergency in the middle of the ocean that Medivac can be quite expensive. I’ll usually shop around the policies on insuremytrip.com and find the cheapest policy that covers these things. We haven’t had to use it yet, and knock on wood… hopefully we never will…

  • - -

    It’s their job to find a way to not pay. Don’t bother.

  • Tony

    I didn’t know that VISA Signature cards provide travel insurance. Can anyone expand on that for us? Will the insurance become effective when only the taxes and fees are paid using the VISA for an award ticket?

  • y-for-3

    Check carefully on the terms of benefits of any travel insurance.

    sometimes it covers weather or other “acts of God” problems, or flight delays, etc.. Other times it only includes an extraordinary event (like your spouse died).

    As with all insurance of any kind, the goal to sell it is to make money. I think many buy it assuming it covers just “incoveniences”. In reality most of it is foolish to buy.. it does not cover what you think it should, but will add 10 – 20 percent to travel bill. And if you try to make a claim, expect mounds of paperwork and delays.

  • LMeister

    For me, myself and I, I don’t worry about travel insurance. However, we’re about to go on a family trip to Disney World — getting a deluxe resort package plus lots of related travel costs. For an estimated $6000 trip for 7 people, I’m looking at a sub-$200 policy for Trip Cancellation and added Medical, but primarily for trip cancellation. The nice thing about the policy is partial coverage — if one member suddenly can’t go, they cover the partial cancellation. Since the insurance is less than 4% of the projected costs of the trip, I feel it was worth it for added peace of mind.
    Additionally, I payed with my Visa Signature card which has trip cancellation up to $1500 plus an array of travel benefits. Disney has a 48-hr cancellation policy as well for a small fee. All these add to great peace-of-mind for our trip which I want to enjoy without a lot of worries.

  • Josiah

    Try GeoBlue Travel Insurance. We had this in Mexico for a week, and it was just $10/week. Honestly didn’t read the fine print, but it looked legit.

  • Mark R.

    I always go to insuremytrip.com – they are a broker and give you numerous options with numerous companies, plus their phone customer service is very good.

  • Tom E

    I have two one year policies, one for myself w/$500,000 medical, $500,000 evacuation/repatriation $2,500 trip cancellation/interruption. Travel Guard $458 a year.

    Another policy covers me and my family through AOPA with similar medical and evacuation coverage with lower limits for $109 a year.

    My main reason for purchasing these policies is for the medical and evacuation coverage on international trips (3-4 a year) AND Life Flight type coverage in the USA as well.

  • Lydia Gregory

    Absolutely, zbird: trip cancellation and medical emergencies when traveling are two entirely different things. The company I work with (SkyMed International) specializes in covering the latter, where we return you to the home network hospital of your choice – pretty huge when you consider the alternative.

    No one wants to think they’ll get seriously sick or suffer anything like a complicated compound fracture but if it happens (and we know it does), they’re either super happy they have the coverage or really wish they did! It’s the “better safe than sorry” thing, but when thousands of $$ are in the balance, I’d rather be safe!

  • vortix

    I had the impression that Brad purchased extra coverage to allow a flight cancellation due to pregnancy complications. i.e. this was still trip cancellation insurance, and not medical insurance. Though he will have to clarify.

  • Bev

    Beware of evacuation insurance. Most say the will take you to the closest place that can treat you, but they decide where that is, not you! I broke my leg in Russia and the Russians said the could do my surgery. This was music to their ears.

    We now pay more for ” medjet”, and they are supposed to take you where you want to go any where in the world.

    My Blue Cross has international coverage, so they paid for my evacuation (after demonstrating that Russia was not the best place for me). I chose a top orthepaedist in Belgium and B C was happy to oblige.

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  • RST782

    Travel insurance has saved me a LOT of money more than once. I always go with TravelGuard and have gotten back literally thousands of dollars which would otherwise have been a total loss from my pocket. I once had to cancel a $1500 trip to Greece because of work obligations and I got back the full amount with just a few simple documents for proof. I only lost $60 for the policy. I also recently got back $1400 for trip interruptions due to a strike in India and weather issues while trekking in Nepal. I don’t do any major international trips without travel insurance. I don’t think it’s always worth it for domestic travel though it has saved me in those situations a few times as well.

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  • sanifel

    Generally it’s a terrible deal. Most people don’t know that 35-50+ % of the price you pay for travel insurance goes to the seller as commissions! After that here’s not much left to pay you, so they generally don’t.

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  • Elenor

    Like all insurance, travel insurance is (supposed to be) coverage for *serious or catastrophic* occurrences (an eye doctor’s bill, even on a cruise ship, doesn’t meet that level in my view, but each to their own!). We bought travel insurance for a cruise that, all in, cost just over $20k: biz-class flights to Europe (pre-FF knowledge), expensive cabin on a high-end cruise ship, medical evacuation, and so on. Yes it DOES require reading to doggoned policy. {sigh} But we never buy it for a Caribbean cruise, a flights around the States. The key is: are we willing to lose all the money in this specific vacation or will it be too big a ‘hit’ that we need to avoid?

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