Travel insurance gets pitched on nearly every airline and hotel checkout page now, at a price that’s easy to add without thinking about it. Whether it’s worth adding depends heavily on how much of the trip is prepaid and nonrefundable, not on how far you’re traveling.
What It Actually Costs
Travel insurance typically runs 4% to 8% of your total prepaid, nonrefundable trip cost, and the percentage actually shrinks as trip cost rises — a $1,000 trip might cost around $67 to insure (about 7%), while a $20,000 trip might cost around $845 (about 4%). A $2,500 trip runs roughly $98, or under 4% of the total. The dollar cost climbs with trip price, but the rate you’re effectively paying drops.
What a Comprehensive Plan Covers
A standard comprehensive plan typically reimburses 50% to 75% of prepaid nonrefundable costs if you have to cancel or cut the trip short for a covered reason — illness, a family emergency, a natural disaster at your destination. Most plans also bundle emergency medical coverage and medical evacuation, which matters most for international trips, since most domestic U.S. health insurance plans provide little to no coverage once you’re outside the country.
When It’s Actually Worth Buying
It earns its cost fastest on trips with large nonrefundable deposits — a paid-in-full international tour package, a nonrefundable cruise, or a destination wedding trip where flights and lodging are locked in months ahead. It’s also worth it any time you’re traveling somewhere with materially weak medical care access or a country where a medical evacuation would otherwise be a five- or six-figure out-of-pocket expense.
When It’s Usually Not Worth It
A domestic trip on refundable or easily-changeable tickets, paid with a travel rewards credit card that already bundles trip cancellation and interruption coverage, often doesn’t need a separate policy stacked on top — check your card’s benefits guide before buying twice. If your total nonrefundable exposure is small relative to your emergency fund, self-insuring the loss is often the more rational move than paying a premium for it every single trip.
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