Travel Insurance: When It Is Worth Buying

The one risk that dominates everything

Medical treatment abroad is the reason travel insurance exists, and it is the component worth buying even when everything else is unnecessary. Domestic health cover frequently does not extend overseas, or extends in a limited way that excludes the expensive parts.

The expensive part is rarely the treatment itself. It is medical evacuation — being moved to a facility that can treat you, or repatriated home. That can run into six figures in a remote location, and it is not a cost anyone absorbs comfortably.

If you buy nothing else, this is the cover to have, and the number to check is the evacuation and repatriation limit rather than the headline medical figure.

Cancellation cover and what actually triggers it

Trip cancellation cover reimburses prepaid costs when you cannot travel, but only for reasons the policy lists. Those typically include illness, injury and bereavement, and typically exclude changing your mind, a work commitment or a general anxiety about travelling.

'Cancel for any reason' upgrades exist and cost considerably more, usually reimburse only a portion, and must generally be bought soon after the initial booking. They are worth considering for an expensive trip with genuine uncertainty, and not otherwise.

The exclusion that surprises most people is the pre-existing condition clause. Many policies exclude anything related to a condition you already had, unless you bought within a short window of the first booking and meet other requirements. If you have any ongoing medical condition, this determines whether the policy is worth anything to you.

Check what you already have first

A meaningful share of travel insurance duplicates existing cover:

• Some credit cards include trip cancellation, delay and baggage cover when the trip was paid for with that card. Terms vary widely, so read the actual benefits guide rather than assuming.
• Some cards include rental car collision cover, which is often better than what the rental desk sells at a high margin.
• Home contents policies sometimes cover personal possessions away from home, which can overlap with baggage cover.
• Some employer or membership schemes include travel medical cover as a benefit people forget they have.

The trips where going without is a real gamble

Insurance matters most where the potential loss is large relative to the trip cost:

• Anywhere with expensive private healthcare and no reciprocal arrangement with your own country, where a straightforward hospital stay can cost more than the holiday.
• Remote destinations where evacuation would be difficult and correspondingly expensive.
• Expensive prepaid trips — cruises, tours, safaris — where a cancellation forfeits a large sum that is not otherwise recoverable.
• Trips involving activities that ordinary policies exclude, such as skiing, diving or motorcycling, which usually need a specific add-on.

Where cover is thinner than expected

Flight delay cover is usually modest, paying a small amount after a long delay, and it may exclude delays the airline itself is obliged to compensate for. It is rarely the reason to buy a policy.

Baggage cover typically has low per-item limits, which means an expensive camera or laptop is unlikely to be fully covered without a specific declaration. Electronics are frequently excluded or severely capped.

Missed connections on separate tickets are commonly excluded outright, on the basis that the two bookings were never one journey. If you fly self-transfer itineraries, verify this specifically rather than assuming a general policy covers it.

How to buy sensibly

A short process avoids most of the common mistakes:

• Buy soon after the first booking if cancellation cover matters, because several benefits depend on a window from the initial deposit.
• Check the medical and evacuation limits first, and treat the rest as secondary.
• Read the pre-existing condition wording if it could apply to you, since it may make the medical cover worthless.
• Declare activities you actually plan to do, rather than discovering the exclusion during a claim.
• Compare against what your credit card already provides before paying for a duplicate.