see more from Save Money

15 Things To Know Before Saying No To Travel Insurance

Updated 3 Hours Ago

JESHOOTS.com/Pexels

Travel insurance might seem like just another box to check when booking a trip, but skipping it can cost far more than you think. Medical emergencies and other unexpected issues can occur. Before you decide it’s not worth it, here are 15 important facts to consider. Read through this list and see why travel insurance could be one of the smartest choices you can make.

Trip Cancellations Aren’t Always Refundable

If you cancel a trip at the last minute, most airlines won’t refund you unless you purchased a flexible fare. Hotel policies are often just as rigid. Without coverage, you’re likely to lose 100% of the airfare. A policy can protect prepaid costs if illness or emergencies derail your plans.
More From The Penny Hoarder: The Dumbest Things We Keep Spending Too Much Money On

Emergency Medical Costs Can Exceed $100,000 Abroad

What if you break a leg hiking in Italy or need surgery in Japan? U.S. health insurance typically won’t cover those bills. Even a minor hospital stay overseas can cost thousands. Medical evacuation alone can cost over $250,000. Some policies cover airlift, surgery and hospital stays in full.
Make money easier. Sign up for The Penny Hoarder’s newsletter today.

Your U.S. Health Insurance Likely Doesn’t Work Overseas

Heading abroad? Don’t assume your domestic health plan will travel with you. Medicare does not cover foreign treatment, and most private plans also exclude it. If you need care overseas, you’ll often have to pay everything upfront. A travel policy fills that costly gap quickly.
More From The Penny Hoarder: Best Cash Back Rewards Credit Cards to Earn Money While You Spend in 2025

Travel Interruptions Can Cost More Than You Expect

Delays due to weather or illness may cause your trip to be cut short without warning. Rebooking flights and accommodations on short notice can get expensive quickly. When every leg of your journey is prepaid, the domino effect of delays hits hard. Insurance absorbs those surprise losses.
More From The Penny Hoarder: The Best Rewards Credit Cards to Maximize Your Spending in 2025

Airline Compensation For Luggage Is Severely Limited

Lost a bag on your way to Paris? Don’t count on the airline for full compensation. Payouts are capped and exclude many items, such as electronics and jewelry. Worse still, claims are based on a depreciated value. Travel insurance typically provides additional coverage for lost luggage.
More From The Penny Hoarder: Our Picks for The Best Bank Promotions This Month

Evacuation From Remote Areas Can Cost Tens Of Thousands

If you’re in a remote area, like on a cruise or on safari, a medical evacuation could cost over $100,000. Standard health plans usually won’t cover that. Insurance guarantees you won’t be left scrambling for help when time and access make all the difference.
More From The Penny Hoarder: Budgeting 101: How to Budget Money

Some Countries Require Travel Insurance For Entry

Did you know some destinations won’t let you in without proof of coverage? Cuba and Schengen countries enforce this rule strictly. If you can’t show documentation at the border, your trip could end before it begins. Get ahead of the red tape, not stuck in it.
More From The Penny Hoarder: Our Picks for The Best Budget Apps for Couples

Natural Disasters Can Void Standard Booking Refunds

Still think you don’t need protection? Natural disasters like hurricanes or wildfires can cancel flights, close resorts and derail tours without triggering automatic refunds. Airlines and operators rarely compensate for “acts of God.” A good policy steps up when the weather knocks your plans flat.
More From The Penny Hoarder: 5 Strategies to Consolidate Your Credit Card Debt

Credit Card Perks Rarely Match Full Coverage Plans

Relying on your credit card for trip protection? Most don’t cover medical emergencies or pre-existing conditions. Even when perks exist, limits are low, and claims are slow. For serious travel disruptions, those benefits aren’t enough. You’ll want coverage that’s built for actual emergencies.
More From The Penny Hoarder: What is Debt Settlement and How Does it Work?

Pre-Existing Conditions May Be Covered If You Plan Ahead

If you have health concerns, timing is everything. Many policies waive pre-existing condition exclusions if you buy coverage within 14–21 days of booking. Wait too long and that option disappears. By acting early, you protect your health and your wallet, without gambling on claim denials.
More From The Penny Hoarder: Ditch Overpriced Car Insurance Now — Save $500 Today

Insurance Can Cover Identity Theft While Traveling

Losing your wallet overseas is stressful, but losing your identity can be far worse. Some plans include fraud recovery services and emergency cash support. If your cards are skimmed or your data is compromised, support teams help restore your access and stop further financial damage.
More From The Penny Hoarder: Here’s How to Start Saving Money — Even If You Don’t Have Room in Your Budget

Travel Insurance Can Include COVID-19 Protections

Even in 2025, COVID-19 can still disrupt travel. A positive test abroad could mean hotel quarantine, missed flights and extra costs. Not every plan covers this, but many now offer COVID-specific protections. The right policy can shield you from pandemic-related chaos you didn’t plan for.
More From The Penny Hoarder: The 28 Best Side Hustles: Our Top Picks to Help You Make More Money

Cruise Lines Have Different Cancellation Policies Than Airlines

Planning a cruise? Unlike airlines, cruise lines may offer partial or no refunds close to departure. Missed ports due to illness or weather often go uncompensated. Onboard medical care comes with risks, too. Cruise insurance is designed to address these very specific gaps.
More From The Penny Hoarder: 17 Make-Your-Own-Schedule Jobs You Can Do From Home

Civil Unrest Abroad Can Disrupt Travel Plans Without Warning

What if protests block roads or airports? Civil unrest can shut down entire cities overnight. U.S. evacuations aren’t guaranteed and carriers may not refund you. Travel insurance doesn’t just cover lost money; it also gives you tools to act when a situation turns volatile fast.
More From The Penny Hoarder: How to Choose a Credit Card That is Right For You

Rental Car Damage Abroad Might Not Be Covered By Your Auto Policy

GoToVan from Vancouver, Canada/Wikimedia Commons

Your U.S. car insurance probably doesn’t protect you overseas. Collision Damage Waivers (CDWs) may not cover tires or glass. Many policies exclude foreign rentals and some countries won’t let you drive without proof of coverage. Travel insurance helps you drive legally and avoid massive bills after an accident.

More From The Penny Hoarder: