7 Ways Travel Insurance Can Save You Money

When it comes to going on vacation, balancing between the must-have expenses and the items on your wish list is all part of the planning process. Some travelers might splurge on first-class airfare but save money by staying in a budget hotel. Others, may prefer to indulge in lavish meals but stick to cheaper activities, like hiking or free walking tours.

One vacation expense that often gives travelers pause during the planning and budgeting phase is travel insurance. They wonder if they should buy travel insurance, trying to decide whether it’s worth the cost or just another unnecessary expense.

The United States government recommends American travelers purchase insurance before they travel, making it one of the most important items to pack for a trip — especially if you want to help protect yourself against unexpected costs.

“Not only can problems or challenges on your trip cause distress and disappointment, but they can also cost you money,” said Shannon Lofdahl, President and CEO at Travelex Insurance Services Inc.

“When you protect your vacation with the right travel insurance plan, you pay a small amount upfront to help ensure you have financial support for a variety of covered travel incidents, should something unexpected go wrong on your trip,” Lofdahl said.

Want to understand how travel insurance can save you money? We reveal the real-life value of this vacation must-have below.

#1. If your luggage is lost or stolen

When it comes to travel, you’ll likely want the luggage you packed for the trip to arrive at your destination when you do — no matter your mode of transport.

For example, if you’ve arrived at your vacation destination and your friends are ready to hit the beach, but your bathing suit has been rerouted to Alaska, insult is only added to injury when you have to buy a new swimsuit despite having packed your favorite. Or, if someone has stolen your garment bag, leaving you without a single suitable outfit to wear to an important business meeting, spending money you hadn’t budgeted for new clothes becomes an unwelcome stressor.

If your belongings or luggage are lost, damaged, or stolen while on your trip, travel insurance can help reduce your out-of-pocket expenses. Without adequate trip coverage, you’ll likely be stuck with the bill for any costs to replace both your luggage and the belongings inside it.

Real-life travel story: The case of the lost luggage

On a trip to Greece, one Travelex customer had their baggage stolen right out from under their nose. Distraught, the traveler contacted our team, and we were able to provide them with a travel insurance reimbursement of $2,000. This allowed them to recoup most of the cost of the luggage, clothing, and other items in the stolen bags. Without travel insurance, the replacement costs would have been this traveler’s financial burden to bear.

#2. If you miss your connection

If you’ve planned a trip that involves several legs, there’s a chance you could miss one of your connections. Maybe you’ll miss it because of an unexpected weather delay, or maybe you’ll miss it because of a slight technical malfunction on the aircraft — travel is unpredictable sometimes.

If a leg of your preplanned trip is delayed by circumstances outside your control, then you could find yourself paying a lot of money to get your trip back on schedule. However, if you have travel insurance, your policy may provide financial reimbursement to cover the unexpected costs related to your missed connection(s).

Real-life travel story: The case of the missed connection

A trip to Antarctica is likely a once-in-a-lifetime experience for any traveler brave enough to go. If you have the time, money, and inclination to plan such an adventurous trip, you’ll want to make sure it‘s memorable for all the right reasons.

A Travelex customer headed to Antarctica ended up missing one of the many connections on their flight plan, leaving them stranded for some time. Thankfully, their travel insurance for missed connections coverage was $500, and the claim payout helped the traveler recoup some of the money they spent during their unplanned stay.

#3. If you experience trip delays

Have you ever been stuck in an airport for an extended period? Maybe your flight was delayed by a blizzard, or perhaps the computers were down that day and you had to wait hours (or overnight) before you could resume your journey. In scenarios like these, additional expenses — from extra meals to hotel rooms — would need to come out of your wallet. But, with travel insurance, you may be reimbursed for unexpected expenses related to trip delays.

Real-life travel story: The case of the dastardly delay

Sometimes, a trip can be delayed because of a more serious incident. Sadly, this was the case for one Travelex customer during a vacation to India. While on a group tour, the insured traveler’s companion suffered an unexpected injury, which caused them to fall behind their group’s itinerary and led to several additional expenses and travel delays. Thankfully, their travel insurance reimbursement of $1,000 for additional expenses helped ease the sting of the missed opportunities.

#4. If you experience a medical emergency

No one wants to get injured or sick, especially on vacation. But twisting an ankle or coming down with a stomach bug while traveling can — and does — happen. Often, only then do travelers realize the health insurance they rely on back home probably won’t cover them while they’re traveling abroad.

This is where travel insurance comes into play. Medical expenses can be some of the costliest bills people face, whether at home or abroad. Costly medical expenses can be daunting, but by making a relatively small investment in travel insurance before departing on your trip, you can potentially save tens of thousands of dollars in unexpected medical expenses. And, while this won’t take away the physical or emotional turmoil of an accident, it can certainly help reduce the financial stress of out-of-pocket medical expenses.

Real-life travel story: The case of the troubled traveler

You don’t have to be on an adventurous trip to a faraway land to suffer massive medical bills while on vacation. Another Travelex traveler took a trip to Pennsylvania and, while there, suffered an injury that racked up medical bills totaling more than $17,000.

Fortunately, the traveler had spent a comparatively small amount of money on a travel insurance policy ahead of their domestic trip, and the policy covered their medical expenses in full. Knowing they didn’t need to worry about the financial implications of the incident likely provided much-welcome comfort during such a difficult time.

#5. If you need to be evacuated

We hope all trips are full of fun and free of stress, but, sometimes, circumstances outside our control can lead to unexpected problems. For example, if you get hurt while on a jungle adventure or winter ski trip, you might need to be evacuated by helicopter or air ambulance to reach medical support.

Evacuations are often expensive — not to mention stressful and confusing — and travel insurance can not only help pay the bills, but also help organize the evacuation with local authorities.

Real-life travel story: The case of the unfortunate evacuation

On a trip to Mexico, a Travelex customer became extremely sick. Not only did the traveler rely on Travelex as their travel insurance provider to take care of a wide range of medical bills, but they also needed our help to be evacuated from Mexico to the United States. Our Travelex 24/7 Emergency Assistance team was able to take care of the arrangements and the financial costs, saving the traveler more than $20,000.

#6. If you need to cancel your trip for a covered reason

When booking a vacation, some people fear they won’t actually get to go on the trip they’ve spent a lot of money booking and time planning. While most vacations go off without a hitch, there are unfortunate times when an entire trip needs to be canceled: maybe someone gets sick, or bad weather shuts down the destination, or there’s a work emergency.

If this happens to you, it can be extremely disappointing for many reasons. Firstly, you’re going to miss out on a trip you’ve undoubtedly been looking forward to. Secondly, beyond the sadness of missing the trip, you may face financial hardships, too. For example, without travel insurance, you could be left paying out-of-pocket for all or most of your trip costs. But, with a travel insurance policy, you can file a claim and be reimbursed for the prepaid non-refundable trip costs if you’re canceling it for covered reasons.

Real-life travel story: The case of the canceled trip

One family traveling with a Travelex policy planned the trip of a lifetime to California. Sadly, illness struck, and they were forced to cancel their dream trip. Their travel insurance reimbursement was $21,800 – the amount spent on prepaid costs for the canceled vacation — all of which would have been lost if they hadn’t purchased an adequate travel insurance plan.

#7. If you need to cancel your trip for any reason

Sometimes, we want to be protected for all eventualities — no matter how unique or unexpected. And, sometimes, we simply want the freedom to change our plans without crippling financial ramifications.

If you’re concerned you’ll need to cancel your trip for a reason not covered by base plan benefits — or you may want the flexibility to change your mind — it’s worth considering Cancel For Any Reason (CFAR) coverage.

A travel insurance policy that includes CFAR coverage can help you stress less before your trip, as well as give you the freedom to abandon your vacation plans for any reason before departing on your trip. 

Real-life travel story: The case of the change of mind

A Travelex traveler decided they no longer wanted to take their trip to Colorado. Thankfully, they included CFAR coverage in their Travelex travel protection policy, which allowed them to cancel their trip for any reason up to 48 hours before their departure and provided them with a partial reimbursement of their prepaid non-refundable trip costs.

Save money with travel insurance by protecting your next trip

Vacations are often not cheap, and there are always times when travelers must choose to splurge or to save. When it comes to travel insurance, spending a little bit of your travel budget on a travel insurance policy before you depart can end up saving you a lot of money in the long run.

To protect your next trip, compare our travel insurance plans to see which one may be right for you or get a quote online now.

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_{The information in this article is correct at the time of writing on August 3, 2023, and may change at any time. The product descriptions provided here are only brief summaries and may be changed without notice. The full coverage terms and details, including limitations and exclusions, are contained in the insurance policy. If you have questions about coverage available under our plans, please review the policy or contact us at 1-800-228-9792 or [email protected]. Travelex Insurance Services, Inc. CA Agency License #0D10209. Travel Insurance is underwritten by Berkshire Hathaway Specialty Insurance Company; NAIC #22276.}

_{*The Cancel For Any Reason upgrade may not be available to residents of all U.S. states. If this upgrade is available to you based on your state of residence, you will be offered the opportunity to include this upgrade in your policy when getting a quote online. Purchase restrictions apply.}