Is travel insurance worth the costs?

Clare Fisher has only had to use travel insurance once in all the years she’s been jet-setting across the world with her family, but she says she would never go without it.

“I have heard far too many stories from family and friends where people have been left to fork out fortunes because they didn’t have travel insurance after something happened during their travels,” says the mum-of-three and full-time travelling content creator behind the Instagram account @traveltheworldfamily.

“The thing is, you think it will never happen to you and sometimes it just does.

“As well as giving you peace of mind, if you do end up needing to claim, it could save you a lot of money.”

Travel insurance covers expenses and risks associated with being a tourist, whether for business or leisure, and packages can cater for both domestic and international travellers. This can include medical expenses, but also assistance with lost passports, money wires and rebooking cancelled flights.

Natural disasters such as earthquakes, hurricanes and wildfires are also often covered, and packages can often be customised to the needs’ of the customer and their destination.

Growing markets

It is a big market. In the US alone, the industry is projected to reach a value of $5.5 billion by 2028 from $4bn in 2022, according to a report on researchandmarkets.com.

Within the study, this is attributed to increasing disposable income and a rise in business tours and travel. This year, international tourism will increase by 15 per cent year-on-year, according to data shared by United Nations World Tourism Organisation last month. It is also projected to exceed 2019 levels by 2 per cent.

Another reason for the market’s growth is that insurance providers have become savvier in terms of their offerings, expanding the availability of products, including single and multi-trip, as well as annual, policies, plus add-ons such as adventure tourism and more. The convenience of buying through online channels helps, too.

There has also been a growing awareness of the importance of having a policy in place. Nearly half of Americans have faced fines or had to bear the cost of damages when travelling without insurance at some point, according to a 2021 survey by insurance provider Battleface. The Covid-19 pandemic also presented many issues for anyone who was away from home when they got sick or when lockdowns were announced.

The same research found 36 per cent of Americans were more inclined to buy insurance now than pre-pandemic, particularly for international travel.

At the same time, the pandemic made customers more skeptical of the benefits, as many providers were ill-prepared to offer coverage for trip cancellations due to death.

The recent research also shows individuals in underdeveloped and developing nations are more reluctant than ever to pay for insurance services.

Check the fine print and don’t skimp on costs

Fisher secures her family’s policy with a bank account subscription that provides the travel insurance, phone insurance and car breakdown cover, among other things. “We travel a lot, so having a subscription like this that we never have to renew is a big perk for us and the whole family is covered,” she says.

Mum-of-three Clare Fisher is a full-time travelling content creator and says she will never travel without insurance. Photo: Clare Fisher

But the policy only covers them for up to 31 days on one trip, so for any long stints it will require extra or different types of coverage.

She advises everyone to search for the best prices, but “make sure you are aware of absolutely everything you are and aren’t covered for”.

“While that fine print may be pages and pages long, it’s worth reading or calling and going through your policy with your provider,” she says. “You might be surprised about some of the things you are covered for and this could provide some emotional and financial relief in situations you just never expected to get it.”

It’s also important not to assume you’re covered for everything, she adds. “Especially if you’re looking for the cheapest price, as you could very well be sacrificing important cover.”

For example, if you plan to take part in any experience or activities, whether that’s a walking tour or bungee jumping, it’s worth checking whether or not these are covered if anything goes awry.

It’s also important to declare any previous medical history, no matter how small it may seem, as it might just void the policy.

“It’s worth checking that the package you’re looking at covers you in these situations and any reasons and circumstances why you might not qualify,” says Fisher. “Your level of cover can be tailored to you, so it’s always best to chat to someone.

“I’d also say it’s helpful to call ahead of your trip and ask what details you should keep to hand and are likely to need to provide, as it can be stressful trying to frantically find this in the already stressful situation you may find yourself when needing to use your travel insurance.”

The best time to buy travel insurance

After you’ve made your first or larger booking is the time to purchase your policy, says Terry Boynton, co-founder and president of Yonder Travel Insurance. “Start by insuring your initial deposit and increase the trip cost insured under your policy each time you make an additional payment toward your trip,” he adds.

“Once you’ve nailed down your trip details, you can determine what benefits will be important to have included in your plan.”

The earlier you get it, the more peace of mind you’ll have before the trip even begins. For example, if a weather-related issue, sickness or family emergency comes up that means you cannot go anymore, these trip costs will be protected if you have already bought insurance.

Another reason to buy early is so you can choose optional add-ons such as Cancel for Any Reason or Pre-Existing Condition Waivers, which often must be bought within a specific time frame after the initial deposit.

It is possible, however, to buy travel insurance up until the day before your departure. Coverage wouldn’t apply if you try to buy a policy after an accident or natural disaster at your destination.

The Fishers had to use their policy when their son poked himself in the eye with a straw and they needed to get it checked by a doctor at a hospital where they spoke no English. “We felt so much better knowing that we had insurance, especially when we called from where we were and spoke to someone,” says Fisher.

“I will never forget why I believe so much in it. When I was in school, a friend of mine went on holiday and her dad drowned in the sea. The family had such a difficult time, had to fly him back home and I remember hearing about how helpful the insurance company was through it all and what some of the costs associated with this would have been if they hadn’t had it.

“When your family has suffered a loss like this, money and the logistics is the absolute last thing you want to be worrying about,” she adds.

“If you’re travelling in any capacity, I can’t think of any reason that you shouldn’t have travel insurance.”