Is travel insurance worth it? What to know before taking your next trip

With the unofficial start of summer and after more than two years of pandemic uncertainty, travelers are ready to get away – regardless of high prices.

Americans are expected to spend, on average, $2,644 on summer vacations, 30% more than in 2019, according to the latest Vacation Confidence Index from insurance providers Allianz Partners USA.

However with COVID-19 cases on the rise again, Hurricane Agatha hitting Mexico and the Atlantic hurricane season starting June 1, those long-awaited vacation plans could still change.

Fifty percent of U.S. adults have had to cancel a trip because of COVID-19, according to a Forbes Advisor survey in April, and more than 80% of those who canceled lost money.

"If you're booking a trip and you're not worried about losing all that money in case of an accident or illness or hurricane that interrupts the trip ... then OK, but I think most people are not that lucky," said Jeremy Murchland, president of Seven Corners insurance company.

Travel insurance can help protect sunk vacation costs, but it's most helpful when trips go awry.

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Is it worth it to pay for travel insurance?

It depends.

For relatively common things like flight disruptions, domestic travelers already have some protections through the Department of Transportation, which requires airlines to offer refunds when flights are canceled or significantly delayed. Credit companies will go to bat for customers, too.

"Your credit card is phenomenal ... for disputing any type of transaction," said independent personal finance expert Matt Granite, known as The Deal Guy on YouTube.

Hotels and vacation rental companies may make exceptions or rebook stays for guests in extenuating circumstances, even when stated policies say no refunds for last-minute cancellations.

Theme parks generally won't refund tickets, but will work often with guests dealing with emergencies and COVID-19.

Many cruise lines, like Carnival and Norwegian, will offer future cruise credit for guests who contract COVID-19 within days of their sailing, but they may not be as flexible if guests cancel for other reasons.

Travel insurance can help customers who want refunds rather than rescheduling and other benefits, but it's most crucial for travelers who get sick or hurt abroad.

"If you break an ankle or, God forbid, I was just reviewing a case the other day, somebody overseas, they were riding one of those scooters and got hit while they were riding the scooter and (had a) traumatic brain injury. We had to make sure they were evacuated out of the country," Murchland said. "Accidents do happen with people. That's the reality. So travel insurance becomes important just for your own protection, not just financially."

Daniel Durazo, director of external communications for Allianz Partners USA, says they average one medical evacuation every week.

"Those tend to be very expensive," he said. "They start in the tens of thousands. It can go up to $100,000 depending on where you're coming back from. They don't want to have to pay that out of pocket."

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Does my health insurance cover international travel?

A lot of times, no.

"A lot of domestic health insurance plans aren't going to," Murchland said. "They either won't provide any sort of insurance outside of the country or it's out of network; you have to pay out of pocket. They won't provide evacuation or repatriation services. So it's just very limited."

He says hospitals abroad may also want to hold personal credit cards on file or demand guarantees for payment before services are provided.

"So then we get involved," Murchland said. "We work with partners that give what's called a guarantee of payment to get you the care (and) cover you financially while you're down there."

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What is not covered by travel insurance?

Quite a bit, which is why travelers need to read terms closely.

Medical coverage may not be included or even offered to domestic travelers because their regular health insurance covers medical care in the U.S.

"It depends on the partner offering the insurance and what coverage and benefits they think their specific customers may need," Durazo said. "Some domestic travelers like to purchase travel insurance with emergency medical coverage because they may have a high deductible health insurance plan. Travelers who want emergency medical coverage should read their policy to see if it is included and call their insurance provider if they need a product that includes it."

Pre-existing conditions are not covered by most policies, but travelers can get waivers for some diagnoses to help prevent coverage claims from being denied.

Hurricane coverage depends on timing. Travelers need to purchase insurance plans before hurricanes are named.

"The thing you need to remember about travel insurance, we only cover unknown, unforeseen events," Durazo said. "Once a hurricane is named, then it's considered a known event. ... Insurance doesn't cover foreseeable circumstances."

Granite warns there may also be clauses to watch out for when it comes to hurricanes.

"It's really important to note that a lot of the insurance only kicks in if your travel is directly affected by the path of a hurricane, so it's not cut and dry," he said. "If you were flying and there's the chance that your flight can reroute you three times, but to stopovers and you can still get to your destination around the hurricane, they might actually deny your claim."

The reason for cancellation also matters. In most cases, travelers can't cancel their trips just because they feel like it. Cancel for Any Reason plans do exist and cost more than other types of plans, but even then travelers may not get back all the money they've put into a trip.

"In most cases, Cancel for Any Reason is not 100% reimbursed," Murchland said. "You're reimbursed up to a certain percentage of your total trip cost. Maybe it's 60 to 75%, but it's not 100%. But still, 75% of the big number is better than zero if people's plans change."

How do I find the right travel insurance?

There are multiple ways to purchase travel insurance.

Travelers can purchase insurance plans directly from providers like John Hancock, AIG Travel and Seven Corners, which Forbes Advisor called the "best value for superior coverage" this June.

They can also check a box for travel insurance or trip protection during the checkout process for some airlines and online travel agencies like Priceline, Kayak and Expedia, which work with Allianz. Allianz also offers coverage through travel agents and its own website.

"The goal is to provide the consumer with the best product for their particular trip," Durazo said. "And that helps give people the coverage they will need for their particular itinerary, and it also prevents them from purchasing coverage that they may not need."

Granite generally recommends sticking with the trip protections offered for free by major credit cards, instead of purchasing travel insurance, but for travelers who want the extra protection, he recommends comparison shopping on SquareMouth and InsureMyTrip.

"They are independent, third-party websites that will allow you to see the cost of insurance, side-by-side compared to different policies," Granite previously told USA TODAY. "A lot of the time, the way these search engines will present the policies to you will highlight some of the exclusions that you'd need to see (and) that you wouldn't otherwise be able to ascertain unless you sat down with a lawyer reading through the documents, word by word, page by page."

Durazo urges travelers to stick with vetted members of the U.S. Travel Insurance Association. In addition to researching online, Murchland recommends speaking directly with agents who can help answer specific questions.

This article originally appeared on USA TODAY: Even if you don't need travel insurance, here's why you may want it