8 Reasons you should or should not get travel insurance
Travel is all about freedom, and topics like travel insurance can take the fun out of things, but it’s an important decision that will affect your journey. Some sources insist that everyone should always get travel insurance for every trip, but honestly there are plenty of cases where it’s probably not worth it.
Here at Price of Travel we like to consider value in addition to quality, so we won’t tell you that travel insurance is always the wise choice. It’s a complicated issue, and a very personal one as well, so below we’ll discuss four main examples or reasons why travel insurance might not be worth it, and then four reasons why you might actually want it.
It’s worth noting that there are many types of travel insurance, from a simple policy to cover your gadgets in case of theft, up to a comprehensive policy that will pay to air-lift you to the closest first-class hospital anywhere in the world. The cost obviously varies, as do the risks. Read below to decide for yourself, or you can get a travel insurance quote here to help you decide.
4 Reasons you should not get travel insurance
1 – Travel insurance doesn’t keep you healthy or safe
For all of the benefits of travel insurance, two things it doesn’t do are keeping you healthy or safe. Chances are great that you’ll return from your trip in one piece and with all your gear intact, and buying travel insurance before you go doesn’t improve those odds. In fact, it’s possible that people with travel insurance are more motivated to take chances (as we’ll discuss below), so it might actually increase the chances of something going wrong.
What travel insurance does do, of course, is to prevent you from going broke if something actually does go wrong. There might be rare cases where someone without insurance got air-lifted out of a canyon while without insurance they would have been left to die, but honestly, your chances of being killed by a falling coconut are probably greater in the long run.
2 – You might be going somewhere where risks are incredibly low
Some people insist on getting travel insurance regardless of where they are going, but for many kinds of trips it’s really a bad bet. For example, if you are going on a cultural tour of the United States or one of the richer parts of Europe, the chances of anything going really wrong are so remote that it’s just not worth the cost.
It’s common sense, really. Going on a golfing trip to Florida might increase the risk of a sunburn, but you might be adding 10% to the cost of your trip for the tiniest chance of ever needing insurance. On the other hand, if you are going zip-lining in the jungles of Costa Rica, the risks are real in many ways. Just don’t automatically get travel insurance for the lowest-risk trips.
3 – Travel insurance is basically betting against yourself
This is a psychological thing that keeps some people from getting travel insurance, for better or worse. Travel insurance – and really all insurance – is simply betting a small amount that something is going to go wrong. As mentioned up top, it doesn’t actually keep you safe, it just pays off if things go badly.
There are risks in everything, including in staying home instead of taking that trip. Some people feel that betting against yourself might increase the chances that something goes wrong. If you don’t make that bet, you might be more careful and financially better off as well.
4 – You might be better off self-insuring
The idea of self-insuring makes sense for some people in some situations, and yours may be one of them. Lets say you have $10,000 in the bank and you buy $1,000 for a new iPod and a laptop for a trip. If they happened to get stolen it wouldn’t cause much hardship because you can afford to replace them pretty easily. In a case like this, it doesn’t make any sense to pay more than a tiny amount to cover replacement costs if they get stolen. In the long run, you will be much better off never insuring your gadgets and just replacing them if they ever get stolen.
The same could actually be true for even medical costs, although there is the risk of a catastrophic event that you probably could never cover. Still, if you are going rafting down the Grand Canyon and you brake your arm on some rapids, you can probably come up with US$800 for the X-rays and cast at a clinic. If you have savings available then buying insurance to cover small things is probably a bad bet.
4 Reasons you should get travel insurance
1 – Your family would strongly prefer you had travel insurance
Most travelers are free spirits and are able to deal with some risk. Especially travelers who’ve been to a lot of places know that the world isn’t nearly as scary or dangerous as one might think in your home town. However, loved-ones of travelers are often freaked out about all the potential risks because they usually just hear about crime and accidents and disasters in other countries, rather than about the 99.9999% of people there who are just fine.
It doesn’t matter how old they are, if your parents are still alive, they are worried about you, and even more than usual when you are traveling around places they’ve never been. Getting travel insurance will feel like a security blanket to them, partly because it sends a signal that you aren’t a lunatic and you actually care about your own well-being.
2 – Being insured gives you more freedom
When you are in Disneyland, at any of their worldwide locations, you will see safety railings and big fences and gates to keep guests out of any dangerous areas. In most of the rest of the world, there are no safety railings. Many normal tourist activities are at least a little risky, especially in poor countries where there aren’t strong laws and armies of lawyers making sure no one ever twists an ankle on a loose rock.
Let’s say you are hiking the Inca Trail to Machu Picchu in Peru or climbing Mount Kilimanjaro. It’s not too uncommon to get hurt on either one of those, and without travel insurance you might be terrified to leave the main part of the trail for fear of an accident. But if you are properly insured, you can bounce around like everyone else in the group with confidence knowing that even if something does go wrong, it’s all handled. Going on a trip and then having to skip things that seem risky is not an ideal way to travel.
3 – Not being insured might ruin your life
True story: A friend of a friend of mine went to Thailand, rented a motorbike to drive himself around Phuket, and was nearly killed by a local truck that hit him. The last I heard he was in a hospital there in terrible condition and his family was trying to raise money on the internet to help fly him back to the UK to get the operations he’d need to recover. I’m not sure they raised enough money or if he ever got out of Thailand.
Unfortunately, stories like this are more common than they should be. I know of other examples of people I’ve met, and in a few cases they will be broke for decades trying to pay off medical bills, or they didn’t get the proper care and their health continues to be affected. Renting motorbikes in particular seems to cause more than half of these incidents, so skipping that might be wise. But buying travel insurance is an even better way to know that an accident won’t ruin the rest of your life.
4 – Travel insurance is a great gift for a traveler
One really convenient solution for many people to all of the above is to get travel insurance as a gift from a loved-one. Especially if you are going on a longer trip of multiple weeks or months, many families will offer to help out by buying a backpack or some other gear. Your travel gear is usually very personal so you want to pick it out yourself, but travel insurance is hard to screw up.
It can actually be an easy sell to parents in particular, because travel insurance feels like a gift to them even though your name is on the policy. As discussed, parents will worry, but they’ll worry much less if you are properly insured. You’ll feel better and so will they, so it’s an ideal compromise for both parties.
Get a quote from the best company out there
If you decide you might want travel insurance then please get a travel insurance quote to see if it’s worth it for you. We have partnered with World Nomads, which is the Australia-based industry leader for travel insurance. They cover people from nearly anywhere going to nearly anywhere, with custom policies depending on the specific situation.
You might find a cheaper policy elsewhere, but there are some dodgy companies out there that are known for refusing to pay claims. If the whole idea is peace of mind, you don’t want to be rolling the dice on a cheap policy that might not actually be worth anything at all. World Nomads has a reputation to protect so they have to be fair to everyone, and that’s important.
When you pay an insurance, say usd 100, my guesstimate is: 20 goes to the seller. 40 goes to the companie’s administration. 5 goes to the fraudsters. Leaves 35 goes back to the insured. So for gadgets it is a waste of money if you have money yourself to replace them. One may also consider this when considering insuring for e g medical expenses.
Re e g motorbike accidents. Common in the small print is: insurance not valid if you are intoxicated or doing dangerous things, eg river rafting.
And your “cover all” insurance is not of much use when you are unconcious on the road after an accident in eg asia. You may be taken to a hospital. But nothing is done until cash is produced. Cash is king. Always have some with you!
Mr Travel Light
If you’re looking at doing a working holiday in Australia for a year is it worth while just buying travel insurance for a couple of weeks and then look at possible other forms of insurance when out there?
I think reason 3 to get insured is the biggest reason alone for getting travel insurance, in this case medical travel insurance. Adding 10% to the cost of a trip vs. being in debt for years, even if it is the most remote of possibilities, seems like a small price to pay.
Brian, yes, that does make sense, yet some people are happier to gamble than to pay for insurance. Usually the gamble pays off too, but when it doesn’t…(frowny face)