Do I really need travel insurance?

It’s no surprise that this question is the 10th most frequently asked among those who engaged in a Google search during 2014. And surprisingly, the answer is “you may or may not need travel insurance, depending on a couple factors.”

Depending on your level of financial risk tolerance and your destination, travel insurance isn’t for everyone. Instead, insurance has always been about sharing your risk of financial loss with others who share the same risk.

However, one’s level of financial risk tolerance, or monetary loss, depends on the individual and their travel destination. An in-country trip to New Orleans, for example, varies greatly from a European trip. Distance, one’s current medical coverage, the trip cost and the costs associated with return transportation for non-emergency or emergency returns are all part of the equation when asking the question “do I really need travel insurance?”

Consider the vast difference between a $500 expenditure for a week in Florida, for example, versus a $7,000 European cruise. In truth, the domestic trip involves a $500 loss if your trip is canceled. And one’s personal health insurance will most likely cover medical emergencies, despite the fact that the traveler is out of network.

However, the difference in loss becomes major if you’re uninsured and must cancel a $7,000 out-of-country trip, or you’re out of the country and experience a medical emergency, particularly if you’re primary medical coverage is restricted to Medicare. There’s little financial difference between caring for a fractured hip and/or treating a heart attack while abroad than treating the same maladies within the U.S. Without travel insurance, your losses may be astronomical.

So the question of whether travel insurance is a worthwhile investment can best be answered in either of two ways: (1) by those who’ve taken the precautions of insuring their trips, only to find it was a wise investment in the end, and (2) by speaking with your travel insurance professional before deciding.

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