Should You Buy Travel Insurance or Rely on Credit Card Protections for Your Next Trip?
Sophie Carter
Traveling can be exciting, but it’s also full of uncertainties—flights getting delayed, luggage lost, or unexpected medical emergencies. For many, the question arises: Do I need travel insurance, or is my credit card’s coverage enough? The answer depends on your specific situation, but here’s a breakdown of when to rely on your credit card and when to invest in a separate travel insurance policy.
When Credit Card Protections Are Enough
If you’re already using a credit card with robust travel benefits, you might not need extra coverage. Consider these scenarios:
- Refundable Travel Plans: If your flights, hotels, or other bookings are refundable, your credit card’s trip cancellation insurance might be all you need.
- Strong Health Insurance and Emergency Fund: If you have comprehensive health insurance and a sufficient emergency fund, you may not require travel insurance.
- Low-Risk Destinations and Activities: If you’re traveling to low-risk destinations and engaging in relatively safe activities, your credit card’s benefits might be enough to cover unexpected issues.
Pro Tip: Some credit cards, like the Chase Sapphire Reserve, offer trip cancellation, delay, and baggage protection—key features often covered by travel insurance. Check your credit card’s travel benefits before deciding on travel insurance.
When to Buy Travel Insurance
Even with credit card protections, there are situations where travel insurance is essential:
- Non-Refundable Bookings: If your trip is booked with non-refundable tickets or hotels, a “Cancel for Any Reason” (CFAR) policy can reimburse you for unexpected cancellations.
- Political or Natural Disaster Evacuation: Credit cards may not cover evacuations due to protests, riots, or environmental disasters. Travel insurance often includes this coverage.
- High-Risk Destinations: Some destinations (e.g., war zones, areas with health crises) may not be covered by credit card benefits.
- Comprehensive Coverage Gaps: Credit cards might not cover things like personal liability, lost luggage, or pre-existing medical conditions.
- Peace of Mind: If you’re uneasy about relying solely on your credit card and health insurance, a travel insurance policy can provide added security.
Example: The author of this text buys travel insurance only for trips requiring political evacuation coverage, as their credit card and health insurance don’t cover that. For most trips, their credit card’s benefits (like trip delay and baggage insurance) and health insurance suffice.
Your Decision: It’s Personal
The choice between credit card protections and travel insurance depends on your risk tolerance, travel habits, and financial situation:
- If you’re risk-averse or have high-value bookings, invest in travel insurance.
- If you’re flexible and have strong backup coverage, your credit card might be enough.
Key Questions to Ask Yourself:
- Does my credit card cover medical emergencies and evacuations?
- Are my travel bookings refundable?
- Do I have sufficient health insurance and an emergency fund?
- Am I traveling to a high-risk destination or engaging in risky activities?
Final Thoughts
Travel insurance isn’t always a necessity, but it’s a smart safety net for specific scenarios. Credit cards can save the day for routine issues, but they often fall short for major emergencies. Assess your needs, review your credit card benefits, and weigh the cost of insurance against the potential risks. Ultimately, the goal is to travel with confidence—whether that means relying on your credit card or investing in a policy.
Remember: No coverage is foolproof, but being prepared can turn a stressful situation into a manageable one. Safe travels!
Need help deciding? Start by checking your credit card’s travel benefits and reviewing your health insurance policy. For high-risk trips, a tailored travel insurance plan might be your best bet.