Travel costs are rising: What to know before buying travel insurance

Travel is getting more expensive, with average travel costs now 9% higher than this time last year. Airfare prices have also climbed more than 25% over the past year, according to the Bureau of Labor Statistics.

With ticket prices, fees and taxes adding up, travelers are often offered another expense when booking: travel insurance.

Travel expert Brian Kelly, known as The Points Guy, says travelers should think twice before purchasing insurance directly from an airline or hotel, particularly if they are using a travel credit card.

“Travel credit cards often have coverage,” Kelly said, adding that cards with higher annual fees may offer better coverage or terms.

However, travelers should carefully check the details. Many travel credit cards only cover the cardholder and immediate family members.

For international travel, Kelly recommends considering medical insurance as well. Credit card coverage may provide protection for emergencies and emergency evacuations, but it may not provide comprehensive coverage for hospital visits.

For those looking for standalone travel or medical insurance, Kelly recommends comparing policies through InsureMyTrip. According to the site, travel insurance generally costs about 4% to 10% of the total trip cost.

Travelers should also understand that standard policies may have exclusions related to political unrest or acts of war. If the U.S. State Department issues an evacuation warning for a destination, regular travel insurance may not cover a traveler who decides to cancel the trip.

In those situations, Cancel For Any Reason, or CFAR, coverage may provide additional protection. However, CFAR insurance is generally more expensive and is considered a last-resort option.

Before purchasing coverage, experts recommend comparing policies, checking existing credit card benefits and reviewing travel advisories for your destination.

For Consumer Watch, I’m Jen Sullivan.

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