Several times a year, we field reader questions about travel insurance. Unfortunately, I don’t have a lot of insight into travel insurance because I never buy it. That’s not to say that you shouldn’t buy travel insurance. I put that in bold to make sure you didn’t miss it; this post is not meant to discourage you from buying travel insurance if you decide that it makes sense for you. Many people buy travel insurance and I’m sure you won’t have to wait long for a comment to come in about why someone was grateful they had it. This post isn’t to tell you not to buy travel insurance. If I were going to consider buying travel insurance, it would be to cover against medical emergencies. I’m not concerned with buying travel insurance to cover “travel” emergencies. Instead, I self-insure against those with habits I’ve picked up from this miles and points hobby.
Book using a card with trip delay / cancellation / baggage protection
I always book my trips using a credit card that offers coverage against trip delay or cancellation and baggage protection. All of my flights go on a card that offers this coverage.
We have a complete guide to ultra-premium credit card travel protections, where you can compare the offerings from various cards. However, my clear favorite of the bunch is the coverage that comes standard on the Chase Sapphire Reserve or Chase Ritz-Carlton Visa Infinite. All of my flights go on one of those two cards, including award flights. That’s because trip delay & cancellation protection kicks in on those cards when you pay any part of the fare with your card. This means that using your Sapphire Reserve or Ritz card to pay the taxes & fees for an award ticket, even in cases where those taxes and fees are just $5.60, activates trip delay and cancellation coverage (as well as lost luggage reimbursement, etc).
In all of my travels, I’ve only had occasion to actually need trip delay coverage once, but the night when I got delayed overnight and got stuck paying for a hotel that cost more than $400, I was certainly glad to have the peace of mind that I’d get reimbursed thanks to the trip delay coverage I had gotten by putting the taxes on the right card.
It’s worth mentioning that I never use an airline credit card to buy my ticket. I keep some airline credit cards for free checked bags, but we can earn 3 transferable points per dollar spent using the Sapphire Reserve and we get excellent travel protections when using that card, so in most cases it just doesn’t make sense to use the airline credit card for an airline purchase. Note that you do not need to buy your ticket with your airline credit card in order to get free checked bags from your airline credit card (if your card offers that benefit) unless it is a United card (unlike other airline credit cards that offer a free checked baggage benefit, United does require that you use your United card to pay for the flight and/or award taxes). See our Free checked bags via credit card complete guide for more detail.
If your trip gets cancelled for a covered reason, the Sapphire Reserve or Ritz card cover you for up to $10,000 per person / $20,000 per trip in nonrefundable travel expenses. Luckily, I haven’t yet had to make such a claim, but I’ve heard from readers who have had approved claims in the five figures.
Book easily refundable awards
Most of the flight bookings I make are easily refundable, either for free or quite cheaply.
Great award pricing is of utmost importance to me, but I also keep a keen eye toward those programs which offer free or cheap award cancellations whenever practical. I’m not willing to significantly overpay for an award to have a cheaper cancellation policy, but there are a number of programs with award cancellation fees of $100 or less.
See a full guide to award ticket change and cancellation fees by transfer partner in this post. Some of my favorite programs for free or cheap cancellation are:
- American Airlines AAdvantage (free changes and cancellations)
- Southwest Rapid Rewards (free cancellations)
- United Mileage Plus (free cancellations)
- British Airways Executive Club ($55 or just forfeit the taxes if the taxes & fees are less)
- Virgin Atlantic Flying Club ($50 or just forfeit the taxes if the taxes & fees are less)
- Air France / KLM Flying Blue ($70 chance or cancellation fee)
- Avianca LifeMiles (free changes and cancellations with LifeMiles+ Basic subscription or higher)
Note that the above isn’t an exhaustive list but rather some of my favorite award booking programs from an award change & cancellation standpoint. See the post linked above for full details.
I love that LifeMiles now offers free award cancellation (72hrs in advance or more) with a monthly subscription to LifeMiles+ Basic or higher. LifeMiles has historically offered some great award pricing, but particularly punitive change and cancellation fees. Since the launch of the LifeMiles+ subscriptions, things have improved. If you’re willing to subscribe to LifeMiles+ Basic or higher, the program feels much more user-friendly.
In addition to booking freely or cheaply refundable tickets, I also tend to book one-way award tickets in either direction instead of a round trip. My rationale is that I want to be able to change one side of the trip without messing with the other. If my flight gets significantly delayed or cancelled on the outbound, I want the freedom to book something completely different (perhaps on a different airline/alliance) to get me where I need to be without jeopardizing my “return” leg. If, for instance, my “outbound” flight gets delayed for hours, I can easily cancel it and book something entirely different without losing my desired “return” leg so long as I’ve booked separate one-way awards.
The “Crowdstrike” event of 2024 is a prime example of why I’d rather have separate one-way trips: if my outbound flight got cancelled in that debacle, I’d like to be able to immediately book whatever replacement I want rather than being limited to what the operating airline can do to accommodate me and/or trying to figure out what might be reimbursed by my travel insurance.
Many airline programs offer free cancellation or low cancellation fees like $25-$75 per passenger. If I can get my miles back for a nominal fee, I’m not concerned about insuring against paying those amounts.
Book flexible rates
Hotels
In the past decade, I’ve probably only made 3 or 4 nonrefundable hotel bookings. Generally speaking, I have no interest in locking myself into a booking with no way to cancel if my plans change or if I find a better way to stack a deal. While prepaid rates sometimes offer modest savings over refundable rates, I often find that AAA rates are refundable and approximately match (or sometimes beat!) a hotel’s nonrefundable rates.
I also like to maintain flexibility. Plans may change unexpectedly, but I also want the ability to jump on a better deal if I find one. For instance, if a shopping portal suddenly offers a high percentage back or a sale drops the price at an even nicer hotel to be significantly better, I want to be in a position to take advantage of the better deal. I have many times rebooked a hotel when rates have changed and ended up saving far more than the original “nonrefundable” rate.
I highly value hotel award bookings because most hotel award bookings can be cancelled for free up until a day or two before arrival (with some exceptions; always read your hotel’s cancellation policy carefully before making your booking).
Speaking of the cancellation policy, keep in mind that you may have even more flexibility than you think. For instance, Hyatt Globalists get a 24-hour cancellation window even when the hotel’s cancellation policy for the general public says 48-hours (though if the hotel has a cancellation policy of more than 48 hours, you’ll be held to that publicly-stated policy). I have also sometimes found it possible to change a hotel reservation even after the cancellation deadline has passed. For instance, I had a reservation for a hotel with a 48-hour cancellation window, but at the 24-hour mark (prior to check-in), I was able to change the reservation to be for a date a few months in the future. Then, I could cancel any time before the new deadline. In cases where I haven’t been able to do that online, I’ve sometimes had luck calling the hotel front desk and pleading my case.
Again, I use the Sapphire Reserve or the Ritz card to pay for the rare prepaid hotel booking so that I have trip cancellation insurance in the event that we need to cancel.
Car rentals
Most car rentals can easily be cancelled for free up until the time of pick up (and some can even be cancelled later than that).
You can sometimes score a small discount by prepaying for a car. However, I don’t usually do that. Instead, I book a flexible rate and then use rental car comparison site Autoslash.com to track rental prices. I then cancel and rebook repeatedly as prices change, which might not be possible with a “pay now” rate.
I did recently pay in advance for a reservation I made through Autoslash with a “Pay now” discount. In that case, I paid using my U.S. Bank Altitude Reserve. That card also features very good trip delay and cancellation coverage and it also offers a chance to use points toward paid travel at a rate of 1.5c per point when redeeming via Real-time mobile rewards.
One additional thing that the Altitude Reserve shares with the Chase Sapphire Reserve, the Ritz-Carlton Visa Infinite, and several other travel cards on the market is that they all offer primary rental car collision damage waiver (CDW). That feature covers damage to the car in the event of an accident. Our own Stephen Pepper had to make a claim several years ago for a rental car damaged in a hail storm. I always rent a car with a credit card that features primary CDW coverage.
Tours
I rarely book tours, preferring instead mostly self-guided travel. However, in recent years, I have on occasion booked prepaid tours. In those cases where I have booked in advance, I’ve used popular sites like Viator and Klook, which have offered free cancellation up to 24 hours in advance for most of the things I’ve booked.
Much like hotels, I would be pretty hesitant to book a completely nonrefundable tour. That said, if I were in a situation that required it, I would likely book with the Chase Sapphire Reserve or Ritz-Carlton card for excellent trip cancellation coverage.
Book backup flights
When I really need to get somewhere and can’t afford a misstep, I occasionally book a backup flight using one of the many programs with free award cancellation.
For instance, if I need a positioning flight for an important international award or I need to arrive on a specific day for a meeting or event, I’ll often book a backup secondary flight with American Airlines AAdvantage, United Mileage Plus, or Southwest Rapid Rewards. That way, if my primary flight takes off as scheduled, my trip won’t be ruined.
I don’t always book a backup flight, but when it’s important that I get somewhere on a specific day or time, I tend to ensure that I’ll get there by making sure that my “Plan B” is covered before a disruption occurs. In those cases, I usually set a reminder to cancel as soon as I know that my primary plan has gone forward without issue. One time, when I had not booked a backup flight but arrived at the airport and saw an unbelievably long line for airport security, I immediately got on my phone and booked a backup flight knowing that many of the people in line were likely to miss their flights and need to rebook. When I got up to the TSA agent, I had already missed my first flight, but I had the boarding pass already for the second flight I’d booked and I therefore got to skip the long line of passengers waiting to be reaccommodated on my initial airline.
Note that you probably can not book your “backup” flight with the same program through which you’ve booked your “primary” plans. If an airline sees two bookings for the same passenger on the same day and it is impossible to make both flights, they may cancel either or both of the bookings. I therefore use a different program / airline for my backup plans.
What about medical events?
While my booking habits mostly make it easy enough and/or cheap enough to cancel plans when necessary, the big question mark is what happens in the case of a medical emergency.
That’s a great question that I can only partially answer. I think that coverage for medical emergencies is the most important reason why a credit card rewards enthusiast might still consider buying some type of travel insurance. In the couple of cases where I bought travel insurance, a potential medical emergency was the core reason for buying insurance.
On the one hand, medical costs outside of the United States can be very reasonable in many (most?) scenarios). My wife got double ear infections in South Africa on a trip 8 or 9 years ago. The emergency room bill, which included the visit itself and the medicine they gave her, came to about $105. I had paid our award taxes with a card that included some emergency medical coverage, but I never bothered making a claim.
On the other hand, I’ve heard from readers who have encountered horrific accidents that required extensive (and expensive) medical treatment. There are plenty of worst-case scenarios to imagine. If I were shopping for travel insurance, medical coverage would be the single most important component for me.
That said, there are some medical coverages provided by popular cards. In our guide to ultra-premium credit card travel protections, you’ll see that the Chase Sapphire Reserve and Ritz cards offer up to $2500 in emergency medical and dental coverage. Additionally, the Amex Platinum and Centurion card holders get emergency medical evacuation coverage, with no requirement to have used the card to pay for any part of the trip. A friend had to make use of this benefit while on a cruise a couple of years ago and was flown back to the United States with Amex covering the full $27,000+ bill. I will note that they reported having to advocate a bit for the medical necessity, but Amex approved it with minimal pushback. It’s worth noting that many readers have commented about how Amex’s coverage only guarantees transportation to “a more appropriate medical facility or to a hospital near the person’s home as determined by the Premium Global Assist Hotline designated physician”, whereas travel insurance policies specializing in medical evacuation can be purchased to guarantee transportation to the hospital of your choice.
At the end of the day, emergency medical coverage isn’t well-provided by credit card benefits and is the primary reason I think it could be worth buying insurance.
Bottom line
Readers often ask us for travel insurance recommendations, but the truth is that I have rarely bought it. If I did buy travel insurance, it would be for medical coverage because I look to my credit card and booking habit strategies as a means of insuring myself against travel-related problems. Credit cards definitely leave a gap on the medical side, but I don’t worry much about travel plans changing since I know that I can afford to cancel a trip if necessary.
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I know to cover a trip, you have to put some or all of the flight on the CSR or Ritz. Do you also have to put the tours on that card also for those to be covered?
[…] Some really good tips here: Ways I “self-insure” my trips (with strategic booking and credit card choices). […]
“…you’ll see that the Chase Sapphire Reserve and Ritz cards offer up to $2500 in emergency medical and dental coverage” : I looked at your linked article (says “Any part of common carrier transportation” should be paid with the card) — for a baggage or trip-delay issue, the award taxes makes sense. Wasn’t clear how that applies to emergency medical — if you buy a o/w award ticket for Europe, pay $5.60 in taxes on the CSR/Ritz, and end up in the ER two weeks later, is that somehow covered? or they might need a round-trip to identify the period that’s covered (though one could get a return 1 year into the future)… Wondering, Thanks!
Credit card insurances look great until something happens and then one realizes that they have no coverage. During the pandemic, especially those first 4 months, no travel insurances covered cancelations for Covid. I know because I had both Chase and a private policy. Both of them refused claims. Now all policies cover pandemics.
There are couple situations that credit card policies really fail at: huge medical expenses and medical evacuations. The number 1 overseas incident for Americans is getting hit by a vehicle. Experts say it occurs because so much of the world drives on the opposite side of the road versus the USA. Keep that thought in mind and plan accordingly.
Getting the credit card insurers to help is not easy. There are numerous obstacles to overcome. Heck, even regular travel policies require hoops to jump thru before they do anything. I always bring all of my cards, because many of the foreign healthcare providers require payment upfront! Again, something to keep in mind.
In the travel agents industry, 2 things, cause agents to always recommend policies: costly trips and age of travellers. Remoteness of the destination is also a consideration. But don’t be fooled that your CC coverage is enough because in a serious accident, it won’t be enough. Furthermore, none of CC coverages cover return of remains to your home city. Bringing a body back to the USA is costly.
Where is the button for AI “summarize this way too long article?” Nick is great and AI is for sure soaking up all his great information so we can have it all referenced in fmGPT. But a few bullet points…please…?
The solution for health coverage on travel for frequent travelers is to purchase annual travel insurance. They are fairly cheap.
I reside outside of the US and while on a 6-week trip to the US, without insurance, my wife got bitten by a dog. Her injuries treatment and two rounds of Rabies shots were billed around $10k. We got the last two shots in Portugal for free.
To add insult to hurt, I was reminded about my Ritz Medical Emergency coverage by the post. But now I am more than 90 days from the incident.
I recently called my health insurance (BCBS) regarding international coverage, and was told that international emergency doctor visits were covered by the plan (BCBS Global Core network). I asked around and learned that it was somewhat common with private insurance plans.
I agree that medical insurance is the make-or-break part of the decision. My health insurance covers me when abroad so I don’t need separate travel insurance. If I didn’t have foreign coverage I would consider it. The other part of my travel insrance is evacuation. The premium Amex cards I have (Platinum and Aspire) cover me. Other credit cards have caps of 100k or less, which isn’t enough. You don’t need to put any charge on those cards to use medical evacuation insurance either (unlike trip delay insurance).
I know it sounds like splitting hairs but you do, in fact, buy travel insurance. The coverage you rely on from credit cards is an insurance product and you pay for it in the annual fee of the card. The question is whether to buy an additional, third-party policy.
Good point!
As well as United, doesn’t Alaska require using their card? “Note that you do not need to buy your ticket with your airline credit card in order to get free checked bags from your airline credit card”.
I recently purchased tickets for a friend through AmEx Travel who had an Alaska credit card, and it didn’t show they had a free bag available to them.
I contacted Alaska CSR, who said that to get the benefit, one would have to book a flight using their Alaska card.
I thought this was odd because I’ve purchased many flights using my CSR card on Alaska and received a checked bag, but I also have MVP Gold. I can’t recall if I received bags prior to having the status.
I would love a solid answer to this.
Nick, Doesn’t Costco requires 18 months to be a new member? How to get around that? My membership just ended end of June.
Thank you!
Sorry, I don’t know.
In business school I recall a discussion about insurance, with the conclusion being that you should basically never buy insurance except to guard against catastrophic losses you could not recover financially from (life insurance for single income family), or as a legal requirement (car insurance). After all, insurance is simply making a bet, with the odds set extremely in the company’s favor. How else do you think they make profit long term? They’re very good at determining risk pooled over a large number of people (actuarial tables).
You’re better off taking that money you would otherwise spend on unnecessary insurance (life insurance when you don’t have dependents, full collision on a car that’s paid off, travel insurance, supplemental health insurance life Aflac, car repair insurance, extended warranties, etc.) and investing it. 99.9% probability you’d end up wealthier over the long run.
So of course someone will come along and say travel insurance saved them. Saved them from what? A $500 bill? That’s not life changing. And for every $500 it saves one person, others will be paying in $2000. That’s how it works.
Don’t buy travel insurance! Especially since in this hobby it’s so easy to get some coverage for free with credit cards and as Nick does with smartly planned bookings.
Interesting. In law school we had a similar discussion, and the take home was that people are under insured.
A $500, $2,000, or $10,000 is not a big deal for an unexpected expense. $100,000 tho? $250,000? That would hurt. Hence insurance to protect for those situations.
However, deductibles are generally too low. With car insurance I can go up to $2,000 with my policy. That works. If a repair is under that amount, I’m not going to be submitting it as a claim anyway.
I don’t have that ability with travel insurance. I would think this would be offered, as it would get rid of a lot of the nuisance and nonsense claims (read Reddit to see what people try to get covered).
Make the deductible $10,000. If someone incurred $10,000 in emergency medical expenses on a trip, generally you know it’s a real thing. The only thing they’d have to look for is the preexisting condition sort of thing.
Well that’s basically what I’m saying. Insure against catastrophic losses, don’t prepay for normal expenses.
It doesn’t shock me that lawyers think people should have more insurance, since suing insurance companies is how many make their living.
Hi, Nick-Does any part include hotels? For instance, if I use a hotels.com gift card and pay a small part of my card, do I have coverage?
Also, how does Chase define a “trip.” For instance, if I am on a long trip, does it makes sense to put different segments on different cards to break up the trip to not exceed the per trip cap?
Thank you for an insightful article.
I suspect my husband and I are older than your average readers. One thing to remember for medical coverage is that Medicare does not provide any coverage outside the US, so we always take travel insurance out for medical coverage. The company we use, Travel Insured International, is primary coverage. The one time we didn’t take out medical coverage (because we were “only” going to Canada), my adult daughter ended up in an emergency room in Montreal. It turned out to be a bad stomach virus, but we thought it could be appendicitis. Anyway, we had to pay around $750 in advance when we arrived at the hospital. We filed the claim through her medical insurance and because it had to go through their “Global department”, it took almost a year to get the claim paid. And all the documents were in French to make things more exciting!
The CSR coverage reimbursed me $10,000. We were supposed to go gorilla trekking in Africa for the first part of a trip. My son got Covid 2 weeks before. He would have been fine to travel, and we did go on the second part of the trip, but he had to get a yellow fever vaccine at least 10 days before the gorilla trekking and Covid made that impossible. They made me submit about 1,000 pages of documentation and it took almost a year of back-and-forth, but they ultimately paid it. It did bring to my attention the $20,000 per trip limit, however, which on a pricey trip like an African safari for 5 people is easily surpassed, so I ended up buying a separate policy to cover the rest of the trip after this incident.