Top 7 Mistakes People Make When Buying Travel Insurance
Travel insurance is a crucial safety net for U.S. travelers, protecting against unexpected events like trip cancellations, medical emergencies, or lost luggage. With Americans spending $4.27 billion on travel insurance in 2022, according to the U.S. Travel Insurance Association (UStiA), it’s clear that many recognize its value. However, purchasing the right policy can be tricky, and mistakes can leave you underinsured or out of pocket. Here are the top seven mistakes U.S. travelers make when buying travel insurance and how to avoid them, backed by recent research and tailored for the American market.
1. Waiting Too Long to Purchase Insurance
One of the biggest mistakes is delaying the purchase of travel insurance until just before departure. Many policies offer time-sensitive benefits, such as coverage for pre-existing medical conditions or named storms, but only if purchased within 10–21 days of your initial trip payment. A 2024 Nationwide Travel Insurance survey found that 64% of U.S. travelers rarely or never buy insurance, often because they wait too long and miss out on key benefits. For example, if you’re traveling to Florida during hurricane season, buying early ensures coverage for weather-related cancellations. Solution: Purchase insurance as soon as you book your trip to maximize coverage options.
2. Assuming All Policies Are the Same
Not all travel insurance policies are created equal, yet many U.S. travelers pick the cheapest option without comparing coverage. Policies vary widely in terms of medical limits, evacuation benefits, and trip cancellation coverage. For instance, basic plans might cover only $10,000 in medical expenses, while comprehensive plans offer $100,000 or more. NerdWallet’s 2025 analysis of travel insurance providers noted that 40% of consumers choose inadequate plans due to cost alone. Solution: Use comparison sites like TravelInsurance.com to evaluate coverage, limits, and exclusions to find a policy that matches your needs.
3. Overlooking Pre-Existing Medical Conditions
Failing to disclose or account for pre-existing medical conditions is a common error. Most policies exclude coverage for pre-existing conditions unless you purchase a waiver, which typically requires buying the policy early and being medically fit to travel. According to Allianz Travel Insurance, medical emergencies are among the top reasons for claims, with costs abroad often exceeding $50,000. Without a waiver, a heart condition flare-up during a European trip could leave you with massive bills. Solution: Disclose all medical conditions and opt for a policy with a pre-existing condition waiver if needed.
4. Misunderstanding Coverage Limits and Exclusions
Many travelers don’t read the fine print, leading to surprises when claims are denied. For example, standard policies may not cover high-risk activities like scuba diving or exclude pandemics and civil unrest. A 2023 Squaremouth study found that 25% of denied claims were due to travelers misunderstanding policy exclusions. If you’re planning a ski trip to Colorado, ensure your policy covers winter sports. Solution: Review the policy’s terms, especially exclusions and limits, and ask providers for clarification if needed.
5. Relying Solely on Credit Card or Existing Insurance
Some U.S. travelers assume their credit card or health insurance provides sufficient travel coverage, but these often fall short. Most U.S. health plans, including Medicare, don’t cover international medical care, and credit card insurance typically has low limits (e.g., $1,500 for baggage loss) and excludes medical evacuation. The UStiA reports that 15% of travelers mistakenly rely on credit card coverage, risking significant out-of-pocket costs. Solution: Verify what your credit card or health insurance covers and purchase a comprehensive travel insurance policy for gaps like medical or evacuation coverage.
6. Skipping Cancel for Any Reason (CFAR) Coverage When Needed
Cancel for Any Reason (CFAR) coverage offers flexibility to cancel for reasons not listed in standard policies, like personal concerns or schedule changes, but it’s often overlooked due to cost. CFAR can reimburse up to 75% of nonrefundable expenses but must be purchased early and costs 40–50% more than standard policies. For high-cost trips, like a $10,000 Alaskan cruise, CFAR can save thousands if plans change. Yet, a 2024 InsureMyTrip report found only 20% of insured travelers opt for CFAR. Solution: Consider CFAR for expensive or complex trips, but buy early to meet eligibility requirements.
7. Underestimating the Cost of Medical Evacuations
Medical evacuations can cost $15,000 to over $200,000, especially from remote destinations, yet many travelers choose policies with low or no evacuation coverage. For example, if you’re injured hiking in a national park, a helicopter evacuation could bankrupt you without proper coverage. Allianz notes that evacuation claims are among the most expensive, yet 30% of budget policies skimp on this benefit. Solution: Choose a policy with at least $100,000 in emergency evacuation coverage, especially for international or adventure travel.
Why Avoiding These Mistakes Matters
The financial stakes of travel are high, with the average domestic vacation costing $2,200 per person and international trips often exceeding $5,000. Without proper insurance, U.S. travelers risk losing their investment or facing massive medical bills abroad. The Nationwide survey revealed that 50% of Americans plan international trips in 2024, yet many remain underinsured due to these common mistakes. By purchasing early, comparing policies, and understanding coverage, you can protect your wallet and peace of mind.
Tips for Smart Travel Insurance Purchases
- Shop Early: Buy within 14–21 days of booking for maximum benefits.
- Compare Providers: Check reviews and ratings from sources like U.S. News or NerdWallet.
- Tailor Coverage: Ensure the policy covers your destination, activities, and health needs.
- Read the Fine Print: Understand exclusions, limits, and claim processes.
- Consider CFAR: Weigh the cost against the flexibility for high-value trips.
Conclusion
Travel insurance is a vital tool for U.S. travelers, but common mistakes can undermine its benefits. From waiting too long to buy to misunderstanding coverage, these errors can lead to denied claims or inadequate protection. By learning from these pitfalls and choosing a policy that fits your needs, you can travel confidently, knowing you’re covered for the unexpected. Whether you’re planning a beach getaway or an international adventure, invest time in selecting the right travel insurance—it’s as essential as your passport.
Sources: U.S. Travel Insurance Association (2022), Nationwide Travel Insurance Survey (2024), NerdWallet (2025), Allianz Travel Insurance, Squaremouth (2023), InsureMyTrip (2024)
