Should You Buy Cheap Travel Insurance?

Buying cheap travel insurance for an upcoming trip is a bit like renting a budget rental car.

Sure, both will get you to your destination and back, but you might miss out on those extras that make your journey truly enjoyable. And in the event you encounter any bumps in the road, you could find yourself wishing you’d invested in something more comprehensive that offers better protection — and peace of mind. 

However, like budget-friendly rental cars, affordable travel insurance can be a smart choice for some situations and traveler types. Here’s a quick guide to the benefits and risks of buying cheap travel insurance so you can strike a balance between reasonable cost and robust coverage for your next adventure. 

What Does Cheap Travel Insurance Cover?

At first glance, cheap travel insurance might look like an easy way to save some cash for your trip, but keep in mind that cheaper isn’t always better, especially when it comes to safeguarding your health (and your finances). Typically, cheap travel insurance only includes basic protections, such as: 

• Trip Cancellation Coverage. Cheap trip cancellation insurance policies often apply to a very limited number of covered reasons, such as extreme weather or traveler illness, but will not apply to broader common situations, such as a sick family member.
• Baggage Insurance Coverage. Budget travel insurance plans usually include basic baggage coverage to reimburse the costs of delayed, lost, stolen, or damaged belongings.
• Emergency Medical Coverage. Cheap travel insurance offers minimal provisions for medical emergencies, including covering partial costs of hospital stays, doctor visits, and, in very limited situations, emergency transportation to the nearest medical facility. 

With this said, are there risks in choosing cheap travel insurance? Depending on your upcoming travel itinerary, yes. There are several exclusions and inefficiencies found in cheaper policies, namely gaps and caps for available coverage, that can leave you financially vulnerable in the event of an emergency:

• Limitations in Coverage. Beyond limited coverage for cheap trip cancellation insurance, low-cost policies often do not include coverage for adventure activities and pre-existing medical conditions, which can leave you exposed to high-risk scenarios. 
• Minimal Coverage Caps. Cheap travel insurance often limits the benefits or sets a low cap on reimbursements, meaning you may only receive a fraction of your total medical bills, transportation costs, or baggage replacement expenses after an incident.
• Potential for Coverage Gaps. Emergency coverage in budget travel insurance often excludes coverage for more extensive medical emergencies, which can leave you paying out of pocket for expensive treatments, especially the costs of transportation. 
• Additional Costs:  Cheap travel insurance plans may even include deductibles.  That means you’ll need to pay a fee when you file certain types of claims.

The Pros and Cons of Cheap Travel Insurance

Cheap travel insurance has its upsides and downsides. The biggest benefit, of course, is the low cost, which can be a lifesaver for solo adventurers, seniors on fixed incomes, and families juggling tight budgets, allowing them to travel without breaking the bank. There are also scenarios where cheap travel insurance is simply preferable, like short domestic trips across state lines or low-risk trips to visit friends.

For some travelers, the bare minimum is all that’s necessary for peace of mind while away from home. However, limited coverage can be a significant downside for others, leaving them vulnerable to unexpected expenses or emergencies that may arise during their trip. This can be particularly concerning for those with health issues or those traveling to more remote destinations where risks might be higher.

So, what are the limitations of cheap travel insurance? Cheap plans offer low-cost travel medical insurance, which may not fully cover emergency medical bills. Budget travel insurance plans have stricter reimbursement caps, so you will likely pay out of pocket for lost or stolen belongings. Reasons for cancellations are also stricter, so you could lose prepaid, non-refundable expenses if you need to cancel. 

Who Benefits Most From Cheap Travel Insurance?

Several traveler types can benefit from cheap travel insurance, including seniors on fixed incomes who want to enjoy their trips without worrying about steep insurance costs, families balancing the expenses of a vacation with some level of protection, and solo adventurers seeking affordable ways to explore new destinations. Consider the benefits — and potential risks — of cheap insurance for each of these groups.

Baby Boomers & Gen X 

Baby Boomers and Gen X travelers often seek travel insurance with comprehensive coverage for medical emergencies and support during unforeseen events, particularly for long-awaited trips. Cheap travel insurance may be suitable for brief domestic vacations but not for international trips. Medicare does not cover international travel, so you will be left responsible for any medical emergencies. 

Family Travelers

In the quest to make family travel insurance affordable, you may be eyeing cheaper policies. If you plan to take a quick flight to visit relatives, a cheap travel insurance policy may suffice. However, these policies may not be as flexible or full-coverage as you might need. For example, if you have to cancel your vacation due to a child’s illness or a school event, cheap policies may not classify that as a covered reason.

Young Adventurers

Young adventurers often try to limit extra expenses, like travel insurance, to allocate more of their budget to activities and excursions. While affordable travel insurance might seem attractive, it’s important to realize that many budget-friendly policies exclude extreme sports — like snorkeling, scuba diving, and even hiking in certain areas — as well as remote destinations, so you may face coverage gaps. 

Is Cheap Travel Insurance Worth It?

Now that you understand the pros and cons (and the traveler groups that budget travel insurance plans could benefit), you might be wondering if cheap insurance is worth it after all. Before you narrow down your policy options, here’s a helpful checklist to determine whether a budget plan is right for you:

• Low-cost travel medical insurance is not a deal-breaker for you or your travel group
• Prepaid activities and excursions on your itinerary are not excluded from the policy 
• Trip duration and destination are short and close by, so risk factors are limited
• If traveling internationally, the policy coverage meets visa requirements
• You’ve read the fine print and exclusions of the policy carefully 

When to Avoid Cheap Travel Insurance?

Cheap travel insurance may be worth it for those whose travel plans are straightforward, such as short domestic trips with minimal risk factors. It’s also recommended for those who want trip protection on a tight budget. However, cheap travel insurance is not a wise idea for several scenarios, including: 

• Long international trips
• Adventure travel and extreme sports
• Trips with prepaid, non-refundable expenses
• Expensive luggage or costly gear, like filming equipment
• Travelers with health concerns or pre-existing conditions

Aegis Offers Multiple Levels of Travel Insurance Coverage

When it comes to the battle between comprehensive vs. cheap travel insurance, it’s true that investing in better protection can make all the difference if (or when) the unexpected happens. Fortunately, you don’t have to spend a fortune to safeguard your travel plans. Aegis offers comprehensive travel insurance policies with varying coverage levels and price points to meet every traveler’s unique needs.

Compare Aegis travel insurance plans today to protect your next adventure!