Travel insurance: do you actually need it? (honest answer) — Budge

This post covers what's actually in a policy, what matters most, and how to buy intelligently rather than just buying cheaply.

In 2019, a British tourist broke his leg in Thailand and required surgery and a two-week hospital stay before he was stable enough to fly home. The total medical bill was £42,000. He had travel insurance. His out-of-pocket cost was the excess on his policy, around £150.

The same situation without travel insurance would have required either his family to wire £42,000 to a Bangkok hospital or the Foreign Office to arrange repatriation against eventual repayment — a process that takes weeks and involves significant additional costs.

The direct answer to whether you need travel insurance: yes, always, for any trip that involves leaving your home country. Not because most trips go wrong — most don't — but because the ones that do go wrong can produce costs that make the insurance premium look trivial and the decision not to buy it look like the most expensive gamble you ever took.

Travel insurance fits into the trip planning sequence immediately after booking flights — the full planning guide covers where it sits in the sequence and why buying it early matters for trip cancellation cover. This post covers what's actually in a policy, what matters most, and how to buy intelligently rather than just buying cheaply.

The three things that actually matter in a travel insurance policy

Medical cover and emergency evacuation. Trip cancellation. Lost or delayed baggage. In that order of importance.

Most people weight these in reverse — they think first about lost luggage and last about medical evacuation. This is the wrong order. Here's why:

Medical cover and emergency evacuation is the reason travel insurance exists. Healthcare abroad is expensive; emergency medical evacuation is catastrophically expensive. A helicopter evacuation from a mountain in New Zealand, a medevac flight from Southeast Asia, an ICU stay in the US — any of these can produce bills in the $50,000–$300,000 range. Travel insurance that covers medical evacuation to at least $500,000 (and ideally $1,000,000 for trips to the US or remote regions) is the core product. Everything else is supplementary.

Check the policy's medical evacuation limit specifically. Some budget policies cap it at $100,000, which is insufficient for a serious emergency in certain destinations. The US is the most expensive healthcare environment; a week in an American hospital without insurance can produce a bill that exceeds $200,000.

Trip cancellation cover is the second most financially significant element. If you've booked non-refundable flights and accommodation worth £3,000 and have to cancel because you break your leg before departure, trip cancellation cover pays out. The key variable is the definition of a "covered reason" — most policies cover illness (your own or an immediate family member's), bereavement, jury duty, redundancy, and natural disasters. They don't cover changing your mind, "travel anxiety," most pre-existing conditions unless separately declared, or a pandemic-style event unless specifically included.

Read the covered reasons before buying. "Any reason" cancellation policies exist at a higher premium and are worth considering for expensive, non-refundable trips.

Lost or delayed baggage is real but less financially consequential than most people assume. The average lost luggage claim is £500–£800 — meaningful but not catastrophic. Most airlines also have their own compensation requirements for genuinely lost luggage. The more useful aspect of this cover is baggage delay: if your bag doesn't arrive for 24 hours, you're reimbursed for essential items purchased in the meantime. This is useful; it's not the reason to buy the policy.

What credit card travel insurance actually covers

Credit card travel insurance is a useful supplement and a dangerous primary cover.

Several premium credit cards (Amex Platinum, Chase Sapphire Reserve, certain Barclaycard and HSBC products) include travel insurance as a benefit. These policies are real and have genuine value. They're also written to be secondary cover — meaning they kick in after your other insurance has paid out — and they typically have significantly lower medical cover limits than a standalone travel policy.

The Amex Platinum's travel insurance, for instance, has medical cover limits that vary by card but are generally in the $10,000–$100,000 range for emergency medical treatment — inadequate for a serious emergency, even in Western Europe. The Chase Sapphire Reserve caps emergency medical at $2,500, which covers a good-faith effort and not much else.

Credit card travel insurance is worth using for: trip cancellation (limits are often reasonable), rental car coverage (often genuinely good — check whether your card covers rental excess before buying the rental company's excess waiver), and travel delay compensation. It is not sufficient as your only medical cover for international travel.

The correct use: check what your card covers before buying standalone insurance, and let the card cover supplement where it can while ensuring your standalone policy covers the medical evacuation limits that matter.

The pre-existing conditions trap

The most common travel insurance claim dispute involves pre-existing conditions — things that existed before the policy was purchased.

Most standard travel insurance policies exclude claims arising from pre-existing medical conditions unless they've been declared to the insurer at the time of purchase. "Pre-existing" is defined broadly — it includes conditions you've sought medical advice for, taken medication for, or had symptoms of in a defined look-back period (typically 1–2 years for budget policies, sometimes longer).

If you have any ongoing medical condition — asthma, diabetes, a recent surgery, depression, high blood pressure — declare it. The premium increase for declaration is almost always smaller than people expect, and undeclared conditions that become relevant to a claim will void the claim.

The specific scenario to watch for: you have a history of back problems (declared), go to Iceland, and herniate a disc on a hike. If you declared the back problems, the claim proceeds. If you didn't, the insurer argues the claim arises from an undisclosed pre-existing condition and disputes it. The difference between a covered and uncovered outcome here is entirely whether you spent five minutes declaring at purchase.

Adventure activities cover

Standard travel insurance does not cover most adventure activities. Check the exclusion list before you book anything active.

The exclusion list on a standard travel policy typically includes: skiing and snowboarding (requires separate winter sports cover), scuba diving below a certain depth (usually 30–40 metres), motorbiking (often requires a specific endorsement or is excluded entirely), bungee jumping, white-water rafting above certain grades, and mountaineering above a specific altitude.

This matters specifically for: renting a scooter in Bali (check whether your policy covers motorbike accidents — many don't without an additional premium), skiing in the Alps (requires winter sports add-on), diving in the Red Sea, and trekking to altitude in Nepal or Peru.

The insurance isn't prohibitive for these activities — winter sports cover adds £20–£40 to a standard policy; motorbiking endorsements are similar. The problem is when people don't check and discover the exclusion at the claims stage.

Which providers are actually reliable

The premium you pay matters less than the claims process of the provider you pay it to.

Travel insurance is priced competitively enough that premium differences between providers at the same cover level are modest. The meaningful differentiator is claims handling — whether the provider actually pays out when you need it to, quickly and without excessive bureaucracy.

The providers with consistently strong claims reputations in the UK: Battleface (specialist travel, good for complex trips), True Traveller (backpacker and long-stay specialist, strong claims record), and World Nomads (long-established, widely used, generally reliable for adventure travel). In the US: Allianz Global Assistance, Travel Guard (AIG), and Seven Corners have strong reputations. InsureMyTrip aggregates US policies with independent ratings.

Providers to approach carefully: the cheapest policies on price-comparison aggregators are often from companies with limited claims records or restrictive definitions. Read the "What's not covered" section before buying — the length of the exclusions list is often more informative than the headline premium.

The travel planning checklist includes the insurance purchase at the 6-weeks-out stage — the reason timing matters is that trip cancellation cover only applies to non-refundable costs incurred after the policy is purchased. Buying insurance two days before departure gives you no trip cancellation protection for the flights you booked three months ago.

How much should you pay?

A comprehensive single-trip policy for two weeks in Europe costs £25–£50 per person. Long-haul adds £15–£30. The difference between adequate and comprehensive cover is usually £15–£20.

The premium variables: destination (US and Caribbean are most expensive due to healthcare costs), duration, age (over-65 premiums increase significantly), declared medical conditions, and activity level. A two-week Europe policy with reasonable medical limits for a healthy adult under 45 should cost £25–€45. The same policy for a US destination: £40–£70. Annual multi-trip policies (covering all trips in a calendar year up to a set duration per trip) typically cost £50–£100 for Europe, £80–£150 worldwide, and represent good value for anyone taking three or more trips a year.

This is exactly the kind of research rabbit hole that Budge was built for — you can ask it follow-up questions about any of this and it remembers what you care about across the whole conversation.

The honest truth about travel insurance

The people who skip travel insurance are not taking a calculated risk. They're gambling that nothing will go wrong — which is a reasonable bet in most cases and a catastrophic error in a small number of cases.

The people who've had a medical emergency abroad without insurance, or who've had to cancel a £4,000 trip without cancellation cover, don't skip it again. The ones you don't hear from had unremarkable trips where nothing went wrong and felt vindicated. Selection bias runs strongly in favour of "I've never needed it" — until you do.

The premium is small relative to the cost of the trip. The cover is only available before something goes wrong, not after. The argument for skipping it is the saving of a number that represents 2–4% of your total trip cost. The argument against skipping it is the £42,000 hospital bill that a tourist in Bangkok did not have to pay because he had travel insurance.

Buy it. Buy it when you book your flights, not the week before departure. Check the medical evacuation limits, declare pre-existing conditions, check the adventure activities exclusions if any apply. Then get on with planning the trip.