Budget travelers often skip travel insurance to save money. Sometimes that’s a smart decision — and sometimes it’s the most expensive mistake of the entire trip.
This guide looks at the real numbers behind travel insurance so you can decide when it actually makes financial sense.
The Short Answer
Travel insurance is usually worth it for international trips costing more than $1,000 or involving non-refundable bookings. For inexpensive or fully flexible trips, it may not be necessary.
What Travel Insurance Actually Costs
Most travel insurance policies cost between 4% and 8% of total trip cost.
- $1,000 trip → about $40–$80
- $2,500 trip → about $100–$200
- $5,000 trip → about $200–$400
The key question isn’t the price — it’s the potential loss you’re protecting against.
When Travel Insurance Is Worth It
- International travel
- Multiple flights or connections
- Prepaid hotels or tours
- Travel during winter or hurricane seasons
- Trips booked far in advance
When Travel Insurance Is Probably Not Worth It
- Domestic trips
- Fully refundable bookings
- Short weekend travel
- Trips you could afford to lose financially
A Simple Cost Example
Imagine a $1,500 international trip:
- Insurance cost: ~$70
- Potential cancellation loss: $800+
In this scenario, insurance acts less like an expense and more like financial risk management.
Low-Cost Travel Insurance Options
Budget travelers often compare providers based on price and flexibility. Popular options include SafetyWing and World Nomads, both of which offer policies designed for international travelers.
For a detailed comparison, see our guide to the cheapest travel insurance for international trips.
Final Verdict
Travel insurance isn’t always necessary — but for many international trips, a relatively small upfront cost can prevent a much larger financial loss. The best approach is to evaluate insurance based on total trip risk rather than assuming it’s either essential or a waste of money.