Travel Insurance Worth It? My Experience Says No – Here’s Why

Traveling can be a blast, but what happens when things don't go according to plan? Vacation protection insurance, also called travel insurance, may be able to help you offset additional costs or reimburse you for your vacation should the unthinkable happen. What if a hurricane heads for Orlando during your Disney World Vacation or your first ever cruise is delayed due to a storm? We explain how it works, if it is worth it and other travel insurance tips.Recently my wife and I have had a bit of a financial scare.

We have been planning another awesome cruise for a while, but we almost had to cancel it and lose our $500 deposit.

Luckily, we ended up not having to cancel the cruise, but it made us rethink a common decision we always make.

We Never Buy Vacation Insurance

Every time we put a deposit on a cruise, our cruise company representative asks if we’d like to spend anywhere from $49 to $99 per person to buy vacation protection insurance.

The insurance allows us to cancel the cruise at any time for any reason and get most, if not all, of our vacation money back, less the cost of the insurance.

In the past, we’ve always said no to this insurance. To give you a rough idea, the cost of our cruise fare that wouldn’t be refunded in the event of a last minute cancellation ranges from $500 to $1,200 for our previous cruises.

Related: How Much A Cheap Cruise Really Costs

Depending on how late you cancel the cruise without insurance, you could get your money fully refunded if you cancel early enough, lose your deposit, lose a percentage of your cruise fare or lose your entire cruise fare.

We have always figured there are very few, if any, reasons we would cancel an awesome cruise vacation, so we always said no to the vacation protection insurance.

After all, the worst case we could think of would be a hurricane and we’d be happy to meet the cruise ship elsewhere, go to a different set of destinations or accept a full refund if the cruise line cancelled the cruise, which almost never happens.

Related: 10 Hidden Costs of Cruising

Rethinking Buying Vacation Protection Insurance

After almost losing $500 of our hard earned money, we sat down and considered whether or not we should buy vacation protection insurance for future cruises. However, it still doesn’t make much financial sense for us, personally.

So far, including our pending cruise, we’ve been on 5 cruises. For each of those cruises, we would have paid basically $100 or more for vacation protection insurance and so far we’ve never had to use it.

If we bought the insurance on each of our previous cruises we would have been out $500 so far. Granted, if we cancelled our upcoming cruise, we would have had our $500 deposit refunded to us and we would have broken even on our vacation insurance gambles.

We didn’t and don’t foresee us cancelling our cruise now, so in reality we would have been out $500 or half of the cost of our typical cruise fare.

Related: Trip Cost Report – Our 7 Day Honeymoon Carnival Cruise

Will We Ever Buy Vacation Protection Insurance?

If we book a special cruise or a cruise that involves us flying to a port, I definitely think we’ll strongly consider buying insurance.

For instance, if we booked an Alaskan, Hawaiian or an overseas cruise such as a Mediterranean cruise or an Australian cruise, I think we’d probably pay for the protection due to the higher cost and higher risk nature of us losing our money.

We won’t be buying vacation protection insurance on our lower cost cruise vacations that only require us to drive to the port the night before. The risk so far just hasn’t outweighed the cost of the insurance, so instead we choose to take on the risk ourselves.

Have you ever booked a vacation and paid for vacation protection insurance? Do you think vacation protection insurance is a scam, or do you think it is a valuable option? Let me know you thoughts in the comments below!

Photo by: Herkie Text added by: Lance Cothern

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Thanks for this great post Lance. My friend accidentally lost his luggage while he was travelling to Europe and gladl that he got a travel insurance that reimbursed the amount that he declared on his lost luggage.

  2. Your credit card may have a trip cancellation policy at zero cost. For example, Citi has a Trip Cancellation & Interruption Protection plan, underwritten by IDS Property Casualty Insurance Co., that will pay the entire cost of your trip if you have to cancel it as a result of a covered reason (like illness). Many cards offer a similar type of service.

    • I definitely should have mentioned this. Thanks for bringing it up for me. Unfortunately, our reason for cancelling wouldn’t have been covered under the credit card’s insurance but the vacation protection travel insurance through the cruise company should have covered it. To use the credit card insurance, I believe you have to put the entire cost of the trip on the one card if I remember correctly. We split the cost over a couple cards to use our credit card sign up bonuses to pay for the cruise so they definitely wouldn’t have covered us this time.

  3. We are planning a trip to Disney World in a couple of months. That’s quite expensive and we’ve considered the idea of trip insurance. It might be worth looking into whether our credit card offers this protection as we will have to make the balance payment within the next couple of weeks. Timely info, thanks!

  4. We bought trip insurance once, for a $6,000 trip to Italy. My wife’s grandfather was in the hospital, and we got on the plane prepared to fly to Italy, only to turn around and fly home. With all the things we were worried about, the cost of a wasted vacation wasn’t one of them. Thankfully, we got to enjoy our full 10 day trip and made it home in time to say goodbye.

  5. In our younger days, we did not buy insurance but now that we are retired, we almost always buy it, especially for overseas trips. Not for the trip cancellation aspect, but for the medical and medical evacuation coverage. You just never know what might happen and it might be necessary to get home quickly in the event of accident or illness. The chance such an occurrence increases as you get older!

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