Do You Need Travel Insurance for a Domestic Flight?

You’re booking a flight, you’ve selected your seat, and you’re almost ready to check out. Then another question pops up: Do you want to protect your trip?

For a domestic flight, you may wonder whether paying extra for travel insurance is worth it. The answer depends on what you’re trying to protect, and what coverage you may already have.

Travel Insurance vs. Travel Protection: There's a Difference

When booking a flight, you may see an option to “protect your trip” before checking out. Before adding it, take a moment to see exactly what you're purchasing.

A protection product offered during booking may be designed primarily around that particular purchase, while a travel insurance policy may provide broader coverage for things such as trip cancellation or interruption, qualifying travel delays and baggage issues. Don't rely on the name alone. Read the terms to see what is covered, what isn't, whether reimbursement comes as cash or a travel credit, and what circumstances qualify for coverage.

Before clicking “yes,” here are a few things to consider.

First, Know What the Airline Already Covers

Travel insurance and your rights as an airline passenger are two different things. If an airline cancels your flight or makes a significant change and you decide not to travel, you may already be entitled to a refund under U.S. Department of Transportation rules.

For certain delays or cancellations within an airline’s control, the airline may also provide meals, hotel accommodations, ground transportation or other assistance, depending on the airline and circumstances.

Travel insurance doesn’t replace these airline obligations.

So, What Can Travel Insurance Cover?

Travel insurance can help with expenses and situations that aren’t necessarily the airline’s responsibility. Depending on the policy, coverage may include:

• Trip cancellation - You can’t take your trip because of a covered event, such as an illness or another qualifying circumstance.

• Trip interruption - Something happens after your trip begins and you need to return home early or change your plans.

• Travel delays - A qualifying delay results in additional expenses, such as meals or a hotel.

• Baggage delays or loss - Your luggage is delayed or lost.

• Missed connections - A covered delay causes you to miss the next part of your trip.

Every policy is different. The important question isn’t simply: “Do I have travel insurance?” It’s: “What does my policy actually cover?”

Here’s a few Scenarios

Imagine you purchase a $350 round-trip domestic ticket.

The Airline Cancels Your Flight

If the airline cancels your flight and you decide not to accept the alternative transportation offered, you may be entitled to a refund directly from the airline.

In that situation, travel insurance isn’t necessarily your first stop; the airline may already owe you a refund.

You Get Sick Before Your Trip

Your flight is operating normally, but you become ill and can’t travel. Because the airline didn’t cancel the flight, your options may depend on your ticket type and the airline’s policies. If illness is a covered reason under your travel insurance policy, the insurance may help reimburse eligible nonrefundable costs.

Your Flight Is Delayed Overnight

Whether the airline provides a hotel, meals, or other assistance can depend on the reason for the delay and the airline’s policies and commitments. If you have additional expenses the airline doesn’t cover, travel insurance may help if the delay qualifies under your policy.

Start with the airline. Find out what it will refund, reimburse or provide before assuming you need to file a travel insurance claim.

Important: Coverage Varies by Policy

Never assume a situation is covered simply because it sounds like the kind of event travel insurance normally covers. The policy’s terms, exclusions and documentation requirements determine whether a claim is eligible.

Check Your Credit Card Before Buying More Coverage

Here’s something travelers often overlook: You may already have travel protection.

Some credit cards include benefits such as:

• Trip cancellation or interruption coverage

• Baggage protection

• Reimbursement for certain travel delays

These benefits often have specific requirements, including how you paid for the trip.

Before purchasing additional insurance at checkout, check your credit card’s current benefits, coverage limits and requirements.

Think About How Much Money Is Actually at Risk

Consider two different trips:

• Trip A - You purchased a $129 flight to visit a friend and you’re staying at their house.

• Trip B - You purchased $1,200 in nonrefundable airfare, prepaid a hotel, rented a car and bought tickets to an event.

The financial consequences of canceling Trip B could be significantly greater. Ask yourself: If I couldn’t take this trip tomorrow, how much money would I actually lose?Then compare that potential loss with the cost, limits and coverage provided by the insurance.

For Frequent Travelers: An Annual Policy May Be Worth Exploring

If you take several trips throughout the year, it may be worth comparing an annual travel insurance policy, sometimes called a multi-trip policy, with purchasing insurance separately for each trip. Instead of purchasing a new policy each time you travel, an annual policy can provide certain protections across multiple trips during the policy year.

Depending on the plan, benefits may include coverage for qualifying travel delays, trip interruptions, baggage issues and other covered events.

However, don’t assume an annual policy provides the same coverage as a single-trip policy. Coverage limits, trip-cancellation benefits, maximum trip lengths and other restrictions can vary significantly.

If you’re considering an annual policy, compare

• How frequently you travel

• The types of coverage included

• Coverage limits per trip and per year

• Whether trip cancellation is included and its limits

• Maximum trip-length restrictions

• Coverage you already receive through your credit card

• The annual premium compared with what you typically spend on individual policies

Tip: If you regularly purchase travel insurance for individual trips, add up what you're spending over the course of a year. Then compare the total cost and benefits with an annual policy to see which option makes more sense for you.

Before You Click “Protect My Trip”

Take a minute to look beyond the price of the insurance. Check:

• What reasons for cancellation are covered

• How long a delay must last before benefits begin

• Maximum reimbursement amounts

• Baggage coverage and limits

• Major exclusions

• What documentation you’ll need to file a claim

• Whether your credit card already provides similar coverage

Simply changing your mind about traveling generally isn’t the same as canceling for a covered reason.

Where Can You Buy Travel Insurance?

Travel insurance isn’t limited to the offer you see while booking an airline ticket. Travelers can also purchase coverage directly from travel insurance companies or compare policies from multiple providers.

Examples of established providers serving U.S. travelers include Allianz Travel Insurance, AIG Travel Guard, Berkshire Hathaway Travel Protection, and Generali Global Assistance.

Affordable Skies does not endorse a particular travel insurance provider.

The Bottom Line

Travel insurance can be useful, but it isn’t automatically necessary for every domestic airline ticket. Before purchasing it, ask yourself three questions:

1. What protections does my airline already provide?

2. Does my credit card already include travel protection?

3. If something prevents me from taking this trip, how much money could I actually lose?

A few minutes of research can help you make a more informed decision and avoid paying for coverage you may already have.