Travel Insurance: What You Actually Need

Travel insurance is a field full of guilty conscience: skip it entirely, and you feel careless; buy everything, and you’re paying for cover that’s often worthless when it actually matters. Yet the question sorts cleanly into three categories – and once it does, the decision is usually made in five minutes.

Key takeaways

• Only one policy is truly indispensable: overseas health insurance, because of the medical evacuation risk.
• Trip cancellation cover is worth it situationally – for expensive, far-ahead-booked trips that are hard to cancel.
• Baggage insurance is mostly wasted money, given its exclusions and value limits.
• Before taking out anything new, check what your credit card, an existing annual policy or your employer already covers.
• From around two trips a year, an annual policy is cheaper and more convenient than single-trip policies.

Essential: overseas health insurance

There’s exactly one insurance that’s truly indispensable: overseas health insurance. The reason is simple and underrated: statutory health insurance covers practically nothing outside the EU, and even within Europe cover often ends right where things get expensive. The biggest risk here isn’t the treatment itself but medical evacuation – which can quickly run into six figures in a worst case. The consolation: an annual policy costs most travellers just a few euros a year, an almost laughably small price for the biggest risk item on the whole list. When taking one out, two things are worth checking: a sufficiently high coverage sum (several million euros is long since standard for annual policies) and explicit inclusion of medical evacuation as its own line item, not just a vague phrase buried in the small print.

Situational: trip cancellation

Trip cancellation insurance isn’t mandatory, but it makes sense for expensive, far-ahead-booked trips – say, a long-haul trip booked six months out, or a family celebration where a cancellation would be especially costly. Book flexibly or travel at short notice, and you reduce this risk on your own anyway (more in our shoulder season article). What matters when taking one out: read the excess clauses and the list of recognised cancellation reasons carefully – that’s where the difference between real cover and paper cover hides. The distinction between cancellation (the trip never even starts) and curtailment (the trip ends early) is also worth a close look, since not every policy automatically covers both. Rule of thumb: the more expensive and inflexible the booking, the more worthwhile checking the policy becomes – for cheap, cancellable bookings, the question usually resolves itself.

Mostly optional: baggage – and check for overlaps

Baggage insurance is the classic among superfluous policies: exclusions for unattended luggage, value limits and proof requirements often make it worthless when a claim actually happens – travel light already, and you need it even less (see our carry-on-only article for pointers). Before taking out anything new, it’s also worth checking your own credit card: many premium cards already include travel insurance – duplication just costs money without adding benefit.

The three categories at a glance

A compact comparison of the key policies:

Insurance	Category	Typical annual cost	What to watch for
Overseas health insurance	Essential	a few euros	medical evacuation explicitly included
Trip cancellation/curtailment	Situational	depends on trip price	excess, recognised reasons
Baggage insurance	Mostly optional	low, but rarely worth it	exclusions, value limits
Travel liability	Usually already covered privately	–	check existing personal liability cover

The table makes clear why this sorting matters: the cheapest policy on the list (overseas health insurance) carries the biggest risk, while pricier add-on packages often insure against the smallest risk.

Checking your cover in ten minutes

1. Check your credit card. Which travel insurance is already included, and under what condition (usually: booking with that card)?
2. Review existing annual policies. Do you already have overseas health cover, say through a membership organisation or employer?
3. Assess your travel profile. How often do you travel a year – under or over two trips?
4. Evaluate trip cost and flexibility. How expensive and how cancellable is the specific trip you’re planning?
5. Close gaps deliberately. Only take out something new where a genuine gap remains – don’t add everything as a blanket measure.

The most common mistakes when taking out insurance

Mistake 1: Travelling without overseas health cover “because it rarely happens”. The probability is low, but the potential cost is existentially threatening – a classic residual risk that can be insured against for a few euros. Mistake 2: Not explicitly checking for medical evacuation. Some cut-price policies cover treatment but not the expensive evacuation home. Mistake 3: Adding baggage insurance out of habit. Without reading the exclusion clauses, it feels safer than it usually turns out to be when a claim actually happens. Mistake 4: Being doubly insured. Pay for credit card cover and a separate policy at the same time, and you double the cost without doubling the benefit. Mistake 5: Taking out cancellation cover for flexible, cheap bookings. Here, the premium often exceeds the possible loss over the years, a loss already limited by the fact the booking is cancellable anyway.

From experience: the annual-policy maths

Whether an annual policy is worth it can be settled with a simple rough calculation: a single overseas health policy for a two-week trip often costs only a little less than an annual policy that covers the entire rest of the year – including spontaneous short trips that often don’t even cross your mind when booking. So take more than one trip a year, even if it’s just a long weekend in a neighbouring country, and the annual policy is almost always cheaper, while also leaving you never uncovered. The practical side effect: the annual policy only needs setting up once and then runs quietly in the background, without needing to be reconsidered before every single booking – one reason it also wins out in practice among people who really only travel once or twice a year.

What gets overlooked when taking out cover

Beyond the three big categories, two smaller but consequential details are worth checking. First, the pre-existing condition clause: some policies exclude treatment related to already-known pre-existing conditions or require separate disclosure – if you have a chronic condition, clarify this before taking out the policy, not only when a claim arises. Second, the excess on cancellation cover: a low premium often comes with a high excess that eats up a substantial part of the reimbursement in a real case – comparing the net terms is more worthwhile than just looking at the monthly premium.

Booking hygiene

The simplest lever sits before you take anything out: check once what your credit card, an existing annual policy or your employer already cover, before adding the next insurance. Know these three categories – essential, situational, mostly optional – and you make the decision in minutes instead of ticking everything out of guilty conscience while booking. That’s especially true when other booking decisions are already on the table anyway, for instance when booking flights, where the insurance check fits neatly into the same step.

The bottom line

Of the three insurance categories, only one is truly indispensable – overseas health insurance, because of the medical evacuation risk that can blow any budget. Everything else is a question of trip price, flexibility, and what’s already covered via credit card or annual policy anyway. Internalise this three-way split once, and you never need to rethink it from scratch again – just apply it briefly with every booking. (This is not insurance or legal advice.)