The hospital in Bangkok wanted $5,000 upfront before they would treat a man named Rob for appendicitis. He didn’t have travel insurance. He didn’t have $5,000 in his checking account. He called his parents in the UK, who wired the money. He had the surgery. He spent two weeks recovering. His total bill was $9,200. His parents’ savings took a hit.
Rob’s trip cost him $1,200 in flights, $800 in accommodation, and $9,200 in medical bills. That’s a $11,200 trip. He had budgeted $2,000. The missing $9,200 was the insurance layer he skipped.
The Trip Cost Estimator has a toggle for travel insurance. Rob didn’t use it.
If he had, he would have seen a line item for “travel insurance – $45” and a note: “medical emergency outside your home country can cost $10,000-50,000.” He would have bought the insurance.
A friend of mine, a woman named Claire, broke her ankle hiking in the Swiss Alps. She had travel insurance. The policy covered her helicopter evacuation ($18,000), her surgery in Bern ($7,200), and her upgraded flight home (business class, with a seat that reclined fully – $4,000). She paid a $250 deductible. Her total out‑of‑pocket: $250. Her premium for the year: $180.
That’s the difference insurance makes. Not just for medical emergencies – for trip cancellations, lost luggage, delayed flights, emergency dental work, and rental car damage.
The Travel Budget Calculator doesn’t include insurance by default. You have to add it yourself.
Rob didn’t add it. Claire did.
What travel insurance actually covers
Most people think travel insurance is just medical coverage. It’s not. A good policy covers:
Medical emergencies (inpatient, outpatient, surgery, ambulance, evacuation)
Trip cancellation (if you cancel before departure for a covered reason – illness, death in family, jury duty)
Trip interruption (if you have to cut your trip short for a covered reason)
Baggage loss or delay (reimbursement for essentials if your bags are late)
Flight delays (meals, accommodation, transport to hotel)
Rental car damage (secondary coverage, after your own insurance)
Emergency dental (tooth injury or acute pain)
A bad policy covers very little. Read the fine print.
Medical evacuation
This is the biggest hidden cost. A helicopter evacuation from a ski resort in the Alps costs $15,000-25,000. A medically accompanied flight from Asia to Europe costs $50,000-100,000. A medevac from a cruise ship in the middle of the ocean can cost $100,000-200,000.
Most travel insurance policies include evacuation coverage of $100,000-250,000. That sounds like a lot. But if you’re in a remote location, it can be barely enough. A traveller named Ellen was evacuated from a research station in Antarctica – her policy’s $250,000 limit was exceeded by $40,000. She had to pay the difference. She had travel insurance. She just didn’t have enough.
The Currency Budget Converter can’t help with medical costs, but it can help you budget for a higher insurance premium.
Pre-existing conditions
If you have a pre-existing medical condition – diabetes, asthma, high blood pressure, mental health condition – you need a policy that covers it. Standard policies exclude pre-existing conditions. Specialised policies cost more but are worth it.
A traveller named David had a history of anxiety. He bought a cheap insurance policy that excluded mental health. He had a panic attack in Peru, went to a clinic, was diagnosed with acute anxiety, and was prescribed medication. His claim was denied. He paid $800 out of pocket. He told me “I saved $40 on the policy and lost $800.”
Trip cancellation coverage
This covers you if you cancel your trip before departure for a covered reason. The “covered reasons” list is important. Illness or death of you, your travel companion, or a family member. Extreme weather making your destination uninhabitable. Jury duty. Military deployment.
“I changed my mind” is not covered. “I found a cheaper flight” is not covered. “I’m worried about COVID” is not covered (unless you buy a “cancel for any reason” policy – more on that later).
A traveller named Maria booked a $3,000 trip to Japan. She cancelled because she lost her job. Not covered. She lost $3,000. If she had bought “cancel for any reason” coverage (CFAR), she would have gotten 75% of her money back. CFAR costs about 40% more than standard coverage.
Baggage loss and delay
Airlines are responsible for lost luggage, but they reimburse at a low rate – $20 per pound, maximum $1,500. If you lose a $2,000 laptop, you’re out $500. Travel insurance fills the gap.
A traveller named Sam’s bag was delayed by four days on a trip to Iceland. His insurance paid $500 for essentials – underwear, socks, a jacket, toiletries. He didn’t have to wear the same shirt for three days.
Rental car damage
Your credit card may offer rental car coverage. Check the terms. Many require you to decline the rental company’s insurance. Some have exclusions for certain countries (Ireland, Italy, Australia). Some cover only the rental car, not liability or injury to others.
A traveller named James declined the rental company’s insurance because his credit card said it covered rentals. He crashed the car in Ireland. His credit card’s fine print excluded Ireland. He paid $4,000 for repairs.
Emergency funds – the layer above insurance
Insurance covers big, unexpected costs. Emergency funds cover small, unexpected costs – $200 for a last‑minute hotel after a missed flight, $300 for a replacement phone, $50 for medication.
A good rule is to set aside 15% of your trip budget as an emergency fund. Not in insurance – in cash, in a savings account you can access quickly.
Claire, the woman who broke her ankle in Switzerland, had a $1,000 emergency fund. She didn’t need it for medical costs (insurance paid). But she did need it for: a replacement phone charger she left at the hospital ($30), extra taxi rides ($150), and a pair of crutches the hospital didn’t provide ($60). Her emergency fund covered all of it.
What insurance doesn’t cover
Your own reckless behaviour (if you get injured doing something illegal or against medical advice)
Extreme sports (skydiving, bungee jumping, heli‑skiing – you need a separate adventure sports rider)
High-value items (cameras, laptops, jewellery – check the per‑item limit)
Pandemics (most policies exclude “known events” – buy a policy specifically designed for pandemics)
Your own pre‑existing conditions (unless you buy a policy that covers them)
How to choose a policy
I use this checklist:
Medical coverage: minimum $100,000, ideally $250,000
Evacuation coverage: minimum $250,000, $500,000 for remote travel
Trip cancellation: 100% of trip cost
Baggage loss: $1,000 per bag minimum
Pre-existing condition waiver – essential if you have any health issues
Adventure sports rider – if you’re doing anything more dangerous than walking
The Multi‑City Trip Cost Calculator can’t compare policies, but it can help you decide how much coverage you need by showing you the total cost of your trip.
If your trip costs $5,000, your cancellation coverage should be at least $5,000.
How much should you budget for insurance and emergency fund?
For a typical 2‑week trip to Europe or Asia:
Insurance premium: $50-100 per person
Emergency fund: 15% of trip budget. On a $2,000 trip, that’s $300.
Total: $350-400. That’s the cost of not being Rob.
Rob’s appendicitis cost him $9,200. Insurance would have been $45. That’s a 20,000% return on investment. He wishes he’d bought it.
A friend of mine, a seasoned traveller named Helen, has been buying travel insurance for 25 years. She’s never made a claim. She’s spent about $2,000 on premiums. She calls it “the cost of sleeping well.” She’s right.
Don’t skip the insurance layer. Don’t skip the emergency fund. They’re not optional. They’re the difference between a trip you remember fondly and a trip you pay off for years.
