Travel Insurance 2026: Should You Buy It Amidst Chaos & Rising Costs?

The spring travel season is officially upon us, and here in Chicago, that means a flurry of activity at O’Hare and Midway. But this year, booking a trip – whether it’s a quick getaway to Milwaukee or a long-planned international adventure – feels different. The ongoing conflict in the Middle East is causing ripple effects across global air travel, and frequent federal budget debates in Washington D.C. Are contributing to unpredictable wait times at airports. It’s a landscape where uncertainty reigns, and increasingly, travelers are turning to travel insurance for peace of mind.

Navigating the New Normal: Why Travel Insurance is on the Rise

Purchases of “cancel for any reason” (CFAR) insurance plans have seen a significant jump, with a 27% increase in March 2026 alone, according to insurance comparison site Squaremouth. This surge isn’t just about international destinations. even domestic travel is prompting more people to consider coverage. Suzanne Morrow, CEO of InsureMyTrip, explains, “Uncertainty is exactly when travel insurance becomes more significant.” However, she cautions that understanding what’s covered – and what isn’t – is crucial. For example, a missed flight due to a lengthy TSA line, a common frustration at O’Hare, typically isn’t covered. But a flight delay caused by crew impacts, a scenario becoming more frequent with global disruptions, might be.

The question then becomes: when *should* you buy travel insurance? Morrow suggests it makes the most sense for trips where you have a significant financial stake. “If you’re traveling internationally, going more than 100 miles from home, or booking a trip with significant prepaid, nonrefundable costs like flights, hotels, cruises, or tours, it’s worth considering.” Chicagoans planning a summer trip to Europe, a fall cruise on the Great Lakes, or even a non-refundable weekend getaway to Galena should definitely evaluate their options.

Beyond financial protection, insurance is also a good idea if you’re concerned about specific issues like illness, severe weather (think potential lake-effect snow impacting flights in winter), or other travel disruptions. However, for a simple weekend road trip within Illinois with minimal expenses, it might not be necessary. The timing of your purchase is also key. Morrow advises buying a policy immediately after making your first trip payment. “That’s when you unlock the most valuable benefits,” she says. “Waiting doesn’t save you money; it just limits your options.”

Decoding the Options: CFAR and Beyond

So, what kind of travel insurance policy is best? Experts recommend using comparison tools like Squaremouth or InsureMyTrip to find a plan that matches your specific needs. For the most comprehensive protection, upgrading to include cancel for any reason (CFAR) coverage is highly recommended. This add-on has gained popularity recently, as Chrissy Valdez, senior director of operations at Squaremouth, notes, “The current travel landscape can make travelers feel as though they have no control over their plans. By purchasing travel insurance with cancel for any reason, you can regain a sense of control and plan your trips with more confidence, knowing you have protection.”

However, CFAR coverage comes at a cost, typically increasing a policy’s price by 40% to 50%. Despite the expense, it covers scenarios that standard policies don’t, such as events foreseen at the time of booking (like potential disruptions related to ongoing government debates) or simply a change of heart. It’s important to check if CFAR coverage is an option when purchasing your initial plan, as not all policies offer it. Typically, you must purchase the add-on within 14 to 21 days of your initial trip deposit.

The recent airspace closures following the U.S.-Israel strikes on Iran, as reported by CNBC, highlight the value of this type of coverage. Thousands of flights were cancelled, disrupting travel plans and stranding passengers. The Browne Jacobson report also points out that standard travel insurance policies often exclude coverage for disruptions caused by acts of war, leaving travelers to bear the costs of additional flights, hotels, and food. This is particularly relevant for Chicagoans with connecting flights through affected hubs like Dubai International Airport or Hamad International Airport.

Protecting Your Chicago Travel Investments: A Local Resource Guide

Given my background in risk management and financial planning, and seeing the increasing anxiety among Chicago residents regarding travel disruptions, I seek to offer some guidance on navigating this complex landscape. If these trends are impacting your travel plans, here are three types of local professionals you should consider consulting:

Independent Insurance Brokers:

Don’t rely solely on the insurance offered by airlines or travel agencies. A local, independent broker specializing in travel insurance can assess your specific needs and compare policies from multiple providers. Look for brokers with certifications like Certified Insurance Counselor (CIC) and a proven track record of assisting clients with complex travel scenarios. They should be able to explain the nuances of CFAR and IFAR coverage in plain language.

Travel Law Attorneys:

If you encounter a dispute with an insurance company or airline, a travel law attorney can advocate on your behalf. Seek out attorneys with experience handling travel insurance claims and a deep understanding of airline contracts. The Illinois State Bar Association can provide referrals to qualified attorneys in your area.

Financial Advisors with Travel Planning Expertise:

A financial advisor can aid you assess the financial risks associated with travel and develop a comprehensive plan to protect your investments. Look for advisors who specialize in travel planning and can integrate travel insurance into your overall financial strategy. They can also help you understand the tax implications of travel-related expenses and insurance claims.

Ready to find trusted professionals? Browse our complete directory of top-rated insurance brokers in the Chicago area today.