The Average Cost of Travel Insurance
Making plans and booking a vacation is always exciting. There’s plenty to think about, from comfortable hotels to fun tours and excursions. While travel insurance isn’t quite as titillating, it’s a key element to think about when gearing up for a big tri
If you’re embarking on a small, less expensive domestic trip, travel insurance may not be necessary. But for those bigger trips abroad, having travel insurance will give you peace of mind by providing a safety net when you need it.
So, what’s the average cost these days of travel insurance, anyway? Let’s take a look.
What is Travel Insurance?
Before diving into costs, what is travel insurance and how does it work?
In short, travel insurance gives customers financial protection when traveling. This can be something small, like lost baggage during a flight, or something bigger, like a medical emergency. Traveling will always come with some uncertainty, so it’s wise to be prepared for any unexpected situations that may arise.
So, let’s say you’re no longer able to travel due to an unforeseen event, like a death in the family, trip cancellation insurance can reimburse you for all pre-paid, non-refundable expenses you’ve made.
Factors Involved When Calculating Travel Insurance
Travel insurance isn’t just a flat fee that everyone pays. The cost will vary—typically 4%–8% of the trip’s cost—and depends on several factors.
|Age||Similar to health insurance, age is one element that can increase or decrease policy rates. As you might expect, the older you are, the more you’re going to have to pay. Most travel insurance companies have age brackets based on where they see shifts in claim amounts and claim volume.|
|Health of Travelers||Your health is another determining factor involved in policy prices. If you have any pre-existing health conditions, you’ll either pay a higher rate or be exempt from certain policy coverages.|
|Trip Cost||Simply put, big expensive trips are more costly to insure than smaller trips. Keep in mind that this is based on your prepaid, non-refundable expenses. So, a big trip abroad with few prepaid expenses might actually have a lower travel insurance cost than a short domestic trip with a ton of prepaid expenses.|
|Plan Type||You’ll find that basic travel insurance plans are cheaper than high-end plans simply because they cover less. Even if you think basic insurance is enough, always compare the price of a basic and an expensive plan to see how much more coverage it offers for the price difference. You’d be surprised at how much more coverage you can get for a little more money.|
|Deductible||Similar to other types of insurance, selecting a lower deductible policy will result in a higher travel insurance rate since you’ll be paying less out of pocket if something happens.|
|Number of Travelers||If you’re traveling with family, you can have one travel insurance plan to cover multiple people, with each person having their own premium. In general, the more people on a policy, the more expensive the policy will be.|
|Destination||Many travel insurance companies will factor the destination into their price. This is due to some places being safer than others. If you’re visiting a country experiencing unrest or that has high crime rates, your insurance costs may be higher since your insurance sees it as more of a risk. This isn’t always the case, however. Let’s look at two different types of trips. One trip is to a big city with high crime rates, and the other trip is to a low-crime, not-easily-accessible jungle abroad. Even though the crime rate is low, insurance companies will likely see the jungle trip as more adventurous and riskier than a trip to a city, where you’re more likely to avoid dangerous areas. The destination also matters because some places have higher health care costs which will increase the price of your policy.|
|Trip Length||Longer trips tend to be more costly than shorter trips, so you can expect the trip length to factor into the average cost of travel insurance. Not only are there more prepaid costs involved on a longer trip, but there’s also a higher probability that something might happen. Makes sense, right?|
Range of Travel Insurance Costs
As you can expect, basic travel insurance is the cheapest and will cover less than middle-tier and comprehensive coverage. Here are the average costs of each tier for plans found on TravelInsurance.com:
Basic Coverage: $103
Basic coverage will typically cover just a few things, like trip cancellation and baggage loss.
Mid-Range Coverage: $124
Mid-range coverage will often include basic coverage plus health insurance and theft.
Comprehensive Coverage: $162
Comprehensive coverage offers the most benefits and the best protection. It covers basic and mid-range protection plus 24-hour traveler assistance, accidental death, and more.
5 Tips When Buying Travel Insurance
If you’re shopping around for travel insurance, here are a few tips to keep top of mind:
1. Always start by asking yourself what the financial risk is when traveling. Are you going somewhere dangerous? Are you doing anything that comes with a higher probability of getting hurt? If something were to happen, can you bear the costs alone?
2. Take a look at what coverage you already have. Remember, some credit cards offer some form of travel insurance. Also, check what coverage your health care provider offers when traveling.
3. Examine how much of your trip is refundable and how much isn’t. When booking a hotel or excursion, check to see if they offer a flexible cancellation policy.
4. Always compare prices to find the best rates. Choose the best travel insurance plan package for you and get quotes from multiple companies online.
5. Once you’ve tapered down your search to just a couple of insurance companies, be sure to fully review the policy details to see what limitations or exclusions there are. You might find that the cheaper plan doesn’t cover as much as you’d like or excludes coverage you want.
Average Cost of Travel Insurance by Company and Age
Below are the average costs of travel for multiple insurance companies based on the following scenario: A U.S citizen living in California traveling to France for one week in mid-June with the trip costing $5,000. We’ve also compared quotes based on different ages with this same scenario.
You can get a quick quote yourself from multiple companies by using our Compare and Buy Online tool.
These policies range from basic to top-of-the-line full coverage, and only includes companies in our network.
|Travel Insurance Company||Average Plan Cost 30-Year-Old||Average Plan Cost 50-Year-Old||Average Plan Cost 70-Year-Old|
|AXA – Silver Plan||$115||$170||$319|
|AXA – Gold Plan||$141||$207||$391|
|AXA – Platinum Plan||$174||$255||$481|
|Travel Insured – Trip Protector Lite||$144||$161||$281|
|Travel Insured – Worldwide Trip Protector||$194||$237||$361|
|Travel Insured – Worldwide Trip Protector Plus||$320||$379||$542|
|April – Choice Plan||$88||$193||$411|
|April – Pandemic Plus Plan||$174||$199||$445|
|April – Cruise Plan||$145||$206||$427|
|April – Annual Plan||$270||$551||$945|
|CSA – Custom||$175.65||$210.21||$333.24|
|CSA – Custom Luxe||$233.61||$298.40||$546.78|
|AIG Travel Guard – Basic Plan||$145||$214||$325|
|AIG Travel Guard – Silver Plan||$149||$224||$370|
|AIG Travel Guard – Gold Plan||$178||$269||$466|
|AIG Travel Guard – Platinum Plan||$283||$400||$648|
|Travelex – Travel Basic||$146||$226||$398|
|Travelex – Travel Select||$201||$309||$556|
|RoamRight – Essential||$158||$240||$403|
|RoamRight – Preferred||$176||$270||$473|
According to the US Travel Insurance Alliance, Americans are spending $4 billion annually on travel insurance, and it’s no wonder why. Booking the right policy for your vacation will give you peace of mind and allow you to focus on your trip, stress-free.