The cost for travel insurance varies from traveler to traveler, depending on multiple key factors. Each travel insurance provider calculates premiums differently to appeal to their target demographic.
In general, the cost for a comprehensive policy with Trip Cancellation is typically between 5% and 10% of the total trip cost. Travelers who choose not to insure the cost of their trip can expect to pay much less.
In 2020, the overall average cost for a travel insurance policy purchased on squaremouth.com was $271. The average cost of a policy with an insured trip cost was $309, compared to $82 for policies without a trip cost.
What Determines the Cost for Travel Insurance?
The premium varies by policy, depending on five primary factors: total trip cost, age of travelers, length of travel, the policy type, and total coverage amounts. Other factors may have an impact for select policies, such as state of residence and the traveler’s destination.
Total Trip Cost
You have the choice to insure all, some, or none of your prepaid and nonrefundable trip costs for Trip Cancellation coverage. Insurable trip expenses can include airfare, hotel accommodations, tours, and excursions, among others.
Age of Travelers
Each provider has a different target demographic, and will structure their premiums to attract customers in that age group. However, in general, a travel insurance policy will become more expensive as you get older.
Length of Travel
Travel insurance is designed to cover you from door-to-door, starting when you leave home and ending when you return. The longer your trip duration, the higher a policy’s premium.
Comprehensive travel insurance policies with Trip Cancellation, Emergency Medical, Travel Delay and coverage for luggage are the most expensive, while policies without the Trip Cancellation benefit are often significantly less expensive.
Total Coverage Amounts
The coverage amounts included in a travel insurance policy can vary significantly by policy, especially the medical coverage. Policies with higher amounts of coverage are often more expensive.
Optional Coverage That Will Directly Increase Your Policy’s Premium
Certain travel insurance benefits are considered “optional upgrades”, and will result in a direct increase in the cost for travel insurance policies. Those benefits include Cancel For Any Reason, Accidental Death and Dismemberment, and Rental Car Damage.
Cancel For Any Reason
Cancel For Any Reason partially refunds your trip payments if you cancel for a reason that is not specifically covered by your policy. This benefit is only available for up to 30 days after your initial trip booking, and will generally increase your policy’s premium by about 40%.
Accidental Death and Dismemberment
Accidental Death and Dismemberment is the only travel insurance benefit that will provide a lump sum payment to travelers. This coverage will pay a predetermined amount in the event of loss of life or a limb during your trip.
Rental Car Damage
Coverage for Rental Car Damage is an optional add-on many policies offer. This benefit can cover the cost of damage or theft of a rental vehicle during your trip.
Downselling to Help Travelers Save Money
Squaremouth understands that many travelers have the misconception that more expensive is better. However, the cost of a travel insurance policy does not dictate the quality.
Squaremouth wants to make sure our customers don’t spend more than they need to on travel insurance. We always follow our core value to “downsell,” recommending the least expensive policy that matches your coverage needs.