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.
Plans with an insured trip cost, referred to as comprehensive policies, typically cost between 5% and 10% of the total amount you’re insuring. Some travelers opt for medical-only travel insurance policies, which offer less benefits but come at a significantly lower price point.
In 2023, the overall average cost among all travel insurance policies purchased on squaremouth.com is $283. Comprehensive travel insurance policies average $403, compared to $96 for medical-only policies.
When shopping for travel insurance, it’s important to understand the higher premiums don’t always equate to better coverage. Oftentimes, you can find adequate travel insurance coverage at an affordable price by comparing policies from different providers.
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. How much you insure dictates how much reimbursement you are eligible for in the event you need to cancel your trip. 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 that cover cancellations, delays, medical emergencies, and personal belongings are more expensive. 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 from one plan to the next, 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 40-50%. In 2023, the average CFAR policy costs travelers $632.
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 that many providers 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’s core goal is making sure travelers don’t spend more than they need to on travel insurance. For that reason, Squaremouth always recommends that travelers look for the least expensive policy that offers the coverage they need.