How Much Does Travel Insurance Cost in 2025?

How Much Does Travel Insurance Cost in 2025?

Last Updated: 5 min read

Travel insurance costs vary from one traveler to the next and depend on multiple factors, including your total trip cost, the number of travelers in your party, traveler ages, trip length, coverage requirements, and policy type.

Each travel insurance provider calculates premiums slightly differently to cater to its target demographic. This explains why you may find two companies offering nearly identical policies at different prices. 

Follow along as we look at the average cost of travel insurance this year, break down how premiums are calculated, and share tips on how you can find great coverage without breaking the bank. 

The Average Cost of Travel Insurance in 2025

The average cost of travel insurance is roughly $309. This number is based on more than 500,000 travelers that used Squaremouth to protect their trips within the past year. 

The majority of travel insurance policies are comprehensive, and are designed to protect your travel expenses in the event you’re forced to cancel your trip. As a rule of thumb, comprehensive travel insurance plans cost between 4-10% of your prepaid, non-refundable trip costs

Does Higher Premiums Mean Better Coverage?

High premiums do not always equate to better protection. When choosing between similar policies that meet your coverage needs, we always recommend opting for the less expensive plan. 

Purchasing travel insurance through sites like Squaremouth allows you to see how plans from the best travel insurance companies compare when it comes to price and coverage. 

Shopping around for travel insurance can also help you find more affordable protection compared to plans offered through airlines, cruise lines, hotels, and other travel suppliers.  

What Determines the Cost for Travel Insurance?

There are five key factors that help travel insurance companies determine premiums; your total trip cost, traveler ages, trip length, coverage requirements, and policy type.

Other factors may impact select policies, such as your state of residence, destination, and any policy add-ons you may want to include as part of your coverage.

Total Trip Cost

The cost of comprehensive travel insurance coverage is largely based on how much your trip costs. If you want a policy that includes Trip Cancellation and Trip Interruption insurance, you will be asked to include the cost of your trip when creating a quote. 

Your trip costs will be a sum of all your prepaid, non-refundable expenses made towards your trip, such as flight tickets, accommodation expenses, rental car reservations, and other trip expenses you made in advance. 

In the event your trip is cancelled or interrupted for a covered reason, your policy will reimburse your covered trip costs up to the amount listed on your policy. 

Traveler Ages

Details of your travel party, such as the number of travelers you wish to cover and their ages, will be collected when creating a quote. Typically, the cost of travel insurance increases with age. 

Some travel insurance plans have specific age limits, too. To avoid having a claim denied for being ineligible for coverage, it’s important to correct all age related information. 

Length of Travel

Travel insurance covers you from the moment you leave home until the day you return. The longer your trip, the higher the risk of a travel accident occurring while you’re away. For that reason, providers charge more for vacations with higher trip lengths. 

Most travel insurance companies allow a Maximum Trip Length of 90 days. If your trip exceeds 90 days, you may be required to apply for a temporary visa and purchase medical insurance that lasts for the duration of your extended stay. 

Total Coverage Amounts

Insurance coverage amounts refer to the maximum amount a travel insurance provider will reimburse you under each benefit. The higher the coverage limit, the stronger the level of travel protection the policy provides. 

The best travel insurance companies offer plans that provide strong coverage across all significant benefits.

Coverage amounts included in a travel insurance policy can vary significantly from one plan to the next, especially when it comes to medical coverage. Policies with higher amounts of coverage are often more expensive.

Policy Type

The type of policy you choose also has a big impact on how much you will spend on coverage. 

Single-trip travel insurance is the most common form of travel insurance. These policies are designed to cover one-off trips, and include financial protection against unforeseen medical emergencies, emergency evacuations, trip cancellations, travel delays, and baggage loss. 

Annual travel insurance is another, more expensive insurance option geared towards frequent travelers. These policies are designed to cover medical expenses and other unexpected events for 365 days, regardless of how many trips you decide to take. 

Securing a comprehensive travel insurance plan can offer peace of mind when planning a trip by providing financial protection against unexpected disruptions. These plans are designed to cover a wide range of situations, ensuring you’re protected no matter what. Let’s look at some of the most popular types of coverage to help you determine what you need.

  • Trip Cancellation and Interruption: These cancellation benefits are designed to reimburse your travel expenses if you’re forced to cancel or interrupt your trip for a covered reason. This can include an unexpected illness, injury, death of a family member. 
  • Medical Coverage: Americans traveling abroad risk exposure to medical risks that domestic health insurance may not cover. The Emergency Medical and Medical Evacuation can provide peace of mind by covering the cost of hospital bills, doctor visits, transportation services, and other medical expenses. Deductibles and exclusions may apply. 
  • Travel Delay and Missed Connection: Travel delays are common when using airfare for your trip. Travel Delay coverage reimburses meals, accommodations, and other necessities if inclement weather or mechanical issues cause a delay. Missed Connection coverage helps cover the airfare costs of rebooking flights and additional transportation if a delay causes you to miss a connecting flight.
  • Baggage and Personal Items: Many travel insurance policies include Baggage Delay and Baggage Loss coverage at no additional cost. These benefits can provide reimbursement in the event your personal belongings are lost, stolen, damaged, or delayed during your trip. 

Optional Coverage That Will Directly Increase Your Policy’s Premium

Certain travel insurance benefits are considered add-ons or “optional upgrades” and will directly increase the cost of policies. Those benefits include Cancel For Any Reason, Pre-Existing Condition, Accidental Death and Dismemberment, and Rental Car Damage.

Cancel For Any Reason

Cancel For Any Reason (CFAR) partially refunds your trip payments if you cancel for a reason not explicitly 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 2025, the average CFAR policy costs travelers $632.

Accidental Death and Dismemberment

Accidental Death and Dismemberment (AD&D) is the only travel insurance benefit that provides a lump sum payment to travelers. There are three types of AD&D protection: 24 Hour AD&D, Flight Only AD&D, and Common Carrier AD&D. 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.

Is Travel Insurance Worth It? 

Travel insurance can be a worthwhile investment if you’re concerned about potential issues with your trip. Many travelers purchase insurance to protect their trip expenses, for international medical coverage, and general peace of mind in case something goes wrong before or during their journey. 

On average, travel insurance claims pay out six times the cost of the policy premium, highlighting the potential value of having travel insurance.

To find the best policy at the best price, Squaremouth recommends getting travel insurance quotes from multiple providers. As always, it’s crucial to pay attention to the fine print and be aware of any exclusions in the plan’s details before deciding. By carefully selecting a comprehensive travel insurance policy, you can confidently travel protected against various potential risks.