The holiday season is quickly approaching, and for many, that means traveling home. But for last-minute travelers who haven’t booked their trips, time is running out before costs increase. As the holidays draw closer, hotel and airline rates increase. Those purchasing travel insurance may see premium costs rise as a result.
Premium is the price the traveler pays for a policy, and is calculated by the cost of the trip, the age of the traveler(s) and the duration of the trip. Therefore, a significant increase in trip costs like airfare or lodging may cause an increase in premium as well.
A recent article by USA Today offered data from discount travel booking site, Travelocity, to support the expected increase in travel costs. According to Travelocity, November 12 is the cutoff date before travelers can expect to see airfare and hotel costs significantly increase.
Travelocity analyzed historical booking trends to predict an increase in airfare alone by roughly $38 during the holiday season. Squaremouth, America’s fastest growing traveling insurance comparison site, found that an increase in travel costs by this amount may lead to an increase in premium. Because premium costs fall into price brackets, an increase in travel costs can move a premium to the next bracket, causing the insurance premium to increase as well.