Travel insurance can be a valuable safety net for your trip, but how much should you expect to pay? This guide explores the factors that influence travel insurance costs and provides average price ranges to help you budget for coverage.
The Average Cost of Travel Insurance
According to NerdWallet analysis, the average cost of travel insurance in 2024 is between 6 – 7% of your total trip expenses. However, costs can range from 4% – 16% depending on the provider, level of coverage, and other factors.
For example, for a $1,000 trip, you might pay around $70 for travel insurance on average. But you could find coverage for as little as $40 or as much as $160, depending on various factors.
Factors That Affect Travel Insurance Cost
Total Trip Cost
The cost of your trip has a significant impact on how much you pay for travel insurance. The more you spend on your trip (and insure the trip for), the higher the potential claim payout is for the travel insurance company.
Forbes Advisor analysis: Found that the average travel insurance cost is usually 4% to 6% of the trip cost, with 5% being the average. For a $1,000 trip, the average cost is $58; for a $20,000 trip, it’s $963.
MarketWatch research: According to the U.S. Travel Insurance Association, the average cost of travel insurance ranges from 4% to 8% of your total trip cost.
Type and Extent of Coverage
The type of coverage you choose can greatly affect the cost of your insurance.
Basic vs. Comprehensive Coverage: Basic policies may only cover essential risks like trip cancellation or medical emergencies, while comprehensive policies offer broader protection, including coverage for lost luggage, flight delays, and rental car damage. Comprehensive policies generally cost more.
Cancel for Any Reason (CFAR) Coverage: This add – on allows you to cancel your trip for any reason and get a partial refund. CFAR coverage typically increases the cost of your policy by 40% – 60%. For example, a quote from Travelex without CFAR was $108, but with CFAR it was $202, an 87% increase.
Length of Your Trip
The longer your trip, the higher the cost of travel insurance. Insurers calculate risk based on the amount of time you’ll be away, as there’s more opportunity for something to go wrong.
Short – Term vs. Long – Term Trips: A short weekend getaway will cost less to insure than a month – long international trip. For instance, a 7 – day trip will generally have a lower insurance cost than a 30 – day trip.
Your Destination
The destination you’re traveling to can impact the cost of travel insurance.
Risky Destinations: If you’re traveling to a region with a high risk of natural disasters, political instability, or health concerns, insurers may charge more. For example, a trip to an area prone to hurricanes or a country with a high incidence of infectious diseases may result in higher premiums.
Medical Costs Abroad: Destinations with high healthcare costs, like the United States, may also lead to higher insurance costs, especially if your policy includes medical coverage.
Age of the Policyholder
Your age matters to travel insurance companies, and age tends to affect the rates of those age 60 and older the most.
Forbes Advisor analysis: Revealed that the average travel insurance cost for someone age 80 is $628 more than the average cost for a 20 – year – old. Seniors planning a trip may need to budget an additional 7% to 17% of their trip cost for travel insurance.
Number of Travelers
The number of people traveling and included on the insurance plan plays a part in what you’ll pay for travel insurance. The more people on the policy, the higher the rates will be, but the increase is usually minor.
MarketWatch research: Analyzed rates for a single traveler, a couple, and a family of four leaving from California to Mexico on a 14 – day trip with a cost of $5,000. Rates went up only around $48 for a family of four compared to a single traveler.
Types of Travel Insurance and Their Costs
Trip Cancellation Insurance
Coverage: Reimburses you for non – refundable trip costs if you have to cancel your trip for a reason listed in the policy, such as illness, injury, or a family emergency.
Cost: Can range from 4% – 10% of the total trip cost, depending on the provider and the level of coverage.
Medical Insurance
Coverage: Pays for medical expenses incurred while traveling, including doctor visits, hospital stays, and emergency medical evacuation.
Cost: A basic medical insurance policy may cost around $50 – $150 for a short trip, while a more comprehensive policy with higher coverage limits and additional benefits can cost several hundred dollars.
Baggage Insurance
Coverage: Protects your luggage and personal belongings from loss, theft, or damage during your trip.
Cost: Usually a relatively small portion of the overall travel insurance cost, perhaps $20 – $50 for basic coverage, but can vary depending on the value of your items and the level of protection.
Travel Delay Insurance
Coverage: Reimburses you for additional expenses incurred due to flight delays, such as meals, accommodation, and transportation.
Cost: May add $10 – $30 to the overall cost of your travel insurance, depending on the policy.
Cancel for Any Reason (CFAR) Insurance
Coverage: As mentioned earlier, allows you to cancel your trip for any reason and receive a partial refund (usually around 50% – 75% of non – refundable trip costs).
Cost: Adds a significant amount to the base policy cost, typically 40% – 60% more.
Examples of Travel Insurance Costs
Example 1: A 30 – Year – Old Traveling to Mexico
For a 30 – year – old female traveling from California to Mexico for a 14 – day trip with a $5,000 trip cost:
Berkshire Hathaway Travel Protection – ExactCare: With $25,000 in travel medical benefits and $500,000 in medical evacuation insurance, costs $131.
Berkshire Hathaway Travel Protection – Luxury Care: Offering $100,000 in medical expense coverage and $1 million in evacuation benefits, costs $233.
Example 2: A Family of Four Traveling to Florida
For a family of four (two 40 – year – old adults and two children ages 8 and 10) taking a 10 – day trip to Florida in the summer with a $5,000 trip cost:
The average travel insurance cost is around $304, which is only $47 more than the cost for a couple.
Example 3: A 60 – Year – Old Traveling Abroad
For a 60 – year – old traveler on a trip, the average rates range from $261 for a basic policy to $492 for a plan with more generous benefits.
How to Save on Travel Insurance
Compare Quotes
Get quotes from multiple insurance providers to find the best price and coverage for your needs. Use online comparison tools or work with an independent insurance agent who can shop around for you.
Consider factors like the reputation of the insurer, the terms and conditions of the policy, and the level of customer service.
Bundle Insurance
Some insurance companies offer discounts if you bundle your travel insurance with other types of insurance, such as home or auto insurance. Check with your existing insurer to see if they have any bundle options.
You may also be able to get a discount if you purchase travel insurance for multiple trips in advance.
Adjust Coverage Limits
Evaluate your actual needs and consider reducing coverage limits if possible. For example, if you have a relatively inexpensive trip and don’t need high levels of medical or trip cancellation coverage, you can opt for a policy with lower limits to save money.
However, make sure you still have enough coverage to protect you from significant financial losses.
Be Mindful of Add – Ons
Only purchase add – on coverages that you really need. For example, if you’re not planning to engage in high – risk activities, you may not need specialized coverage for extreme sports.
Carefully consider the cost – benefit of add – ons like CFAR coverage. If the likelihood of canceling your trip for an unforeseen reason is low, it may not be worth the extra cost.
Conclusion
The cost of travel insurance can vary widely depending on factors such as trip cost, coverage type, trip length, destination, age, and the number of travelers. By understanding these factors and shopping around for the best deal, you can find a travel insurance policy that provides the right level of protection at a price that fits your budget. Remember, travel insurance is an investment in the security and enjoyment of your trip, and it can save you from significant financial losses in case of unexpected events.
Related topics:
What is the Best Travel Insurance for Over 70s?
Do I Need Travel Insurance If I Have Health Insurance?
Which Travel Insurance is Best for International Travel?
