How Much Does Travel Insurance Cost?
Updated on: September 2022
Written by: Lisa Davis
Choosing the best travel insurance plan not only comes down to what the plan covers but also how much it costs. So, when planning a vacation and deciding if you want to protect your investment with travel insurance, asking “How much does travel insurance cost?” is a reasonable and smart question.
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The Factors of Travel Insurance Costs
It is helpful to understand travel insurance pricing guidelines and how costs of a plan are determined. Travel insurance rates and plan benefits vary greatly so there is no one-size-fits-all plan or cost.
In general, a travel insurance plan will cost anywhere from four to 10% of your total pre-paid, nonrefundable trip cost. For example, if you purchase a trip with a total price of $7,500, travel insurance costs will likely range from $300 to $750, depending on variables such if the plan is comprehensive or only covers airfare and hotel costs. Other variables that could impact the cost of a travel insurance plan are:
- Travelers’ ages
- Number of travelers
- Trip length
- Type of coverage you choose
Depending on the travel insurance company, age could be one of the biggest factors impacting travel insurance costs. Some plans charge more for travelers over the age of 65. Other plans might not charge for children under 12, so you could add them to your plan at no cost. A Forbes analysis of travel insurance costs showed that travel insurance for an 80-year-old is on average $683 more than the cost of travel insurance for a 20-year-old.
The type of coverage you choose also impacts travel insurance rates. A basic plan will cost less than a more comprehensive one that includes benefits such as being able to cancel for any reason; medical evacuations; or rental car collision coverage.
“Cancel For Any Reason” (or CFAR) benefits are far more wide-ranging and allow you to get partial reimbursement of a trip’s cost, say 50% to 75%, for canceling for any reason, even if the reason is not listed in the travel insurance plan. Deciding to add CFAR to your travel insurance coverage is based on your tolerance for risk and your personal situation. If you think you might change your mind about going on the trip, purchasing CFAR could be worth it to get reimbursed for some of your trip’s expenses.
Where you depart from and travel to also could impact the cost of travel insurance. For example, an overseas destination could increase the cost of a travel insurance plan compared to getting travel insurance for a trip within the U.S.
Additional Factors That Could Affect the Cost of Travel Insurance
While you can’t control the age of travelers or the type of trip you’ve booked, there are a few factors in your control that can influence the cost of a travel insurance plan, including:
Overall policy maximum – the maximum amount of money a plan will pay toward qualified expenses.
Deductible – the amount of money that you pay out of pocket before the travel insurance policy begins to cover costs. For example, a higher deductible means you pay more in the event of an emergency but the policy’s premium cost less.
Pre-existing conditions – most travel insurance policies only cover illnesses and injuries that begin after your policy’s effective date. Some policies will allow you to purchase additional coverage for pre-existing conditions.
Adventure sports – you can purchase additional coverage to cover accidents caused by higher risk activities such as skiing, whitewater rafting, scuba diving, and more.
How to Keep Travel Insurance Rates Lower
Ways to lower the cost of a travel insurance plan include selecting the right deductible for your needs. If you prefer to keep your premium low, then purchase a high deductible plan.
Selecting a basic travel insurance plan versus a comprehensive one that includes benefits like medical evacuations is another way to keep travel insurance costs low.
The type of trip you are taking can help determine the type of plan you need. If, for example, you are traveling to California to visit family, a basic plan that covers airfare cancellations and lost, stolen, or damaged luggage might be enough coverage. For a more extravagant, costly trip that includes pre-paid tours or a trip that goes to a remote area of the world where an evacuation would be necessary for a medical emergency, purchasing a comprehensive plan is a smart choice.
One other way to keep travel insurance costs down is to comparison shop. Consider the insurance costs and coverages of course, but also look at any additional costs the insurance company may charge such as administrative and processing fees or cancellation charges.
Making the Right Travel Insurance Selection
Travel insurance can be affordable depending on coverage limits and benefits. If your trip is short and within the U.S, your travel insurance needs may be minimal and inexpensive. On the other hand, even a pricier plan can be worth it for the peace of mind of knowing you are covered in the event of a weather or health emergency, especially if the trip includes many prepaid elements, multiple flights and other complexities.