How Much Does Travel Insurance Cost in 2024?
Travel insurance costs vary from one traveler to the next and depend on multiple factors, including your total trip cost, traveler ages, trip length, coverage requirements, and policy type.
Each travel insurance provider calculates premiums slightly differently to cater to its target demographic. When you ask, “How much does travel insurance cost?” you may find two companies offering nearly identical policies at different prices. But this is where your power to choose comes in, and we’re here to help you make an informed decision when you purchase travel insurance.
We break down what travel insurance costs, why it costs so much, and how certain factors like age and the cost of travel can impact the overall price. Armed with this information, you can better understand and assess the policies and determine what’s right for you.
The Average Cost of Travel Insurance in 2024
Most travelers can expect to pay 5-10% of their insured trip costs on a travel insurance policy. Among travelers who compare and purchase plans through Squaremouth, the average cost of travel insurance is roughly $308. However, this price can vary dramatically depending on your trip details and coverage requirements.
Does Higher Premiums Mean Better Coverage?
Sometimes. Just because a policy is priced higher does not necessarily mean it offers better coverage. Often, you can purchase a trip insurance policy at an affordable price by comparing policies from different providers. Also, remember that many plans offer similar benefits and coverage amounts but can be priced differently, so you can use AM Best Ratings to help you decide between them beyond just looking at cost.
We never want travelers to overspend on travel insurance. We recommend choosing the least expensive option if multiple policies that meet your coverage needs are available. This way, you can make a wise financial decision and save on travel insurance costs.
What Determines the Cost for Travel Insurance?
The premium varies by policy, depending on five primary factors: 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
Travel expenses in the context of travel insurance refer to prepaid, non-refundable trip expenses. These will include expenses such as hotel accommodations, flight costs, pre-booked excursions, and tours, which are typically non-refundable if you have to cancel your trip.
If you want Trip Cancellation and Trip Interruption coverage, you must insure all or some of your trip costs when you buy travel insurance. How much you insure dictates not only the price of the policy but also how much reimbursement you are eligible for if you need to cancel your trip. As a result, trip cost typically has the highest impact on premium. For example, a comprehensive policy with Trip Cancellation costs over $400 on average, while the cost for a medical policy without an insured trip cost is under $100.
Traveler Ages
Each provider has a different target demographic and will structure their premiums to attract customers in that age group. However, travel insurance policies are generally more expensive for older travelers.
Length of Travel
Travel insurance covers you from door to door. It’s designed to start when you leave home and end when you return. The longer your trip, the higher a policy’s premium.
Most travel insurance companies allow a Maximum Trip Length of 90 days. If your trip exceeds 90 days, you may need to consider an annual travel insurance plan, which covers any number of trips taken within 365 days, as a more cost-effective option.
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 the medical coverage. Policies with higher amounts of coverage are often more expensive.
Policy Type
The cost of travel insurance can vary dramatically depending on what type of travel insurance policy you choose.
Comprehensive travel insurance policies with a covered trip cost are the most common type of plan and provide coverage for the most common travel disruptions, such as cancellations, trip delays, medical emergencies, and personal belongings. As previously mentioned, this type of plan is often more expensive than medical-only plans that provide coverage primarily for medical emergencies and may not include other benefits like trip cancellation or delay coverage.
If you are a frequent traveler, an annual travel insurance policy that covers any number of trips taken within 365 days may be a more cost-effective option. These plans can be cost-effective if you are a frequent traveler and take at least 2-3 trips annually. Annual travel insurance plans are primarily designed to provide medical protection for unlimited trips, even international travel, within the one-year period.
What are the types of coverage?
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: Imagine the relief of having your trip costs reimbursed if you need to cancel for covered reasons, such as illness, injury, or severe weather. On the other hand, Trip Interruption coverage provides further peace of mind by reimbursing unused trip expenses if your trip is cut short due to similar reasons.
- Medical Coverage: Americans traveling abroad risk exposure to medical risks that domestic health insurance may not cover. Emergency Medical coverage reimburses expenses for unexpected medical emergencies, including hospital stays and doctor visits. Medical Evacuation coverage ensures you can be transported to the nearest adequate medical facility if necessary.
- 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: Lost or delayed luggage can be stressful. Baggage Delay coverage reimburses the cost of essential items if your luggage is delayed beyond a specified period, typically 12-24 hours. For lost, stolen, or damaged items, Baggage and Personal Items coverage provides reimbursement to replace those items, with per-item limits often ranging from $250 to $500.
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 2024, 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. In 2023, travel insurance claims paid 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.