Travel insurance costs have risen by almost 8% over the past year, with the average policy now accounting for about 6% of a trip’s total price, according to data from insurance marketplace SquareMouth.
That would amount to roughly $600 for a $10,000 holiday. The US Travel Insurance Association says travellers can generally expect to pay between 4% and 8% of their total trip cost, or about $40 to $80 for every $1,000 spent.
SquareMouth’s figures put the average cost of travel insurance at just over $450 over the past year. The final price varies according to the level of cover, the cost and length of the trip, and the age of the traveller.
What travel insurance covers can cost
A comprehensive travel insurance policy costs an average of $456, while travel medical cover alone costs about $87, according to the latest SquareMouth data.
Cover allowing travellers to cancel for any reason costs an additional $246 on average. Annual policies cost about $401 for medical-only cover and $523 for comprehensive cover.
Medical-only and single-trip policies are generally cheaper than comprehensive annual cover. However, they may offer less protection if a holiday is cancelled, delayed or disrupted, or if luggage is lost.
Factors affecting travel insurance costs
The total cost of the trip is one of the biggest influences on the premium because insurers may have to reimburse substantial prepaid expenses if a holiday is cancelled. Insurance for a $30,000 trip, for example, will generally cost more than cover for a $5,000 break.
Age can also affect the price. Older travellers, particularly those over 65, are usually charged more because they are considered more likely to require medical care while abroad.
Longer trips typically cost more to insure because there is a greater chance of something going wrong. Some insurers also impose maximum trip lengths, making it important to check the policy conditions before buying cover.
Additional protection and more comprehensive policies will generally increase the premium. Travellers taking part in activities such as scuba diving or bungee jumping, visiting places where evacuation could be difficult, or travelling with a pre-existing health condition may want to consider broader cover.
How to reduce the cost of travel insurance
Travellers can compare policies from several providers before making a decision. Existing protection through a credit card or a home or renters insurance policy may also reduce the need for separate travel insurance.
Anyone planning several journeys over the next year may find an annual policy cheaper than buying separate cover for each trip. Annual policies can still include limitations, exclusions and other requirements, so the terms should be checked carefully.
Basic medical-only cover may suit people taking a short, low-cost trip who can afford to absorb the cost of cancellation, delays or lost baggage themselves. More comprehensive insurance may be worthwhile when the potential financial loss or medical costs would be significantly greater than the premium.
