July 1, 2018

How Much Does Travel Insurance Cost?

How much will you have to pay for travel insurance? Read on to find out the costs and what affects the price.

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A standard travel insurance policy costs between 4% and 10% of your pre-paid, non-refundable trip cost.

What's included in pre-paid, non-refundable costs?

  • Any payments you made for a cruise, tour, or hotel. This includes deposits.
  • Rent or deposits on property where you're staying.
  • Concert tickets, theme park passes, or event tickets.
  • Pre-paid transportation, like travel to an airport or port of call.
  • Airline tickets that are not fully refundable.

This does not include arrangements that can be changed or rescheduled.

For example: You can't go on your trip and will miss your hotel reservation. Instead of canceling the booking, the hotel rebooks you on a later date. Since you're still getting the room, you're not actually losing money. This doesn't qualify as a non-refundable cost.

It's important you understand the cancellation process each time you book something in advance. Be sure you can truly cancel, so you can claim insurance benefits if needed.

What else is not included?

  • Items you purchase during your trip.
  • Activities you pay for after your departure.
  • Travel documents you obtain after your departure.
  • Lodging you pay for after your departure.
  • Any other expenses you did not pay for in advance of your trip.

How is cost calculated?

  • Trip Coverage
    Trip cancellation coverage focuses on your trip and travel. Limited medical coverage is also included.

    In most cases, the cost for trip plans is based on the following:

    • Total trip cost (pre-paid, non-refundable expenses)
    • Age of travelers
    • Length of trip
    • Add-on or optional coverage

  • Travel Medical Coverage
    Travel medical plans focus more on medical benefits. Most plans include trip coverage as well, but the benefits are not as robust.

    The cost for travel medical plans is based on the specifics of your trip. This may include the following:

    • Age of travelers
    • Length of trip
    • Coverage options
    • Destination

What else affects the price?

  • Deductibles
    Choosing a high deductible can lower your overall insurance bill. But you'll also pay more out of pocket if you have any claims.

  • Medical maximums
    Increasing your medical coverage on a travel plan will increase your premium.

  • Evacuation maximums
    High evacuation benefits usually mean a higher insurance cost. Consider your situation carefully before you lower your evacuation limits. Evacuations are expensive, and a low limit can be risky.

  • Cancel for any reason coverage
    You may find a plan that includes cancel for any reason benefits as part of its standard coverage. But probably not. There's an additional cost for this benefit on most plans.

  • Hazardous sports coverage
    If you plan to take part in any dangerous or risky sports, you'll pay extra for hazardous sports coverage. It covers activities like scuba diving and mountain climbing.

  • Other add-on benefits
    Travel insurance plans offer a variety of other add-on options. You can tailor your plan to fit your specific needs, but you should expect to pay more for the added coverage. Add-on's may include:

    • Concierge support
    • Identity theft protection
    • Non-medical evacuation coverage
    • Professional or semi-professional sports coverage
    • Rental car coverage

Finding the best price

A standard travel insurance policy will cost you around 4% - 10% of your trip cost.

If you want something cheaper, look for an economy plan. If you'd rather have more coverage, go for a premium plan.

There are hundreds of travel insurance companies fighting for your business. You may find yourself visiting website after website to check prices and coverage.

Instead, find a good online comparison tool that does the work for you. Plug in your details and compare coverage and price across several different policies.

More from CreditDonkey:

Is Travel Insurance Worth It

Medical Evacuation Insurance

Trip Insurance Cover Medical Expenses

Travel Insurance

Allianz Travel Insurance Review

What is covered by Allianz travel insurance? A lot. Keep reading to learn if this company is good for you.

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