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Next time you’re booking travel, it may be tempting to skip purchasing a travel insurance policy to cut corners and save some money. But saving a little now could actually end up costing you more later — in the event that you lose your baggage or need to cancel your trip or cover medical costs during your trip.
Here’s a breakdown of what you can expect to pay for travel insurance and what kinds of factors might drive that cost up or down.
|Average cost of travel insurance||$103, basic coverage (Travel Agent Central)|
|Average cost of a comprehensive policy||57% more than basic coverage (Travel Agent Central)|
|Travel insurance cost as a percentage of trip cost||4%–8% (Travel Agent Central)|
|Percentage of travelers that have filed a claim||17%, or one of six (USTIA)|
|Percentage of Americans who purchase travel insurance||38% (Travel Agent Central)|
|The biggest reason travelers purchase travel insurance||Trip cancellation protection (Travel Agent Central)|
|Total amount spent on travel insurance||About $17.6 billion in 2021 (Yahoo)|
|Percentage of trips affected by travel changes||20.1% of flights delayed, and 3.2% canceled, January-May 2022 (ValuePenguin)|
What is travel insurance?
Travel insurance is a type of insurance policy that protects any money spent on domestic or international travel. Think damage to personal property or rental cars, trip cancellation, lost baggage, coverage for medical expenses abroad, and accidental death or flight accident coverage. Many travel agencies and airlines offer travel insurance as an add-on to your booking, although you can seek out your own policy on any travel you book yourself.
Another way to get your next trip covered is to check your credit card perks. Some credit cards, particularly the best travel cards, offer travel insurance and discounts, with higher-fee cards typically offering higher levels of coverage. If you’re a frequent traveler, it could be in your best interest to read the fine print on your credit card to see if you can take advantage of any travel-related perks.
How much does travel insurance cost?
The amount you’ll pay for travel insurance will depend greatly on a few different factors such as your age (travel insurance prices tend to increase the older you get), the number of travelers you’ll need to insure and the length of your overall trip. Still, experts say you can expect to shell out anywhere from 4 to 11 percent of the total cost of your trip on your travel insurance policy.
Travel insurance policies generally fall into one of three tiers: basic, middle-tier, and comprehensive coverage. Basic coverage is typically the most affordable option and includes benefits such as trip cancellation and lost baggage, but it may require that you pay a deductible for each sickness or injury.
Middle-tier coverage may include the same benefits as basic policies, with an added health insurance benefit. A more expensive, comprehensive policy may include all of the benefits as basic or middle-tier policies, but the policyholder will likely have a higher claim limit.
Here’s a breakdown of the average cost of travel insurance, depending on the level of coverage your policy may fall into.
|Travel insurance policy||Average cost|
Average cost of travel insurance by age
Travel insurance providers evaluate risk in the same way traditional insurers do when it comes to their premiums. The older a traveler is, the more they can expect to pay for coverage because older travelers are more likely to become ill or injured on a trip. In a 2021 analysis conducted by AdvisorSmith, it was estimated that average prices differed from a low of $92 for a young child to a high of $805 for a centenarian.
Here’s a breakdown of the average cost of travel insurance by age.
While higher costs are more common among older travelers, it doesn’t mean an affordable policy isn’t within reach. Shopping around and comparing quotes from different providers is key to finding the right level of coverage at the right price point.
Average cost of travel insurance by trip cost
The total length of your trip can also directly impact the amount you can expect to pay for travel insurance. A two-week trip will likely cost you more than a weekend getaway. And the higher the overall trip cost, the higher the premium, in most cases. As a general rule, experts say travelers can expect to spend 4 to 11 percent of the total cost of their trip on travel insurance.
Here’s how your travel insurance costs could increase as the total cost of your trip increases.
|Trip cost||Average premium cost|
Average cost of travel insurance by number of travelers
One factor you should take into consideration when planning your trip and selecting a travel insurance policy is the number of travelers in your group. The more people you’ll be traveling with, the higher the premium because there’s a greater risk of your insurer having to cover unexpected costs. This is especially true for older groups who also have an increased likelihood of incurring medical expenses during a trip. Here’s what that average cost could look like for a solo traveler versus a few different types of groups.
|Number of travelers||Average cost|
|One adult, one child||$122|
|Two adults, one child||$156|
|Two adults, two children||$167|
2023 travel insurance outlook
With the COVID-19 pandemic restrictions largely behind us, travel has surged in the second half of 2022. With that surge has come higher prices for nearly all kinds of travel reservations, on top of the high inflation being experienced in the rest of the economy. The increased cost of travel is yet another reason that the purchase of travel insurance remains popular. As travel becomes less affordable, many are still choosing to resume traveling, especially on bigger, more expensive trips. However, they are more eager to insure their larger investment.
There are several reasons that people buy travel insurance, including trip cancellation, trip interruption and medical problems. Just keep in mind that there are often exclusions that prevent you from submitting a claim for various reasons.
Purchasing travel insurance can give you the peace of mind that may be worth paying the premium, even if you never have a travel problem. And for those who experience a covered event, the premium will certainly be justified.
Travel insurance can be purchased directly from insurers, or it can be purchased in conjunction with a travel reservation. For example, many airline, hotel and online travel agencies will offer travel insurance at the time of purchase.
There are many types of travel insurance, and it can include coverage for illness and injury, lost luggage and trip delays. There is also coverage called Cancel For Any Reason (CFAR), which allows travelers to be covered for any eventuality, including those normally excluded from most policies.