Average cost of travel insurance

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 — if you lose your baggage, need to cancel your trip, or encounter unexpected medical costs while traveling.

According to Bankrate’s 2022 Travel Woes survey, “79% of travelers who have taken an overnight trip outside their local area this year experienced at least one travel-related issue.” Having travel insurance in place can keep these minor issues from turning into major, trip-ruining disasters.

What is travel insurance?

Travel insurance is a type of insurance policy that protects any money spent on domestic or international travel. Many travel agencies and airlines offer travel insurance as an add-on to your booking, although you can also seek out your own policy on any travel you book yourself.

Types of travel insurance

A few of the different types of travel insurance you may want to consider include:

• Damage to personal property or rental cars
• Trip cancellation
• Lost baggage
• Coverage for medical expenses abroad
• Accidental death or flight accident coverage

The cost of these policies varies based on the type of travel insurance you purchase, as well as the value of your trip and your personal risk factors. The amount of coverage you elect can also affect your rates. Where policies have different tier plans available, you’ll generally pay more for higher levels of coverage.

You may be able to get your next trip covered through 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 of these benefits.

How much is travel insurance?

The amount you’ll pay for travel insurance will depend 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.

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, as older travelers are more likely to become ill or injured on a trip. For example, a 2021 analysis conducted by AdvisorSmith found 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, affordable policies can still be found. 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 will be in most cases.

According to data from AdvisorSmith, average premiums range from $50 for a trip that costs $1,000 to $447 for a $10,000 trip.

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 your premium will likely be, 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.

Per AdvisorSmith, a single adult traveling alone can expect to pay an average of $111, while a party traveling with two adults and two children will pay closer to an average of $167.

2023 travel insurance outlook

With the COVID-19 pandemic restrictions largely behind us, travel has surged since the second half of 2022. And 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.

While inflation is beginning to cool, consumers are likely to continue feeling its sting for the foreseeable future. In fact, Bankrate’s 2023 survey on summer travel found that nearly two-thirds (62 percent) of those who say they can’t afford a vacation this year cite inflation or rising prices as a primary concern.

These higher travel costs are yet another reason the purchase of travel insurance remains popular, as travelers increasingly see the value of insuring their larger investments into more expensive trips.

FAQs

• • Why do I need travel insurance?

    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.
    

  • Is travel insurance worth it?

    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.
    

  • How do I buy travel insurance?

    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.
    

  • What does travel insurance cover?

    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.