Travel insurance is meant to protect travelers from financial distress, not cause it. So how much should a travel insurance policy cost? Travel insurance comparison site, Squaremouth, explains the factors that determine policy premiums and reveals how much travelers should expect to pay to protect their trips.
In general, travelers should expect a standard policy to cost anywhere from 5%-10% of their total prepaid, non-refundable trip cost. Travelers who don't insure the cost of their trip can expect to pay much less. In 2019, the overall average cost for a travel insurance policy purchased on squaremouth.com is $249.
What Determines Premium Cost?
The premium varies by policy and provider, depending on three primary factors: total trip cost, age of travelers, and length of travel.
Total Trip Cost
Travelers have the choice to insure all, some, or none of their prepaid and nonrefundable trip costs for Trip Cancellation coverage. Insurable trip expenses can include airfare, hotel accommodations, tours, and excursions, among others.
Age of Travelers
Each provider has a different target demographic, and structures their premiums to attract customers in that age group. However, in general, a travel insurance policy will also become more expensive as travelers get older, typically starting at age 65. Additionally, minors can often be added to a plan at no additional cost, or at a lower rate, depending on the provider.
Length of Travel
Travel insurance is designed to cover travelers from "door-to-door", starting when a traveler leaves home and ending when they return. The longer the trip duration, the higher the policy's premium.
Optional Policy Upgrades
In addition to standard benefits, many providers offer travelers the ability to increase coverage with "optional upgrades" that result in a direct increase in premium cost. Those benefits include Accidental Death and Dismemberment and Rental Car Damage upgrades, which add a predetermined amount to your premium, and Cancel For Any Reason coverage, which typically increases a policy's premium by about 40%.
Pricier Policies Don't Always Offer Better Coverage
When it comes to travel insurance, a higher price tag doesn't necessarily mean better service or benefits. When shopping for a policy, travelers should first decide how much coverage they need for their trip, and then select the least expensive policy that meets their specific needs.
Squaremouth compares travel insurance policies from every major travel insurance provider in the United States. Using Squaremouth's comparison engine and third-party customer reviews, travelers can research and compare insurance products side-by-side. More information can be found at www.squaremouth.com.