- Travel insurance typically costs between 5% and 10% of your total trip cost.
- Carriers consider a number of different factors to determine policy rates.
- It’s important to know about different insurance options and what they do and don’t cover.
- Take your time to shop around and compare policies to maximize your savings.
If you’re planning a trip, you’ve likely budgeted for the flight, hotel, rental car, food and various activities. But you may also want to look into travel insurance to safeguard the money you’ve already paid, in case something goes wrong.
“It’s important to assess how you might lose money and what your biggest risks are,” says Ben Carothers, a flight coordinator for Global Air Ambulance, a company that provides medical transport services worldwide.
But just how much is travel insurance, and what does it cover? Here’s what you need to know.
How much is travel insurance?
According to travel insurance provider SquareMouth, you can expect to pay between 5% and 10% of your total trip cost on a travel insurance policy premium.
If you’re experiencing some sticker shock, it’s important to note that there are a handful of factors that go into determining your policy rate, so it very well could cost less than the average. Factors include:
Total trip cost
If you’re getting trip cancellation or interruption insurance, the amount you paid in nonrefundable fares will directly impact your rate because that’s what the insurer will ultimately pay out if you file a claim.
The older you are, the more expensive your coverage will be, especially if you opt for medical coverage.
Length of travel
The longer you’re traveling, the higher the chances are that something will go wrong. As a result, you can expect a higher rate on longer trips.
There are a handful of different types of travel insurance, and some are more expensive than others. In particular, trip cancellation, emergency medical and travel delay insurance tend to be pricier.
With certain types of coverage, you can adjust how much coverage you want, and the more you get, the more money you’ll pay upfront. Additionally, add-ons like accidental death and dismemberment coverage, cancel-for-any-reason clauses and rental car damage insurance will all add to your premium.
If you’re traveling domestically, you may have coverage from your existing health, auto and other insurance policies. But a trip abroad is another story entirely. “The potential risk when traveling internationally is always higher,” says Carothers.
Types of travel insurance and what they cover
Depending on the type of trip you’re taking, travel insurance companies provide a lot of options from which you can choose. Here are some examples:
If you have to cancel your trip due to a covered reason, such as an injury or illness or a death in the family, this will reimburse you for certain nonrefundable expenses.
This coverage is similar to trip cancellation insurance but reimburses you for certain nonrefundable expenses if you have to cut your trip short due to an injury or illness or a death in the family.
If your trip is delayed overnight or for a minimal amount of time, this coverage may help you pay for food and lodging if the airline doesn’t provide those for you.
If you’re traveling abroad, your health and dental insurance policies back home won’t help you. This type of coverage will help pay some or all of your costs if you need medical attention.
Emergency medical evacuation
In the event that you experience a major medical episode, this insurance covers the cost of getting you back home.
Lost, damaged or stolen luggage
If your suitcase is lost, damaged or stolen, this insurance will reimburse you for the cost of replacing your belongings and luggage.[4, 6]
If the airline loses your baggage, but it’s on its way, you’ll still need clothing and toiletries while you wait. Baggage delay insurance will reimburse you for some or all of those expenses until you receive your luggage.
Rental car damage
If you rent a car and cause an accident, this will help pay for the repair or replacement of the vehicle. Note, however, that liability insurance isn’t typically included, so you might need to purchase that from the rental car agency.
Accidental death and dismemberment
Also sometimes called travel accident insurance, this provides protection for you and your family if you die or become dismembered on a trip.
You can also obtain a more specialized insurance policy for cruises, road trips, extreme activities that are excluded by normal policies and more.[7, 8]
Keep in mind that these coverages aren’t generally sold individually. Travel insurance plans typically include multiple types of coverage, with prices varying based on what’s offered and what isn’t.
Shop around and read the fine print
Before you buy a travel insurance policy, it’s crucial that you take the time to compare prices from multiple insurance carriers. In addition to checking the rates, also take the time to review what’s covered and what isn’t. Each policy will come with a different set of coverage types, coverage amounts and limitations.
“There are quite a few insurance comparison tools online that do a pretty good job, but it’s best to give companies a call with a few questions about the risks you’re most concerned about and see if they’re covered,” says Carothers.
Policies will typically come with terms and conditions, which will tell you what’s excluded. For example, unless you have trip cancellation coverage that lets you cancel for any reason, you can’t get reimbursed for nonrefundable costs because you changed your mind about the trip or you found a better deal elsewhere.
Also, if an airline is reimbursing you for delay-related expenses, you can’t double-dip on coverage with your insurance policy.
Finally, check your credit card benefits guide to see if you already have some of these coverages in place. Credit card companies typically require you to pay for your trip with the card to get the coverage, but you may be able to get many of the same benefits as a travel insurance policy without the added expenses.