Not sure how much you should pay for travel insurance? Find out exactly what you should pay and find the right option for your trip
The cost of travel insurance can vary greatly based on the policy you choose, the duration of your trip and your own personal characteristics. This article will provide some estimates of what you might expect to pay and what actually determines the cost price of travel cover. The map below shows how much you can expect to pay (on average) for a two week trip for various world destinations.
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Price examples for travellers taking a single trip for 10 days
Price examples for annual travel insurance with Worldwide cover
|Age||Cover Type||Max Duration of Single Trips||Annual Price|
|25||Annual Basic||30 days||$119.26|
|25||Annual Comprehensive||90 days||$299.63|
|65||Annual Basic||30 days||$215.56|
|65||Annual Comprehensive||90 days||$464.16|
|85||Annual Comprehensive||90 days||$989.38|
- Your travel destination: Each country or region has different levels of risk determined by insurance companies, which will influence what you pay based on the likelihood of a claim occurring.
- Period of travel: The longer you are away, the longer the policy, the higher the premium.
- Your age: Like most types of insurance, what you pay increases with age. Most insurers will use the following age thresholds when determining price: 18-24, 25-49, 50-59, 60-69, 70-74, 75-79, 80-89 and 90-120.
- Pre-existing medical conditions: You will be asked when you're purchasing cover if you have any pre-existing conditions. If you have a condition that is not automatically covered, the insurer will either charge you more for cover or exclude the condition from cover.
- The policy you choose: Each insurer will offer different levels of cover that may impact your policy. Most will offer Comprehensive, Essentials and Basic levels of cover with different features. The more comprehensive the cover, the higher your premium.
- Activities you are participating in: Most insurers will let you pay an additional premium to include cover for high-risk activities that are not covered automatically, such as scuba diving or rock climbing.
- Additional cover: Most insurers will let you purchase additional cover for:
- Cruise trips (if not covered automatically)
- Expensive items where the value exceeds that automatically provided
- Removing the excess payable
Adding optional extras to your policy also affects the cost of your premium. Examples of optional extras include:
- Cover for adventurous activities such as hang gliding, scuba diving, skiing and hot air ballooning.
- Rental car coverage to pay the large excess charged by rental car companies in the event of a claim.
- High value items cover for things like expensive laptops that you might bring on you trip.
Given that so many factors can influence the cost of your travel insurance, the secret to obtaining affordable travel insurance is to control those factors as much as possible and also do the following:
- Shop around. Get a number of quotes from different insurance providers and make sure you compare apples with apples (policies that offer similar coverage).
- Be wary of travel agents and airlines. who can charge hefty commissions and consider buying your travel insurance direct from the insurer online.
- Policy choice. If you travel more than once a year, take out an annual multi-trip policy, rather than purchasing a single-trip policy every time.
- Destination. If destination is not important to you, consider taking your holiday somewhere that needs less insurance cover (i.e. Bali rather than the USA).
- Joint policy. If travelling with others such as your family, take out a joint policy rather than individual coverage and investigate the possibility of a group discount.
- Excess. If you can afford it, increase your excess (the amount you must contribute when making a claim), which reduce your premium.
- Other insurance. Use other insurances you may have such as credit card and home and contents insurance to supplement your cover.
The amount of travel insurance you need depends on your particular circumstances. We each have our own comfort levels regarding insurance, with some of us requiring more protection and peace of mind than others.
When deciding how much travel insurance to take out, the following factors should be considered:
- Medical. How old you are, whether you have any pre-existing medical conditions and the healthcare system in the country you are visiting all play a part in determining how much medical cover you need. If you are travelling to a country such as the USA for instance, where healthcare is hugely expensive, you would be wise to take out travel insurance that has unlimited medical and hospital cover.
- Personal belongings. If you are taking expensive items with you on your trip such as cameras, electronics or jewellery, you would be well advised to have insurance with per-item limits that are high enough to cover replacement of those items if lost or stolen.
- Trip cancellation. If you have pre-booked and paid for your entire holiday before you leave home, you should make sure you have sufficient cover to ensure that you’re reimbursed, should your holiday be called off for any reason.
These days, there are insurance providers who specialise in travel insurance for every conceivable kind of traveller. Some of these include:
- Backpackers insurance. Unlike normal travel insurance, which usually covers a traveller for up to 31 days, backpackers or ‘gap year’ insurance, as it is sometimes known, provides extended cover for up to 18 months and can include a number of different countries and cover for a number of different activities. Learn more about backpacker travel insurance.
- Family insurance. This kind of insurance is designed for family groups travelling together and offers group discounts and even free cover for younger children. Care should be taken to ensure that there is a single excess associated with the policy however, as some insurers charge an excess for each family member. Learn more about family travel insurance.
- Winter sports insurance. This is travel insurance tailor-made for those holidaying in the snow. As well as covering ski accidents and medical evacuations, it often also covers expensive equipment against loss or damage and cancellation of pre-paid ski passes.
- Over 65s insurance. Because the cost of normal travel insurance can be more than double for people over the age of 65, some insurers specialise in more affordable insurance for the mature aged traveller. While still more expensive than normal travel insurance such policies often cover more pre-existing medical conditions and offer more generous limits for medical claims. Learn more about seniors travel insurance.
- Business insurance. Unlike normal travel insurance, this kind of insurance covers travellers who work while they are overseas and it also usually includes more generous cover for phones, laptops and other business-related equipment. Learn more about business travel insurance.
Exclusions found in most travel insurance policies (circumstances where cover is not provided) include:
- Acts of war, civil unrest, terrorism or military coups
- Loss or theft of unattended baggage
- Pre-existing medical conditions
- Some natural disasters
- Injuries sustained under the influence of alcohol or drugs
- Dangerous or extreme activities
- Suicide or attempted suicide
- Unlicensed motorcycle use
- Losses incurred due to financial collapse or insolvency of a carrier, accommodation provider or travel operator
- Irresponsible, reckless or illegal behaviour
- Confiscation, detention or destruction of anything by a government authority
- Travel in an air-supported device other than a licensed passenger aircraft (does not apply to licensed hot air ballooning).
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As can be seen, there are many factors that contribute to the cost of travel insurance and some are within our control, while others are not. At the end of the day, the trick to finding cheaper insurance is to decide what you absolutely must have in the way of cover and then be more flexible in those areas where you feel less cover is needed in your particular circumstances.