Edited by: Keri Stooksbury
The Average Cost of Travel Insurance – Facts & Statistics [2022 Data Study]
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As a result of the COVID-19 pandemic, Americans have changed the way they travel and the way they book their travel experience. Booking without travel insurance may have been something you did pre-COVID-19, but is not a risk many are willing to take now. According to the U.S. Travel Insurance Association, 47% of trip cancellation claims were COVID-19-related in 2020.
Booking a travel experience is an investment, and you want to protect that investment by spending a little extra on travel insurance. With travel starting to hit pre-pandemic levels, there has been a 235% increase in travel insurance claims year-to-date, compared to the same period in 2019, according to Squaremouth, a travel insurance review site.
Travel insurance will not only protect you from changes and cancellations before your trip but also from any unexpected incidents that could happen during your trip. This guide will walk you through everything you need to know about travel insurance, from prices to what impacts premiums, different types of policies, and how to find a carrier.
5 Quick Statistics on Travel Insurance
- 47% of trip cancellation claims were COVID-related in 2020.¹
- $244.38 was the average travel insurance premium between July 2021 – July 2022.²
- Travel insurance will typically cost between 5% to 10% of your total trip cost.
- At age 35, the average premium for travel insurance sits at about $122.³
- Travel insurance gets more expensive with age. The average cost for a 95-year-old is $415.³
What Is Travel Insurance?
You can think of travel insurance as a version of health insurance for your booked trip. Travel insurance is insurance meant to help protect you from things that could go wrong while traveling, such as lost luggage, flight delays that lead to missed connecting flights, and even illnesses. Some policies will even cover flight accidents, rental car coverage, and more. What your travel insurance covers will depend on the type of plan you buy and how much you want to spend.
Types of Travel Insurance
Travel insurance is not a one-size-fits-all plan. There are varying levels of insurance that will depend on many different factors. The 2 main travel insurance types are Comprehensive and Travel Medical Plans.
|What Is Covered||Comprehensive||Travel Medical Plans|
|Cancellations and Interruptions||✔|
If you are traveling for a long period of time or to a place where you feel like you may need a more specialized plan, some insurers do offer plans that entail protections such as:
- Medical Evacuation: Medical evacuation insurance will cover the cost and coordination of emergency transportation to the nearest adequate treatment center if you become seriously ill or injured while traveling and require immediate care. It can also pay for you to be transported back to a hospital back in the U.S.
- Accidental Death: Accidental death travel insurance plans are very similar to life insurance policies. When purchasing an accidental death insurance plan, you would name a beneficiary at the time of purchase, and in the event of your death while traveling, that person would receive the benefit.
- Flight Accident Coverage: Flight accident insurance covers accidents that may happen when flying on a commercial flight, such as death and dismemberment.
Talk to your travel insurance provider to confirm everything you want and need is covered by the plan you chose. It is also good to confirm in the fine print what is not covered.
Hot Tip: Our introductory guide to travel insurance covers policies, common exclusions, and more so that you can get the maximum benefit from it!
How Much Does Travel Insurance Cost?
Just like car insurance and health insurance, the cost of travel insurance will vary depending on multiple factors, and in general, you can plan to spend between 5% to 10% of the total trip cost for a comprehensive policy with trip cancellation.
An AdvisorSmith study of 50+ policies in late 2021 found that the average cost of travel insurance in the U.S. was $95. The survey breaks down the average cost of travel insurance by the level of coverage your policy might fall into:
- Basic coverage — $105
- Middle-tier coverage — $130
- Comprehensive coverage — $164
However, a more recent study of Squaremouth data observed later in the pandemic indicates that policy costs are rising. The average overall cost for a travel insurance premium purchased on Squaremouth.com between July 2021 and July 2022 was $244.38.
What Factors Influence Cost?
There are 5 main factors that will determine the cost of your travel insurance policy:
- Total trip cost
- Age of travelers
- Policy type
- Length of travel
- Total coverage amounts
When looking at the cost of travel insurance by age, you can see major shifts in the pricing. According to Value Penguin, the average cost of travel insurance from ages 1 to 30 hovers around $104 to $107 for the premium, but when you start to get above the age of 30 is where you have a spike in prices. At age 35, the average premium sits at about $122, but that price drastically increases for age 95, with an average premium of $415.
How To Pick a Travel Insurance Plan
So how do you know what the right plan is for you? Picking a travel insurance plan will depend on a few different factors and what you are looking to protect, but a few tips for picking a plan are below:
- Think about your main concerns when traveling. Getting hurt, losing luggage, or missing a flight? These will all help you pick a plan that is right for you.
- Think about the financial risk of your travels. If something happened, could you cover the cost?
- Check to see if any parts of your trip are refundable.
- Take a look at what kind of coverage your credit cards offer.
- Check what kind of coverage your health insurance has for traveling.
- Get quotes from multiple travel insurance providers to find the best rates.
- Read all disclosure statements before buying a policy.
With travel back in full swing and airlines struggling to keep up with demand, make sure to protect your trip with a travel insurance plan. Whether you are planning a weekend trip out of your home state, going on a beach vacation in Mexico, or backpacking around Europe, there is a travel insurance plan that will allow you to travel stress-free.
¹ US Travel Insurance Association. (n.d.) Consumers Spend $1.72B on Travel Protection in 2020, According to New UStiA Study. https://www.ustia.org/consumers-spend-172b-on-travel-protection-in-2020-according-to-new-ustia-study.html
² Squaremouth. (n.d.) Live Travel Insurance Data. https://www.squaremouth.com/live-data?date_range=last_365_days
³ Moon, C. (2022, August 18) Average Cost of Travel Insurance: by Policy, Age and Insurer. ValuePenguin. https://www.valuepenguin.com/travel-insurance/average-cost-travel-insurance#Average-Cost-of-Travel-Insurance
Featured Image Credit: Upgraded Points
Frequently Asked Questions
With the unpredictability of travel in 2022, investing in travel insurance is worth the extra money. Travel insurance could save you hundreds or even thousands on travel-related expenses.
It is best to check with your provider on what is not covered by your plan. Typically, travel insurance plans do not cover things like a “change in mind” about traveling, lost tickets, weather that limits activities, etc.
Travel insurance will cost about 5% to 10% of your total trip cost. Price will vary depending on things like age, length of trip, and total cost of trip.
It is always best to check with your insurance provider, but most standard travel insurance plans will cover trip cancellation due to sickness. What it will not cover is the “fear” of traveling because of COVID-19.
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