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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.
Booking a travel experience is an investment; you want to protect that investment by spending a little extra on travel insurance. With travel hitting pre-pandemic levels, there was a 235% increase in travel insurance claims in 2022 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.
4 Quick Statistics on Travel Insurance
$303.58 was the average travel insurance premium between August 2022 and August 2023.¹
Travel insurance typically costs 5% to 10% of your total trip cost.
At age 35, the average premium for travel insurance sits at about $122.²
Travel insurance gets more expensive with age. The average cost for a 95-year-old is $415.²
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.
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.
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 — $93
Middle-tier coverage — $111
Comprehensive coverage — $137
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 between August 2022 and August 2023 was $303.58.
What Factors Influence Cost?
Image Credit: Upgraded Points
There are 5 main factors that will determine the cost of your travel insurance policy:
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.
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. Read our guide to find some of the cheapest travel insurance policies currently available.
References
¹ Squaremouth. (n.d.) Live Travel Insurance Data. https://www.squaremouth.com/live-data?date_range=last_365_days ² Moon, C. 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. Retrieved October 4, 2023.
Featured Image Credit: Upgraded Points
Frequently Asked Questions
Is travel insurance really worth it?
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.
What is not covered by travel insurance?
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.
How much should I plan to spend on travel insurance?
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.
Will my travel insurance cover COVID-19?
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.
Founder and CEO of Upgraded Points, Alex is a leader in the industry and has earned and redeemed millions of points and miles. He frequently discusses the award travel industry with CNBC, Fox Business, The New York Times, and more.
This bonus value is an estimated valuation calculated by UP after analyzing redemption options, transfer partners, award availability and how much UP would pay to buy these points.
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