Average Cost of Travel Insurance in December 2023 – MarketWatch

Average Cost of Travel Insurance in December 2023 – MarketWatch

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Travel insurance policies cost from $35 to $400+ depending on trip cost, duration, location, and group size.

Sarah Horvath is one of the home service industry’s most accomplished writers. Her specialties include writing about home warranties, insurance, home improvement and household finances. You can find her writing published through distributors like HouseMethod, Architectural Digest, Good Housekeeping and more. When not writing, she enjoys spending time in her home in Orlando with her fiance and parrot.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
On average, travel insurance costs 5% to 6% of your total trip cost. Destination, number of travelers and trip price are among the factors that affect coverage costs.
From unexpected cancellations of nonrefundable flights to seeking medical care in an emergency, travel insurance can provide financial protection and peace of mind. Travel insurance does not have to be prohibitively expensive — the average traveler pays between 5% and 6% of their trip cost for 100% trip cancellation coverage.
Read on to learn more about the cost of travel insurance, what influences premium rates and our top picks for travel insurance providers.
Based on our research, you can expect to pay between $35 and $200 for travel insurance depending on various factors such as your age and vacation location. An easy way to predict your travel insurance cost is to look at your trip cost — most insurance policies cost between 5% and 6% of your total trip cost.
Travel insurance provides a range of protection before and during your trip. If you must cancel your vacation for reasons stated in your policy, travel insurance will reimburse you for nonrefundable costs. If you injure yourself or must evacuate during a vacation, travel insurance can help pay for medical and escape services. Such coverage is beneficial for high-priced trips or if you are visiting a remote destination.
 
 
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The main factor that affects travel insurance costs is the total price of your trip. The more your trip costs, the more a travel insurance company will have to pay should you file a claim. For example, a policy that covers a $3,000 trip to Cancun will cost less than a $10,000 trip to Europe.
According to the U.S. Travel Insurance Association, a national organization that informs consumers and fosters fair business practices within the industry, the average cost of travel insurance ranges from 4% to 8% of your total trip cost.
The table below highlights quotes we received from different travel insurance companies for a $1,000 trip to Cancun, Mexico, for a 35-year-old male.
Why does trip cost impact the price you pay for travel insurance? As the price of your trip increases, so does the amount an insurance provider may need to pay if you suffer a covered loss.
For example, if you plan a seven-day trip to Japan, you’re likely to spend thousands on flights, accommodations and even visas to enter the country. Your insurance provider will need to reimburse you for all these costs if your flight gets delayed, you suddenly get sick or experience another covered loss.
On the other hand, if you’re planning a cheaper vacation, your plans will come at a lower cost. If you opt for a short trip to the Bahamas, it might cost $1,000 or less. Compared to the example above, a travel insurance agency will incur less of a cost if it insures 100% of your trip expenses. However, expect to pay more if you’re going to a hard-to-reach destination because it will come with higher evacuation costs.
 
 
Age is another factor that affects plan costs. Younger travelers are less likely to file a claim than older travelers since they are generally healthier and have fewer pre-existing conditions. Due to the higher chance of insurance companies paying a claim for an older traveler, plan costs generally increase with age.
The table below outlines plan costs for a series of ages. We pulled each travel insurance quote from Trawick’s Safe Travels Plan, basing them on a $1,000 trip to Cancun.
 
 
The number of travelers covered by your travel insurance policy also affects the cost. Travel insurance prices increase slightly depending on the number of people you include.
Based on the quotes our team gathered, the average cost of a travel insurance policy covering a group of four 20-year-old travelers is $82.01. The table below includes examples of travel insurance costs for multiple travelers.
Our team did some secret shopping and discovered family travel insurance policies cost an average of $90.30, which is slightly more than group policies. The table below highlights plan costs for a family of four, which consists of two 25-year-old adults and two 5-year-old children.
If you’re traveling with two or more people, you might want to search for a travel insurance provider that offers group coverage. Travelex made our list of the most affordable insurance providers and the best group insurers.
 
 
 
 
“Cancel for any reason” (CFAR) coverage is an add-on you can purchase with your travel insurance policy. Typical travel insurance includes trip cancellation, trip interruption, baggage delay, trip delay, medical evacuation and medical insurance, so long as the reason is listed in your policy. With CFAR coverage, however, you can cancel your trip for a reason not covered by your provider.
Because CFAR coverage increases the risk taken on by the insurance provider, it significantly increases the price you’ll pay for coverage. If you opt for the CFAR add-on, expect to pay between 40% and 60% more for your insurance premium.
This pricing varies by insurance provider, with some insurers charging more as the date of your trip approaches. For example, we requested a quote from Travelex with and without the CFAR add-on. We received a price quote for $108 without the CFAR add-on and $202 with the CFAR option, representing an 87% increase in price. If you do plan to buy CFAR add-on insurance, get a quote from multiple providers to be sure you’re not overpaying.
CFAR coverage typically reimburses 50% to 75% of your prepaid trip costs. Note that many companies reserve CFAR coverage for their more comprehensive plans. The table below outlines the cost difference between policies with CFAR coverage and those without.
Our top travel insurance providers for CFAR coverage are Travelex, Faye and Nationwide. Each provider allows you to add up to 75% CFAR coverage to your trip. We recommend getting an estimate from each provider to ensure the best possible pricing on this often-expensive add-on.
 
 
The type of coverage you select plays a role in your policy cost. Basic trip insurance that does not include medical expenses will cost less than a comprehensive policy with emergency evacuation and medical coverage.
In addition, purchasing coverage add-ons such as pre-existing condition waivers and rental car insurance increases policy costs. Due to the many options and variables, it’s best to consider your travel needs and budget when choosing your travel insurance.
The table below highlights the cost difference between basic and comprehensive travel insurance coverage.
An important note to keep in mind is that every travel insurance provider sets its own coverages and protections included when you buy a plan. Unlike health insurance or auto insurance, there is no defined set of coverages that all travel insurance providers must offer. Be sure to read the fine print and examine the exact coverage levels included with each plan before you choose one. In other words, don’t only look at the premium price in isolation.
 
 
Each travel insurance provider uses its own formula and underwriting process to price its travel insurance policies. Primary factors that influence the price you’ll pay for coverage include:
 
 
Your individual travel needs are unique. To ensure you select the best travel insurance policy, there are several factors you should consider. These include:
 
 
Travel insurance can provide peace of mind when planning a vacation. But some travelers still ask if the insurance is worth the price. Travel insurance costs about 6% of the total cost of your trip, meaning you could pay as little as $75 to fully protect a $1,500 vacation. We recommend getting a quote from multiple travel insurance providers before booking to ensure you’re not overpaying for coverage.
 
 
Yes, many travel insurance policies consider COVID-19 a covered reason for trip cancellation or delay. Note that providers cover trip interruptions and cancellations caused by the COVID-19 pandemic on the condition that you were healthy when you purchased the policy.
Cancel for any reason (CFAR) coverage allows you to cancel your trip even for reasons not listed in your insurance provider’s policy. If you are worried about illness or general travel or wish to have the flexibility of canceling, CFAR coverage may be worthwhile. Note that this add-on reimburses up to 75% of your trip costs, not the entire amount.
You can expect to pay $35 to $200 per trip, depending on the total trip cost and your age, among other factors. Based on quotes we pulled from five popular providers, the average cost of travel insurance for a $1,000 trip to Cancun, Mexico, for a 35-year-old male is $45.
Yes, trip cancellation coverage may cover 100% of your costs if you cancel your trip for a covered reason, such as illness, a family emergency or military deployment. If you purchased CFAR coverage, you can cancel for any reason but will only recoup around 50% to 75% of trip expenses.
In our review, we found that Travelex’s Basic policies were some of the most affordable on the market. Other affordable travel insurance providers include Nationwide and Faye, which specialize in streamlined online applications and issuance. We recommend getting a quote from each of our recommended providers before buying coverage to ensure you’re getting the best rates.
 
 
 
 
Sarah Horvath is one of the home service industry’s most accomplished writers. Her specialties include writing about home warranties, insurance, home improvement and household finances. You can find her writing published through distributors like HouseMethod, Architectural Digest, Good Housekeeping and more. When not writing, she enjoys spending time in her home in Orlando with her fiance and parrot.
Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
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