Picture this: You’ve spent months planning the perfect Caribbean getaway. You’ve plotted your itinerary and booked your flights, hotels and excursions along every stop. When it comes to packing, you’ve made thorough lists and checked off every item. Two weeks before your departure you realize that for all your meticulous planning, there’s one thing you forgot: Travel insurance.
So, you hop online, search for ‘cheap travel insurance’ and select the first inexpensive travel insurance plan that pops up, thinking that it will be enough coverage. For the first few days, your trip in the Bahamas is magical – the sun, the food, the no-stress vibe.
But then, one day you’re walking along the Port Lucaya Marketplace breezily, taking in the sights and smells, and boom! You trip and fall. Your arm breaks, requiring transport to the nearest hospital, a round of X-rays, a consultation, a cast, and a prescription for painkillers. As the bills pile up, you contact your insurance company and learn that most, if not all, of the incurred expenses will be your responsibility.
You learn the hard way that opting for cheap insurance for travel is no substitute for more comprehensive coverage.
How Much Does Travel Insurance Cost?
There are two types of travel insurance coverage: travel medical insurance and trip insurance. Travel medical insurance is available to American citizens and residents traveling abroad, as well as foreigners traveling internationally. This coverage allows you to get urgent medical care in your destination country without breaking the bank. Trip insurance, on the other hand, is only available to U.S. residents traveling domestically or internationally, as well as non-U.S. citizens traveling to the United States.
While trip insurance will offer policyholders limited medical coverage, its main function is to ensure financial protection for costs related to flight cancellations, missed connections, delays, or baggage issues. How much a policy costs depends on what type of travel insurance you buy.
Travel medical insurance is typically more expensive, costing between $200 – $300 per person on average. The price of travel medical insurance is typically in this range if you want to select high coverage limits or an option with little to no deductible. Meanwhile, the average cost of trip insurance falls between $100 to $200 for each traveler.
What Does Basic Travel Insurance Cover?
So, what do you get with very basic travel insurance? Though plans vary wildly and we recommend that you read the policy documents carefully before making a purchase, we can offer some guidance on this.
Travel Medical Insurance Coverage Details
For travel medical insurance, the answer is fairly straightforward. Typically, if you opt for inexpensive travel insurance, you’ll still have coverage with the same benefits as more expensive plans. However, if you opt for a higher premium, you’ll get a higher policy maximum. This means that the more you pay for travel medical insurance, the more the insurer will cover.
For example, emergency medical evacuation involves removing an injured person from an isolated area and transporting them to the nearest medical facility. This procedure alone can cost tens of thousands of dollars. When you have travel medical insurance with a less expensive policy, the insurer may cover up to $25,000, whereas, an insurer of a more expensive policy may cover $100,000.
Trip Insurance Coverage Details
With trip insurance, it’s a little more complicated. In general, regardless of price, basic trip insurance policies offer coverage for expenses related to flight disruptions like delays, cancellations, missed connections and baggage issues. Your standard trip insurance policy will also allow you to cancel your travel plans and receive reimbursement for covered reasons like inclement weather, sickness or death of a loved one.
The difference between buying the cheapest trip insurance plan and spending a little more comes down to the amount of coverage. As the premium cost rises so does the coverage amount.
The Benefits of Spending a Little Extra on Travel Insurance
Before you buy cheap travel insurance, you’ll want to consider the advantages that come from paying a bit more for your premium. While you can always keep your policy premium on the cheaper side, there are a number of reasons you might want to spend a little bit more.
Even the best cheap travel insurance plan you find won’t usually offer the following perks.
Travel Medical Insurance Benefits
Paying a higher premium for travel medical insurance in the form of a comprehensive plan as opposed to a limited benefit plan can be a literal life-saver. You’ll get more comprehensive coverage that may include the following:
- Coverage for pre-existing conditions including visitors to the U.S.
- Higher policy maximums
- Some trip-related coverage (for costs related to cancellations, delays, missed connections and baggage loss)
- Guaranteed access to PPO Networks
- Co-insurance system (rather than pre-defined per incident dollar amounts)
Imagine you are a senior traveling to Germany. You have had pneumonia in the past 5 months, but you are fully healed and ready to travel. While you are traveling, you suddenly develop pneumonia symptoms again, requiring you to go to the hospital.
Luckily, travel medical insurance can help you in this case with the help of pre-existing medical condition coverage, and by making sure you get a higher policy maximum to help out with the high cost of German healthcare.
Trip Insurance Benefits
Depending on your needs and wants, paying more for a trip insurance plan that includes the types of benefits you desire can be beneficial. These perks could include:
- Greater per incident coverage
- Cancel For Any Reason (optional coverage that allows you to cancel your trip for any reason and still recoup certain prepaid expenses)
- Interruption For Any Reason (coverage that allows you to cut your trip short for any reason and still recoup certain unused prepaid expenses)
- Adventure sports riders (coverage for higher-risk activities, like whitewater rafting and scuba diving, that aren’t typically covered by basic trip insurance)
Now, let’s imagine you caught a cold just three days before your trip. It is too late to see the doctor for you at this time, and you don’t want to spend a significant amount just to get a doctor’s note. Trip insurance with Cancel For Any Reason coverage can help you cancel in this case, and still allows you to recoup about 50% to 75% of your prepaid, nonrefundable trip expenses.
Should I Buy Inexpensive Travel Insurance?
Is purchasing a cheaper travel insurance policy with less coverage truly affordable? The answer depends on a few factors, such as the traveler’s health, age, and intended activities.
When it comes to travel medical insurance, if you’re young, in good health, don’t have any pre-existing conditions, and aren’t planning on engaging in adventure sports or any other high-risk activities, you may be able to get by with a limited coverage option.
A basic trip insurance policy might serve you well if your trip plans are fairly simple and firmly in place, your trip is on the shorter side and you’re traveling light.
But one thing to remember is that it’s always better to have the proper coverage and not need it then it is to need the coverage and not have it. Even if you don’t end up using your travel insurance coverage, it can still give you the peace of mind you need to relax and enjoy your trip.
Now, picture this: Before your Caribbean getaway, you research your travel insurance options, take your time deciding, and, after reading the policy documentation, you decide to spend a little extra to get the coverage you need. Your trip doesn’t go quite as planned and you end up losing your luggage or needing medical attention. Luckily, by investing in the right policy, you’re able to get all the help you need and you’re back on the beach in no time.
Ready to Find the Best Travel Insurance for Your Needs?
Whether you’re ready to buy travel insurance, or just have a couple questions, VisitorsCoverage’s award-winning team of licensed travel insurance experts is happy to help.
Frequently Asked Questions (FAQs)
Are there ever discounts on travel insurance?
Not quite. Travel insurance is standardized and highly regulated by law, meaning all insurance plans have to meet the same standards and be the same price regardless of who, when, or where you buy it from. Therefore, there aren’t any sales or fluctuations in prices. Travel insurance premiums are primarily calculated based on trip cost, traveler age, trip length, and the coverage options selected.
On the flip side, one way to “save” on your insurance is to book your trip and your insurance early. When you book your trip earlier, you get the opportunity to score early-bird travel deals. If your trip costs less, then it costs less to cover it.
Can I insure just a portion of my trip?
Yes, you can insure any expenses you wish to protect on your policy. All you need to do is enter specifically the amount you want coverage for on an online quote tool. For example, if your hotel costs $1,000 and your flight costs $400, and your primary concern is the cost of your hotel, you can just enter $1,000 in the cost that the quote tool will ask for. From there, the insurance options you will get will be specialized to a $1,000 coverage protection.
However, there are certain plans and companies that require you to disclose the full cost of your trip, so it’s good to glance at your policy details or call your insurance company to understand what their requirements are.
Does adding Cancel For Any Reason insurance make my trip insurance policy much more expensive?
Cancel For Any Reason coverage costs about 40% to 50% of your base trip insurance cost. For example, if your trip insurance costs $100 and you want to add CFAR coverage, it would typically increase to $140-$150. While this may be an additional investment, it gives travelers peace of mind knowing they can cancel for any reason that is not covered by standard trip insurance.
Is insurance for international trips more expensive than domestic trips?
Not really. The cost of your travel insurance is dictated by what it has to cover. If your trip costs more or you choose higher coverage limits, then your plan will reflect that. Since international trips tend to cost more and require higher coverage, your travel insurance can cost more. But, ultimately, the destination itself is not what directly affects the cost of a travel insurance plan.
Is credit card travel coverage enough so I don’t have to buy separate travel insurance?
While many credit card companies provide some kind of trip protection, it is often limited when compared to standard travel insurance. For the modest cost of adding travel insurance, you get access to higher medical coverage limits, optional coverage for adventure activities and sports equipment, and trip cancellation coverage for a much wider range of scenarios beyond the standard reasons.
Can I get travel insurance coverage if I paid for my flight in miles or points?
Reward points or frequent flier miles are typically considered to be refundable and should not be included in your trip costs. If there are any rebooking fees or taxes related to your flight, it could be added into your trip cost for a potential reimbursement from your trip insurance plan. However, most airlines can reimburse your points or miles back in credit, but typically do not provide cash reimbursement. It is important to check with your airline whether bookings made with miles or points will be refunded in the face of a cancellation.
Are kids insured for free under a travel insurance plan?
Typically, kids under the age of 17 can be added to a travel insurance plan for no additional cost as long as an adult is also on the policy. Adding a kid to your policy plan can provide coverage in case of an unexpected illness or injury that happens to them while traveling.
How can I get the most accurate quote for my trip?
To get a precise quote for your trip, you should use an online quote tool. Be ready to enter your total non-refundable trip cost, your age, and your trip dates. This will allow the tool to provide a more personalized premium estimate based on your specific details.
