How Much Does Trip Insurance Cost?
As part of the trip-planning process, a lot of American travelers are thinking about trip insurance. While people may know that trip insurance can offer financial protections should they need to cancel trip plans, there’s one thing that still mystifies even the savviest traveler: the cost of trip insurance.
A lot of people worry about how much trip insurance costs. But the cost is fairly low, usually ranging between $110 - $200. When you look at the total cost of all these prepaid expenses, paying a small fee up front can save you a lot of money if your plans are disrupted.
How Much Does Basic Trip Insurance Cost?
The short answer is that the cost is based on three factors: Trip Cost, Age, and Duration.
For the right trip insurance for your needs, providing a dollar amount for your travels and expenses, including any costs that you have already paid and are nonrefundable should you need to cancel or delay your trip is important.
To calculate the cost of your travels for insurance purposes, add up all of your non-refundable, prepaid costs including any of the following:
- Safe Travels USA
- Hotel bookings
- Vacation home rental costs
- Excursion prices
- Train tickets
- Boat reservations
- Rental car deposits
- RV Rentals
- Tickets to concerts, museums, amusement parks, etc.
Once you add up these costs, you'll have a better idea of what type of trip insurance plan is best for maximum coverage. To receive benefits, you should insure 100% of prepaid trip costs that are subject to cancellation penalties or restrictions. Usually trip insurance costs on average 10% of the total trip cost.
Trip Insurance for International Travel
Trip insurance becomes even more important for American citizens considering international travel. Your domestic health insurance won’t cover you while you’re abroad. In fact, in light of the pandemic, many countries have made travel medical insurance a requirement for entry.
Even if your destination country doesn't require travel insurance, it's still strongly recommended. If you sustain an injury or contract an illness like Covid while abroad, you and your loved ones (and your bank account!) will be glad you paid a little extra for travel medical insurance.
If you are a US resident or traveling from the US and returning to the US, trip insurance may be an option to consider. Comparing plans to meet your needs, or consulting with a licensed insurance representative can help answer those questions.
What are IFAR & CFAR and How Much Do They Cost?
If you need the flexibility to cancel or interrupt your trip for any reason at all, Interruption For Any Reason (IFAR) and Cancel For Any Reason (CFAR), can help. The benefit allows a policyholder to cancel their trip for any reason and still receive some type of reimbursement, usually up to 75% of the cost. These are two of the most popular add-on benefits to traditional trip insurance. The advantages of these two options are pretty self-explanatory. IFAR allows you to interrupt your trip plans for literally any reason, and CFAR allows you to cancel your plans for literally any reason.
Maybe you're vacationing in Hawaii and a family emergency back home comes up. If you buy IFAR insurance with your basic trip insurance, you can cut your vacation short and still recoup certain financial losses from any unused days, event tickets, or excursions.
Or maybe you book your trip in advance and as the departure date rolls around, you just no longer feel up to going. With Cancel For Any Reason coverage, you can cancel your trip ahead of time and recoup certain prepaid trip expenses.
But how much do these benefits cost? Typically CFAR and IFAR is usually 50% more than the base coverage chosen. That means that if your basic trip insurance policy costs $100.00, the flexibility and security that CFAR and IFAR can give you will cost about $150.00.
It's much better to have travel insurance and not need it, than to need it and not have it. Paying a little extra up front for good quality coverage can give you peace of mind, which is essential for any great vacation.
Trip Insurance & Frequent Flyer Miles
Some trip insurance policies offer travelers limited coverage for the cost of the airline fees to re-bank frequent flyer miles.
How to Calculate Trip Cost for Insurance
If you have to cancel or change your plans due to a flight disruptions, a third party like the airline or hotelier will cover your refundable costs. Trip insurance is designed specifically to protect your nonrefundable expenses. When you purchase trip insurance, you’ll be asked to total up these prepaid expenses. The total will be the trip cost. Up until you depart on your travels, you can always make adjustments to this number as you incur additional prepaid, nonrefundable expenses. Trip insurance will usually reimburse about 75% of this number.
How it works
Let's take a look at a real-world scenario. Say Matt has been saving up to take a trip to Turkey. Here's a breakdown of his expenses:
- Airfare = $1000
- Hotel = $800 ($200 of which is refundable if he needs to cancel)
- Concert tickets = $100
- Day Cruise Excursion = $200
What items should you insure?
Only prepaid expenses and certain valuables are eligible. In general, you’ll want to insure things like airfare, cruise tickets, hotel or lodging accommodations, entertainment and excursions, vacation rentals, car rentals, certain valuables like engagement rings or other similar items.