When people are weighing whether or not to get trip insurance, they usually want to know two things: how much they'll pay for coverage, and whether that cost is worth it. But what if we told you that the cost of travel insurance is a small, manageable fraction of your total trip cost? Many times, travelers end up getting a good trip insurance policy for $110 - $200.
Let's break down how the cost of your trip insurance is usually calculated.
Factors that Determine the Cost of Travel Insurance
The cost of a travel insurance plan isn't a one-size-fits-all number. It's calculated based on several key factors that help insurers understand the unique risks of your trip. Understanding these factors can help you better estimate your premium and find a plan that fits your needs.
Here's a detailed breakdown of factors that affect the cost of travel insurance.
1. Cost of Your Trip
Trip insurance is designed to cover your prepaid, non-refundable costs. Since the company you booked your refundable costs with will cover the cost in the case of something going wrong, trip insurance covers the rest.
When calculating your trip cost for insurance purposes, include only prepaid, non-refundable elements, such as:
- Airfare and other transportation tickets (if non-refundable)
- Hotel deposits and prepaid accommodations
- Cruise packages and tours
- Prepaid excursions and activities
- Event tickets (concerts, shows, sporting events, etc.)
For example, if your hotel offers free cancellation up until your arrival date, you wouldn't include that cost in your trip insurance calculation. The higher your non-refundable expenses, the more coverage you'll need, which directly increases your premium.
2. Traveler's Age
Age is considered when determining travel insurance premiums, reflecting the different needs travelers have at various life stages. As you get older, premiums tend to rise, but so does the potential value of the coverage. Older travelers face higher risks of medical emergencies abroad, so the medical coverage travel insurance provides can prove essential. In these cases, even though the upfront cost is higher, the protection it provides against potentially overwhelming medical bills makes it a worthwhile investment.
3. Trip Duration
The length of your journey directly affects your insurance costs. Longer trips usually cost more to insure than shorter ones, as there's a greater window for something unexpected to happen. A two-week international vacation will typically have a higher premium than a weekend getaway, even if other factors remain the same.
4. Destination Country
Your destination can influence costs, since international travel often requires more comprehensive medical coverage. As a U.S.-based resident, traveling domestically, your insurance needs (and therefore costs) will be different than those if you are traveling internationally.
5. Number of Travelers
The number of individuals included in your travel insurance plan significantly impacts the overall cost. More travelers mean higher potential trip costs and an increased number of "items" the insurance needs to cover, such as plane tickets, lost luggage, stolen passports, and hotel fees for each person. A solo traveler's insurance only needs to cover them and their individual costs, whereas a family plan will need to provide coverage for each person traveling, leading to a higher premium.
6. Add-ons such as CFAR & IFAR
Do you need the ultimate flexibility to cancel or interrupt your trip for any reason? Though adding optional benefits such as Cancel For Any Reason (CFAR) or Interrupt For Any Reason (IFAR) provides you with greater flexibility, they do increase the overall premium.
The Average Cost of Travel Insurance
Let's look at a family trip example, since that's often how people plan and budget. Generally, travel insurance costs about 4% to 10% of your total prepaid, non-refundable trip expenses, though the final price depends on specific factors. For example, for a $5,000 trip, you can expect to pay anywhere from $200 to $500 for a policy.
That being said, let's take a look at how the various factors can determine your insurance price:
Average Cost for a Domestic Trip
Let's imagine a family of four is planning a week-long trip to Disney World.
- Airfare: $1,200 (non-refundable)
- Hotel: $1,000 (refundable)
- Park Tickets: $800 (non-refundable)
- Rental Car: $300 (refundable)
Total Trip Cost: $3,300; Total Non-Refundable Trip Cost: $2,000
Your insurance provider doesn't know what is refundable or non-refundable, so they won't be able to correct you if you enter the total amount instead of the total non-refundable amount; they only know what you tell them. So make sure you pay attention to which amount you enter, or you might end up paying a higher price for your insurance than necessary.
So, the final premium amount will be calculated on the non-refundable part of the total trip cost, a percentage of $2,000. This helps keep your premium based only on what truly needs protecting.
So, just as an estimate, if their plan costs 6%, the cost of insurance to cover $2,000 is only $120.
Average Cost for an International Trip
International travel insurance typically costs closer to 5-12% of your total trip expenses. This slightly higher percentage compared to domestic trips primarily reflects the larger financial investment typically associated with international travel. For instance, an international vacation often involves higher non-refundable expenses:
- Long-haul international flights typically cost more than domestic flights
- International accommodations often require larger deposits
- Prepaid tours, excursions, and activities abroad can be substantial
- International trips tend to be longer in duration
For example, a two-week European vacation with $7,000 in non-refundable expenses might cost between $350-$840 to insure. This represents the same percentage calculation as domestic travel, applied to the higher total trip cost that's typical of international journeys.
Cost of Cancel For Any Reason (CFAR) and Interrupt For Any Reason (IFAR)
Some travelers prefer extra peace of mind with CFAR or IFAR, since these add-ons give you the freedom to cancel or cut short a trip even for reasons a standard plan may not cover. As even the best-laid plans go awry, you need the flexibility to change them for reasons that a standard policy won't cover. That's where CFAR and IFAR come in.
What Are CFAR And IFAR?
- Cancel For Any Reason (CFAR): This benefit allows you to cancel your trip for literally any reason, even if it's just a change of heart, up to as little as two days before your trip, and get reimbursed as much as 75% of your non-refundable costs, with no explanations or hassle for you.
- Interrupt For Any Reason (IFAR): Similar to CFAR, this add-on gives you the flexibility to cut your trip short for any reason and be reimbursed for a portion of your lost, non-refundable expenses.
How Much More Does CFAR Cost?
Adding CFAR or IFAR offers valuable flexibility to your plans, but it does come at an extra cost. For example, if your standard travel insurance policy costs $100, adding CFAR could bring your total premium to somewhere between $140 and $160.
Is CFAR Worth the Extra Cost?
The value of CFAR is entirely personal, but its unmatched advantages make it a worthwhile investment for many travelers, especially when considering the alternative of losing all non-refundable costs. While it may raise the premium, the peace of mind and flexibility it offers are significant benefits.
Why CFAR is Worth It:
- Get more money back: Unlike standard insurance plans, CFAR allows you to cancel your trip for any reason whatsoever. This means you'll recoup 50% - 70% of your non-refundable costs, a portion you wouldn't see otherwise.
- Hassle-free cancellations: When you cancel with CFAR, you avoid the tedious process of contacting multiple hotels, airlines, and other vendors to try and recover your money. Simply notify your insurance provider that you wish to cancel, and they will handle the reimbursement process for you.
- Take advantage of early booking deals: Many travelers delay booking to account for potential changes in their schedule, often missing out on early bird discounts and paying more for their trips. With CFAR, you can confidently book early, secure better deals, and still have the option to cancel if unforeseen circumstances arise. Booking early also means your trip, trip insurance, and your CFAR costs significantly cheaper than if you had booked your trip for more by waiting to see plans free up.
- Eliminate proof and claim worries: You can cancel your plans without the stress of proving your reason for cancellation or worrying about whether it aligns with standard trip insurance covered reasons. CFAR simplifies the process, eliminating the need to file a traditional claim for cancellation.
- Unparalleled protection: Especially when booking far in advance or traveling during uncertain times, CFAR offers unparalleled security, knowing your significant investment is protected regardless of what comes up.
How to Calculate Your Trip Insurance Cost
So far, we've been dealing in hypotheticals. But what about your trip insurance's cost?
You can calculate your trip insurance cost with just a few steps and arrive at a close estimate. Here's a simple, three-step guide to get you started:
- Step 1: List all non-refundable, prepaid expenses: Create a list and add up every non-refundable dollar you've spent on airfare, hotels, tours, and more. This is the total trip cost you need to protect.
- Step 2: Get quotes on VisitorsCoverage: By entering your total trip cost, age, and destination on our platform, you can get an instant estimate for multiple plans.
- Step 3: Compare plans and coverage: Compare and contrast top plans to get an idea of what each plan covers, the amount of coverage it provides, the policy maximums, eligibility criteria, among other factors. That way you can decide which plan is the best for you.
Is Travel Insurance Worth the Cost?
When evaluating travel insurance, consider both the financial and practical aspects. While premiums add to your travel budget, they typically represent just a small percentage of your overall trip investment. For international trips especially, the potential costs of medical emergencies or major trip disruptions far outweigh the premium you'll pay.
Beyond the major expenses, travel insurance also covers many unexpected situations that travelers often don't consider, such as stolen passports, lost luggage, and emergency medical transportation. Dealing with these hassles yourself while abroad can be incredibly stressful and costly. For instance, if you require medical attention during your international trip and wish to receive treatment back home, without travel insurance, you'd not only face thousands of dollars in expenses to get back home but also the burden of making all the arrangements and calls yourself. With travel insurance, you're relieved of payment worries, and a quick call to your provider will have the arrangements made for you, allowing you to focus on your well-being.
Furthermore, travel insurance can cover more than you might expect. For example, if your bags are delayed, your insurance can cover any costs the airline/airport might charge for delivery or recovery. It also covers the cost of repurchasing necessities like clothes and toiletries (up to a specified limit, detailed in your insurance plan) while you're waiting for your bags. Many travelers only realize the importance of these benefits when faced with such mishaps.
Thoroughly weighing your options right now can save you significant stress and expense later.
We're Here To Help
Trip insurance costs only a fraction of your total trip price but can protect your financial investment and give you peace of mind. The key is to insure only what you need, compare multiple plans, and weigh whether add-ons like CFAR fit your travel style.
If at any point in your decision making process, you are unsure, feel free to reach out to our team of licensed agents who are happy to help you with every query you may have pertaining to insurance.
Frequently Asked Questions About the Cost of Trip Insurance
How much does traveler's insurance usually cost?
The average trip insurance can cost around 4% to 10% of your total prepaid, non-refundable trip costs. The exact price is determined by several factors, including the total amount you're insuring, your age, the duration of your trip, your destination, and any add-ons, like CFAR.
How much would a $5,000 trip insurance policy cost?
For a trip costing $5,000, you can estimate your insurance premium to be between $200 and $500, applying the 4% to 10% rule. This range can change depending on your personal details and the specific benefits included in your policy.
Is travel insurance more expensive for international trips?
Yes, travel insurance for international travel is often slightly more expensive than for domestic trips. This is primarily because international policies often need to include more robust travel medical and emergency medical evacuation coverage, as your domestic health insurance may not cover you abroad.
Can I get a refund on travel insurance if I cancel my trip?
Most travel insurance companies offer a "free look" period (typically 10-14 days from purchase) during which you can cancel your policy for a full refund if you haven't started your trip or filed a claim. After this period, refund policies vary by provider, with some offering prorated refunds if your trip is canceled.
How much more does "Cancel For Any Reason" (CFAR) coverage cost?
CFAR typically adds around 30-40% to your premium. For example, a standard policy that was $100 could be $130 - $140 with CFAR added on, while allowing you to recoup up to 75% of your non-refundable trip costs for cancellations for any reason. So it's important to weigh whether the added flexibility fits your budget.
Is annual travel insurance cheaper than single-trip policies?
Annual travel insurance becomes more economical if you take three or more trips per year. A typical annual policy costs $200-$600 depending on coverage levels and your age, whereas individual policies might cost $100-$200 per trip. For frequent travelers, annual policies offer significant savings and convenience.
How much does family travel insurance cost compared to individual policies?
Putting all of your family members under one trip insurance policy costs significantly less than purchasing individual policies for each family member. For example, for a family of four taking a $6,000 vacation, a family policy might cost $350-$550 total, whereas individual policies might total $200-$300 each. Family plans usually cover children under 18 at minimal or no additional cost.
How can I get the most accurate quote for my trip?
To get a precise quote, you should use an online quote tool. Be prepared to enter your total non-refundable trip cost, your age, and your trip dates. This will allow the tool to provide a personalized premium estimate based on your specific details.
Does my credit card offer travel insurance, and is it enough?
Some credit cards offer limited travel insurance benefits, such as basic trip delay or rental car coverage. However, coverage limits are often significantly lower than standalone policies, and card-based insurance typically provides extremely limited or no medical coverage. It's crucial to review your credit card's terms to see what is (and isn't) covered.
