Travel insurance provides a variety of reimbursements for travel incidents and can repay you for costs that you\u2019ve incurred. But how much is travel insurance? And how much can it cover your upfront travel expenses, like flights and hotels?<\/p>
If you are planning on traveling anytime soon or you\u2019re knee-deep in hotel reservations, flight tickets and tour bookings, you may be experiencing a little sticker shock at the amount of money you\u2019ve been spending. While vacations can be exciting, they can also be expensive. <\/p>
And if something goes awry, you may not be able to get your money back.<\/p>
Travel insurance helps cover financial losses associated with surprise circumstances that could ruin a trip, including illness, injury, accidents, flight or other transportation delays, and other issues. This insurance costs 4%-10% of a trip’s price. <\/p>
This means that, for a $10,000 trip, trip insurance could cost between $400 and $1,000.<\/p>
Premiums \u2014 or the price you pay for coverage \u2014 are based on the coverage type, your age, destination, trip cost, and more. Specialized policy riders focus on the needs of business travelers, athletes, and\u00a0expatriates.<\/p>
Travel insurance may be sold online by travel agents, travel suppliers (airlines, cruise lines), private insurance companies, or insurance brokers when booking your flight, car or accommodations. Typically, you’ll purchase coverage shortly after initial bookings for lodging, flights or other transportation, activities, and rental cars. Some policies may require you to do so to retain full coverage. <\/p>
Here are some terms to know for travel insurance.<\/p>
If you buy travel insurance, you may have\u00a0concurrent insurance coverage, meaning you’re covered under more than one policy. When the travel coverage is primary, the travel insurance reimburses you first without needing to make a claim through another company\u2014and sparing you potentially increased policy rates. <\/p>
If the travel insurance coverage is secondary, you’ll first need to attempt to file a claim with other coverage, such as an airline (lost baggage) or your own auto insurance (damaged car).<\/p>
There are usually stipulations spelled out on how you qualify for coverage. Your claim must fall under the types of coverage offered. For example, lost baggage insurance might include coverage for personal items, prescriptions, credit cards, and your passport or visa. <\/p>
Also, you may need to take extra steps to qualify for coverage, such as reporting the loss or theft to the police.<\/p>
This is the maximum amount you can receive for the claim. For example, you might only receive $500 per bag. You may not even receive more for expensive items such as jewelry or electronic devices. You might need to provide receipts for items over a certain amount. Without receipts, the insurer may only pay for repairs.<\/p>
Some coverage might require you to pay a deductible, or flat amount, before covering the remainder of your claim up to the limit.<\/p>
These are the conditions under which your coverage will not cover the loss. Each policy differs. For example, your baggage damage coverage may not cover losses caused by animals. It may exclude coverage of bicycles, hearing aids or other medical devices, keys and tickets, or seizure by a government or customs official.<\/p>
Pre-existing conditions may not be covered by travel medical insurance, or may only be covered if you buy a travel insurance plan within 1-2 weeks of booking your trip.<\/p>
In addition to the cost of travel insurance, we also need to talk about the different types of travel insurance. This is because the price you\u2019ll pay will depend on the insurance you choose. Some policies \u2014 like those that allow you to cancel for any reason \u2014 can be more expensive than other, more limited, policies.<\/p>
Common types of travel insurance include:<\/p>
Different types of insurance will cover various things. Trip cancellation insurance, for example, will allow you to recoup a portion of nonrefundable costs when you\u2019re forced to cancel your trip for a covered reason.<\/p>
The cost of your trip is a primary rating factor for\u00a0travel insurance companies. The more you spend on your trip, the higher the potential claim payout is for the travel insurance company.<\/p>
Forbes Advisor analyzed travel insurance plans at various price points for a 30-year-old female traveling from California to Mexico for a 14-day trip. The analysis of trips costing $1,000 to $50,000 found that the average travel insurance cost is usually 5% to 6% of the trip cost, with 6% the average.<\/p>