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Are you planning on traveling anytime soon? If you’re knee-deep in hotel reservations, flight tickets and tour bookings, you may be experiencing a little sticker shock at the amount of money you’ve been spending. While vacations can be exciting, they can also be expensive — and if something goes awry, you may not be able to get your money back.
However, there are ways to mitigate losses in the event things don’t go according to plan. Travel insurance provides a variety of reimbursements for travel incidents and can repay you for costs that you’ve incurred. But how much is travel insurance? And how much can it cover on your upfront travel expenses, like flights and hotels?
The short answer to “How much does travel insurance cost?” is that it’s a percentage of your overall trip cost that also factors in the level of coverage. And it varies across providers. On the high end, you can estimate a typical travel insurance price to be 10% of your total trip cost. For a trip that costs $5,000, expect to pay $500 or less for coverage.
Let’s take a look at the different types of travel insurance, factors that influence its cost and the average cost of travel insurance.
Factors that affect travel insurance cost
There are many factors that will influence the cost for travel insurance. Examples include:
Type and extent of coverage.
The length of your trip.
The age of the policyholder.
Total trip cost.
Let’s say that you chose to purchase an insurance policy to cover any health care expenses you incur while traveling. This will reimburse you in the event you need to see a doctor, require hospitalization or have a variety of needs related to health care.
However, let’s say that you also chose to insure some of your trip costs; this means that, if need be, the policy will reimburse you for nonrefundable trip costs in case of a covered event. This will drive up the price of your policy overall.
Another factor that will affect the cost of your travel insurance is the coverage limits of your policy. These limits dictate how much you’ll be reimbursed in the event you need to use your insurance; the higher the amount, the more expensive your insurance.
» Learn more: The best travel insurance companies
Average cost of travel insurance
According to the U.S. Travel Insurance Association, a national association of insurance carriers, the amount you can expect to pay for travel insurance will vary between 4% to 8% of your overall trip. If your vacation was $1,000, you’d be looking at somewhere between $40 and $80 for insurance.
Of course, as we described above, the type of coverage you choose can greatly affect the cost of your insurance.
In 2020, the average cost for a policy from insurance aggregator Squaremouth (a NerdWallet partner) was $271. Policies that included insurance covering the nonrefundable trip costs averaged $309. Those that opted not to insure those nonrefundable costs, however, paid an average of $82.
» Learn more: What does travel insurance cover?
Example costs of travel insurance
Here are some sample costs of travel insurance for a seven-day trip in the United States for two travelers ages 34 and 36. Full trip costs are estimated to be $2,000, and trip bookings have yet to be paid in full.
Policies include trip interruption coverage, travel delay coverage (up to $500) and emergency medical coverage.
Types of travel insurance
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’ll pay will depend on the insurance you choose. Some policies — like those that allow you to cancel for any reason — can be more expensive than other, more limited, policies.
Common types of travel insurance include:
Lost luggage insurance.
Accidental death insurance.
Emergency evacuation insurance.
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’re forced to cancel your trip for a covered reason.
How to buy travel insurance
It’s simple to purchase travel insurance; you’ve probably seen dozens of ads for insurance whenever booking a flight or rental car.
However, it’s a better idea to get multiple quotes for policies. Insurance policy aggregators, such as Squaremouth, allow you to search a variety of different providers at once. You can then compare the coverage and price of each policy before choosing one that suits your needs.
» Learn more: What to know before buying travel insurance
Credit cards that offer complimentary travel insurance
If you’re looking into purchasing travel insurance, you may want to check which credit card you’re using to book your trip. Many of today’s popular travel credit cards offer complimentary travel insurance.
Cards such as the Chase Sapphire Preferred® Card offer primary rental car insurance; this means that the card will pay for any covered damage so that it doesn’t pass on to your personal insurance policy.
The types of insurance and total coverage vary according to the card, so you’ll want to check your individual policies. Common coverage includes trip delay insurance, lost luggage insurance, rental car insurance and emergency medical insurance.
Popular cards that provide these types of coverage include:
In order to qualify for coverage, you’ll want to use your card to pay for any trip costs, including your airfare, lodging and rental cars.
The amount you’ll be reimbursed varies widely depending on which card you hold. For instance, the Chase Sapphire Preferred® Card provides coverage for up to $10,000 per person and $20,000 per trip for prepaid, nonrefundable travel expenses for covered trip cancellations. These include airfare, accommodations and even tours.
The United℠ Explorer Card, meanwhile, offers far less coverage at just $1,500 per person and $6,000 per trip. Of course, your trip will need to fall under covered circumstances, including sickness and severe weather.
» Learn more: Does my Chase credit card have travel insurance?
If you’re comparing travel insurance costs
It can make sense to purchase travel insurance, especially if you’re unsure about your vacation or worried about incurring expenses you can’t afford. Before buying a policy, you’ll first want to decide what type of insurance you’re looking to buy; some types of coverage cost much more than others.
You’ll also want to check to see if your credit card already provides complimentary travel insurance. Many popular travel cards offer this feature, though the limits may be lower than you might prefer.
Finally, do your homework before buying a policy. Gather quotes from multiple companies before making a decision, and remember the average price of trip insurance ranges from 4% to 8% of your total vacation costs.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2022, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card