How much does travel insurance cost?

Looking to pay less for your travel insurance? Find out what affects your costs and how you can lower them.

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Travel insurance can seem like a needless expense, yet it can be vital, potentially saving you thousands upon thousands of pounds.

According to the Association of British Insurers the average travel insurance premium in 2018 was £38 for Brits.

While this might seem like money you could better spend on a couple bottles of wine or a nice meal, it is dwarfed by the average claim amount of £800.

It makes complete sense though to want to spend as little as possible on travel insurance. So we explore what factors affect your insurance costs and provide tips for shaving precious pennies off your premium.

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What influences the cost of travel insurance?

An insurance company will ask for a couple of key bits of information about you (and anyone else covered on the policy) when working out the premium.

Who is covered?

  • Age. Travel insurance will get increasingly more expensive once you’re in your 40s and above. Unfortunately some insurers will refuse to cover seniors as they see people aged 65 and over as too high risk. This is down to the fact they’re more likely to need treatment abroad. Thankfully though, there are specialist providers that protect older travellers.
  • Medical conditions. If you have a pre-existing medical condition then travel insurance will generally be more expensive and harder to buy.

Type of policy

  • Annual or single trip. Buying an annual policy generally works out as being better value for money if you’re going away multiple times in a year, while a single-trip policy will be cheaper if you’re only going away once.
  • Excess. An excess is the amount you contribute towards a claim before the insurance company starts paying out. Accepting a higher excess will lower your premiums, although you need to make sure you can afford to pay the excess.

Your trip

  • Destination. Where you’re going invariably affects insurance costs. Opting for a “Europe only” policy will be cheaper than taking out a worldwide deal. Why? Well one major factor is that healthcare costs in countries like the US are quite high.
  • Duration. It’s simple maths: the longer you’re away the higher the chance you have of making a claim. A single-trip policy which will only cover you for 31 days away will be cheaper than a backpacker policy that protects you for a 12-month stint abroad.

What activities you’re doing

  • Higher-risk activities. If you plan on doing a high-risk activity like skiing or bungee jumping, you’ll probably have to pay more to get covered for these thrill-seeking escapades.
  • Cruise cover. Certain types of holidays, such as cruises, will require you take out an additional level of insurance. A regular policy won’t compensate you for falling ill while at sea, or cover a missed boat departure. So cruise cover can be a good idea, although you’ll have to pay more.

What you’re taking with you

  • Personal belongings. Should you take expensive belongings with you, such as jewellery, you’ll want a policy which will properly compensate you should your items be lost, damaged or stolen. This will mean paying more in insurance premiums though.
  • Single item limits. Most policies will have a maximum limit on the amount they will pay out for a specific item. So you might not get more than £200 for a stolen camera that was really worth £2,000. There is a solution thankfully, where you pay extra to the insurer and it agrees to reimburse higher amounts.
  • Gadget cover. These days you can buy gadget cover for your electronics when you go away, but again this will cost more. Although do check and see if your contents insurance already covers your valuables.

More ways to save on travel insurance

  • Shop around. Don’t settle for the first deal you see. Use comparison websites and compare plenty of quotes.
  • Avoid travel agents. I repeat, do not buy insurance from a travel agent. You’ll invariably pay over the odds. Once you’ve decided which policy you want, buy direct from the insurer’s website – it’s cheaper this way.
  • Use an insurance broker. Insurance brokers can be an inexpensive way to get a tailored travel insurance deal. They won’t charge you and they can advise you which insurer will provide you a decent deal for the best price.
  • Buy the cover you need. Don’t pay for more protection than necessary. Weigh up whether you really need cancellation cover, or whether you really need an annual policy.
  • Look out for discounts. Keep your eyes peeled for coupon codes as the right one could help shave valuable pennies off your travel insurance costs.

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