What affects the price of travel insurance?
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What are the key things that affect travel insurance costs?
What affects the price of travel insurance?
Travel insurance can feel like an unnecessary extra cost when you’re planning a trip. But with prices rising, it’s worth factoring into your holiday budget.
Every policy has a different price depending on who you are and where you’re going. In this guide, we’ll break down what can change the cost of travel insurance and what to look out for when you compare policies.
Summary of key factors affecting the cost of insurance
Travel insurance for UK travellers has gone up in recent years due to widespread travel disruption and the rising cost of healthcare and medical repatriation. Insurers may set higher policy limits in reaction to global events, then provide a quote based on your age, health history and travel plans.
If you want to get a good deal on your policy, make sure you only select the cover you need and use a specialist comparison website like PayingTooMuch to compare policies side by side.
The main factors influencing the cost of your policy
When you request a quote for travel insurance, insurance providers will ask a set of questions to help them work out how much a suitable policy would cost. Typically, these questions cover the factors below.
Destination | Travel insurers often group countries and regions into destination zones. For example, you can get cover for Europe, Worldwide (including the USA) or Worldwide (excluding the USA), depending on where you’re going on holiday. Even if you’re travelling in the UK, travel insurance can help to cover your costs if you need to cancel your trip or cut it short.
Countries are usually grouped according to their medical treatment costs. In Europe, countries like Spain, Madeira and the Balearic and Canary Islands usually fall into a more expensive ‘Europe 2’ category. Travel insurance for other destinations like the USA, Canada or the Caribbean can also cost more, because healthcare and repatriation costs are usually significantly higher than in the UK and Europe. |
The length of your trip | The longer you’re away, the more likely it is that you’ll need to make a travel insurance claim. So, policies tend to go up in price in line with the duration of your stay abroad.
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Age | If you’ve celebrated a milestone birthday recently, you might have noticed that your travel insurance quotes have gone up. That’s because as we get older, we’re more likely to need medical treatment while we’re travelling.
Insurers often have age-related policy limits for this reason. So, even if you don’t have any health problems, you may find that your travel insurance starts to cost more as you age. Many companies offer over 50s, 60s, 70s and 80s cover to help you find age-appropriate protection.
It’s important to compare your options because as you get older, it’s more likely that there will be more restrictions on your policies. For example, getting an annual multi-trip policy may be more difficult, and the amount of time you can be away may be shorter. |
Medical history | A pre-existing medical condition, like cancer, diabetes, epilepsy or a heart condition, may increase the cost of your travel insurance. If you’re worried about finding the right type of cover for your condition, you may want to take a look at specialist medical travel insurance. |
Cover type | Travel insurance policies offer a range of cover levels. Naturally, the more your policy includes, the more it’s likely to cost. So, if you need high limits for extra peace of mind or specific protection for high-risk activities (like winter sports) or personal valuables, you can expect your travel insurance to cost more than a basic policy. |
Has the cost of travel insurance gone up?
The short answer is yes, the average price of travel insurance has increased in the UK. Although annual multi-trip cover costs have started to dip, you might still pay more for your cover than you did a few years ago.
Global events like the COVID-19 pandemic, extreme weather incidents and widespread travel disruption have had an impact on pricing across the industry. Geopolitical tensions have also taken a toll on supply chains and energy prices, causing insurance costs to rise further.
Plus, most UK European Health Insurance Cards (EHICs) have now expired. These were replaced by the UK Global Health Insurance Card (GHIC) after Brexit. A valid GHIC still lets UK residents access state healthcare in some EU regions. But, it covers fewer places than the old EHIC did. So, many travellers need to take out travel insurance to bridge this gap and make sure they’re protected.
Still, as we explained above, the cost of travel insurance cover depends on a range of factors. So, it’s worth doing your research and comparing policies carefully before you buy.
When is the best time to buy travel insurance?
It’s usually a good idea to buy travel insurance straight after booking your holiday. This will make sure you’re covered for cancellations, illnesses and anything else that could put an unexpected spanner in your travel plans. Some policies will cover holiday-ending issues that happen before your trip starts, but only if your policy is active before the incident happens.
The cost of travel insurance can change throughout the year as economic inflation and the price of private healthcare and medical repatriation go up and down. That makes it hard to predict exactly how much a standard policy will be. But by buying cover early, you can start planning your trip and making the most of early bird deals, knowing that you’re insured.
Tips on finding affordable travel insurance
Still wondering why your travel insurance is so expensive? Try taking these simple steps to avoid paying too much for cover.
- Choose the right region. Make sure you’re only buying travel insurance for the locations where you’ll be travelling. For example, don’t get annual ‘worldwide’ cover if you’re only travelling within Europe that year, as global policies can be significantly more expensive.
- Compare single- and multi-trip cover. If you’re heading on multiple trips in a 12-month gap, having one annual multi-trip policy may be more cost-effective than getting single-trip cover for each holiday.
- Lower the excess. Budget-conscious travellers often increase the voluntary excess on their travel insurance to lower the cover cost. Just keep in mind that you’ll be responsible for paying that amount if you need to claim, so don’t set it beyond what you could afford in an emergency.
- Declare everything honestly. Answering truthfully when insurers ask for your full health history will help make sure your policy is valid. While declaring a pre-existing medical condition can make the price of your cover go up, a rejected claim would mean you’d need to pay for everything yourself.
- Check your extras. Your travel insurance should cover cancellations, medical expenses, personal belongings and medical flights back home as a minimum. Some travellers choose higher limits when travelling to countries where healthcare is expensive. But if your policy includes anything you don’t need for your holiday, like extreme sports or extra gadgets, removing it could reduce the cost of cover.
- Ask about ‘PMI’ discounts. People who already have private medical insurance (PMI) can sometimes get special rates and discounts on travel insurance from selected insurers.
- Look for group policies. Group travel insurance policies are often less expensive per person than if you all took out separate cover. So, if you’re going on a group trip with friends or family, it’s worth looking into this option.
Whatever your travel plans are, having valid insurance that suits your circumstances can be a lifeline when things go wrong. Comparing different types of cover when you book your trip will help you find everything you need in a travel insurance policy without overpaying.