Cheap Travel Insurance: How To Lower Your Premiums

There are numerous ways to lower your travel insurance premiums and bring down the total cost of your holiday.

Doug Skoog from the travel insurance and safety app, Freely, says with all important decisions, the first thing you should do is research–especially since travel insurance “varies a substantial amount in terms of features and benefits”.

As traveller needs vary significantly, the following suggestions should only be followed if they will still allow for the appropriate level of cover that you need.

Here are seven ways to make your travel insurance policy more affordable.

Explore Your Options

As with any insurance purchase, it’s always worth exploring the options available to you in order to find more affordable and appropriate cover. When it comes to travel insurance, there are many different policies on the market for Australians.

To compare travel insurance policies, there are a range of factors to consider: from the excess options to the maximum age of policyholders and whether it covers snow sports and adventure activities.

Forbes Advisor Australia has reviewed comprehensive travel insurance policies, senior travel insurance, and domestic travel insurance policies. Read through our ‘best of’ lists to compare policies easily side-by-side.

Check for Membership Perks

It’s not uncommon for insurance providers to have different offerings, such as Bupa offering both health insurance and travel insurance. When existing Bupa members take out a Bupa travel insurance policy, they will receive a 15% discount. Similar discounts exist for other insurance providers such as NIB and Medibank.

There are other membership perks you may be able to access as well. Credit cards often include complimentary travel insurance if you book the trip with your credit card, and loyalty programs like airline frequent flyer arrangements may offer members extra points when booking via their systems.

Before taking out an independent travel insurance policy, consider your existing memberships and see if there are any deals to help you save.

Related: Qantas Travel Insurance Review

Choose to Combine Policies with Other Travellers

Along with membership deals, some travel insurance providers will also offer discounts to parties travelling together, such as couples, groups or families. If you’re travelling with someone else for your entire trip, it’s worth considering whether you can combine your insurance instead of taking out individual policies.

“Another option is to evaluate if dependents are included in the base policy,” Skoog says.

For example, some policies don’t charge any additional costs for dependents; this means if you’re a family of two adults and two children, you’ll only need to pay for insurance for the two adults and the children will still be automatically covered.

“This can provide some savings,” Skoog notes.

Consider How Often You Travel

If you’re a frequent traveller–say, if you’re travelling internationally for work multiple times or plan on taking multiple holidays throughout the year–you may want to take out annual travel insurance instead of a single-trip policy.

Annual travel insurance is also known as annual cover, annual multi-trip travel insurance or frequent traveller insurance. They usually cover a 12-month period, although some providers may offer plans for 36 months or more.

There may be a maximum number of days per year in which your annual travel policy is active, and it may also extend to domestic travel. However, as the policy will have the same level of cover throughout the entire year, it may not be an appropriate choice if you need different levels of cover at different times of year (such as snow cover during the winter months).

Lower Your Excess

Excess is the amount of money you pay to your insurance provider upon making a claim. If you never make a claim, you’ll never need to pay the excess.

The amount of excess you will have to pay–or the choices of excess levels provided to you–will vary depending on the insurer, so it’s worth looking into, Skoog says.

“A higher excess will generally lower the cost of your policy, however, keep in mind that if you need to claim you’ll be paying out of your own pocket.”

Include Your Activities

It may also be worth carefully considering what you’ll be doing and whether the policy provides cover for your activities while you’re travelling, Skoog says, as finding policies that automatically include these activities will be cheaper than adding them on as extras.

Think about the types of extras and inclusions that may be relevant when trying to find cheap travel insurance: Are you going on a cruise? If so, a policy that is targeted towards cruising holidays could be ideal. The same goes for other extras that could automatically be included in some base policies, including special event cancellation and more.

“In terms of practical ways to lower your premium, make sure your policy provides coverage for everything you need it to, but try to avoid paying for things that you don’t need,” Skoog adds.

“For example, if you aren’t hiring a car, you may not need car rental excess insurance benefits, which could be bundled in the product you purchase.

“Only you know what you’re likely to get up to on holiday, so you should always make an informed decision prior to purchasing by reading the relevant product disclosure statement.”

Be Honest

When taking out a travel insurance policy, you’ll be asked to declare any pre-existing medical conditions. If you don’t, you may not be appropriately covered should something come up.

Unfortunately, it’s become a trend for customers to think it’s better to not declare something, Skoog says. “Maybe they think it won’t happen to them, or that a historic condition is ‘better now’ and bringing it up will only cost them extra money,” he says.

“That may be true,” Skoog admits, “but deciding not to bring it up could end up costing substantially more and lead to a situation in which the customer, or even their family, is faced with enormous financial costs and little way to pay them.”

In short, Skoog says, you should always be honest with your insurer and make sure you’re getting the right coverage for your needs.

When Forbes Advisor Australia analysed a range of the best comprehensive travel insurance providers available to Australians in 2023, cost was not considered as a comparable factor. This is because the price of your travel insurance will depend on personal circumstances: from your age to the destination and duration of your trip.

To demonstrate the wide range of travel insurance policy costs, even from the same provider, Forbes Advisor Australia collected quotes from Travel Insurance Direct–one of our picks of the top ranked comprehensive travel insurance provider for 2023.

A 30-year old taking out a policy to travel to New Zealand for three weeks would pay around $220 with winter sports cover. A 70-year old taking the same trip would need to pay $430.

Meanwhile, a 30-year old on a month-long trip to Europe would pay $300, while a 70-year old would pay more than double–coming out at $611.

These quotes from TID demonstrate how easily the price of travel insurance can significantly differ depending on certain factors. When you consider more differentials, such as pre-existing medical conditions, specified item cover for valuables or cancellation limits, the cost difference becomes even more pronounced.

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Is Domestic Travel Insurance Worth It?

While overseas travel insurance seems like a no-brainer for most due to the medical cover available, many Australians may not think domestic travel insurance is worth it considering we are covered by Medicare.

Regardless, domestic travel insurance can still be a worthwhile purchase depending on the type of trip you are doing: whether it’s car hire excess for a roadtrip or cancellation cover in case you miss a special event.

To find cheap domestic travel insurance, you can follow the same tips as above in order to lower your policy and still be protected.