How Much Does Travel Insurance Cost?

Debra Gibb, travel agent and director of Why Travel, says rather than a nice to have, travel insurance is a highly recommended by travel agents and the government body Smartraveller alike.

“…You never know what can occur whilst travelling abroad with medical costs and these can certainly be an expense you don’t want to encounter in other countries when we have no reciprocal medical agreements,” Gibb explains.

But also in countries where Australians have reciprocal healthcare rights, such as the UK, consumers should be careful: while a hospital stay may be free, additional costs aren’t covered. These could include flight cancellations or changes if the condition means you can’t take your original flight, or flying family members over to be with you.

Gibb points out that medical emergencies aren’t the only reason to take out travel insurance. These days, airlines are often facing many travel delays, and cover for your luggage for loss and/or damage is definitely recommended, Gibb says.

The cost of a travel insurance policy varies immensely depending on individual factors, which means its hard to give an average cost, Gibb explains.

It depends on your holiday or trip destination, the length of your stay, your age, any pre-existing medical conditions, and more, such as extras you choose to include or exclude.

To give an example of the greatly varying cost of travel insurance, consider these quotes: a travel insurance policy for a 10-day trip to Bali for someone in their 30s costs around $60. By comparison, insurance for a two-month trip to the US for someone in their 80s will cost around $3,000, reflecting the steep cost of healthcare in America.

Related: More Bang for Your Buck: Countries Where the Aussie Dollar Goes Far

When insurers are calculating premiums, the cost of medical care in the destination country is a key factor (as evident in the previous Bali vs USA quote.

The length of trip also has an impact because the longer someone is away, the more likely the chance is of a claim occurring, while older people are considered to pose a higher risk because they typically have pre-existing medical conditions.

Insurance for domestic travel will typically be cheaper than for international travel, with a long weekend trip covered for around $50. This is largely due to the national and universal nature of Medicare, which means Australian travellers will be covered for medical expenses wherever they go domestically.

Despite Medicare, Gibb still says it can be worth taking out domestic travel insurance, because there are still things that can go wrong on an interstate trip, such as flight cancellations and lost luggage.

“Domestic insurance depends again on the person, you can take a simple cancellation cover as travelling domestically you are covered medically, people would generally only take for cancellation or luggage purposes,” Gibb explains.

There are a few different ways you can lower the cost of your travel insurance premium and therefore save money.

Related: How To Lower Your Travel Insurance Premiums

Membership perks are a common way to do so, as some credit cards offer free travel insurance, which can be one way of saving on your premiums, but it’s important to check the fine print to ensure you’re covered. You may also find you can save money by taking out a policy with the same insurer that you are insured with in other parts of life, such as your car insurance provider.

Another option is to increase your excess, as this will lower the cost of your premium. Keep in mind, however, that if you need to make a claim, you will have to pay this excess up-front. If you never make a claim, you’ll never pay the excess.

If you’re travelling with others, you may also want to consider combining your policies rather than all taking out individual cover. This could see you end up with a bundled discount, helping you all save money on your travel insurance costs.

As with any insurance policy, another great way to lower the cost of your premium and get a cheaper policy is to shop around. Find different quotes from different providers to find the best cost, while also taking care to read the product disclosure statements and make sure you’re covered for what you need.

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