It probably won’t surprise you to learn that travel insurance is more expensive than it was before the pandemic. but how much more could come as a shock. Don’t panic though – we compared quotes from all the major insurers and found you don’t have to pay above the odds to get the best protection.
According to data from two leading comparison sites, compare the market and confusion.com, the average price of an annual travel insurance policy increased by around 50% between August 2019 and August 2020 for both European coverage as global, which could add hundreds of pounds to pre-pandemic premiums.
Reading: What is the cost of travel insurance
For a single two-week trip to the US, we were quoted £451 for a policy for a senior traveler with pre-existing health conditions. that’s more than the cost of some transatlantic flights.
It’s not just older travelers or those at higher risk who face higher premiums, it’s all of us. travel insurance is more essential than ever, so it follows that it will be more expensive. But that doesn’t mean you should accept being scammed.
check: it doesn’t pay to be loyal
To get an idea of what travel insurance prices are like right now, we compiled quotes from eight major insurers for 11 hypothetical clients, ranging from a young, healthy traveler purchasing a single-trip policy to France, to an elderly traveler with health problems purchasing an annual comprehensive insurance policy that includes additional cruise coverage.
For each insurer, we selected the cheapest policy that provided at least £5m for medical cover, £3,000 for cancellation, £1m for personal liability and £1,500 for personal effects. even with this minimum threshold in place, prices varied dramatically. in one case, the difference between the cheapest and most expensive budget for the same scenario was £249.
Across all 11 scenarios, the most expensive quote we received was, on average, more than double the price of the cheapest. virgin money quoted £58 to cover a 40-year-old man with asthma traveling to greece for two weeks, for example, while staysure quoted £126.
In a nutshell, if you use the same insurer over and over again, instead of comparing prices each time you purchase coverage, sooner or later you run the risk of paying much more than expected.
The best travel insurance is not always the most expensive
With prices varying so dramatically, it’s easy to fall into the trap of assuming that more expensive policies provide more comprehensive coverage. why else would they be so much more expensive? But buying travel insurance is a bit like ordering wine at a restaurant, in that the most expensive bottle isn’t necessarily worth the price.
In four of the 11 scenarios we reviewed, the cheapest quote was for one of the most comprehensive policies; while in six of the 11 times, the most expensive quote was among the least comprehensive, leaving you paying much more for significantly less protection.
For example, when we posed as a 60-year-old man with high blood pressure and cholesterol problems who took out an annual comprehensive policy, including cruise cover, the cheapest quote was £169 for the silver policy from aa, while the most expensive was £355 for standard direct travel cover.
in our most recent insurance analysis, the aa policy earned a high overall rating of 71% and a ‘superior’ covid coverage rating, while the direct travel policy earned an overall policy rating of 55% and a covid coverage rating of ‘low’.
so while the latter policy might be perfectly adequate and competitively priced for other customers or different trips (in fact, it was the cheapest option in two of the other scenarios we looked at), it clearly doesn’t make sense in this case pay £186 more for less comprehensive cover.
inscrutable risk assessments
Travel insurers charge you based on the likelihood that they will end up paying you for a claim. all insurers base that assessment on the same basic criteria, including age, health, and destination, to name a few, but with very different results.
the high cost of health care means that insurers consider the us. uu. It is a higher risk destination than the EU, for example. So when we posed as a 75-year-old with multiple pre-existing health conditions, we knew we would pay much more to purchase a policy for a two-week trip to the United States than for an equivalent trip to Spain.
However, what we didn’t expect was how much that price increase would vary between rival insurers. The post office quoted £202 for the trip to the United States, which was 63% more than for the trip to Spain.
while aa, direct travel and lv quoted £451, £384 and £391, respectively, for the trip to the united states, which was between 250% and 300% more than for the same person traveling to spain .
However, even with these increases, Saga was still the most expensive insurer for the trip to Spain, at £190, and the most expensive for the trip to the United States at £451, an increase of 138%.
Despite basing the quote on identical criteria, these four insurers (and their underwriters) evidently consider travel much riskier than the post office.
Clearly, then, personal data like age and health aren’t the only factors that affect what you pay; there are other considerations the insurer might be weighing behind the scenes, such as how many claims she has recently had to pay for similar trips.
The Association of British Insurers (ABI) told us: ‘Pricing decisions are a business decision for insurers and will depend on a range of factors, including their risk appetite and operating costs.’
The fact is that while travel insurance is more expensive, figuring out why it costs what it does is harder than ever; one more reason not to trust a single provider, regardless of how many times you’ve taken cover with them before.
3 tips to save on your travel insurance
- never accept a renewal quote for an annual policy before checking to see what else is available. At the very least, a quote from another provider could be a useful negotiating tool with your existing insurer.
- if you have a serious medical condition and need coverage from a specialist, please refer to biba’s travel medical directory. Otherwise, travel insurance comparison sites are a useful tool for gauging market prices.
- Filter your quotes based on the minimum level of coverage you need, then cross-reference the results with another comparison site, as well as our own policy scores, to find the perfect level of coverage for your trip.