You probably won't be surprised to learn that travel insurance is more expensive than it was before the pandemic. But how much more might come as a shock. Don't panic though - we've compared quotes from major insurers and discovered that you don't need to pay over the odds to get the best protection.
According to data from two leading comparison sites, Compare the Market and Confused.com, the average price of an annual travel insurance policy increased by around 50% between August 2019 and August 2020 for both European and global cover, potentially adding hundreds of pounds to pre-pandemic premiums.
For a single two-week trip to the US, we were quoted an eye-watering £451 for a policy for an older traveller with pre-existing medical health conditions. That's more than the cost of some transatlantic flights.
It's not just older or higher-risk travellers who face bigger premiums either - it's all of us. Travel insurance is more indispensable than ever, so it follows that it will be more expensive. But that doesn't mean you should accept being ripped off.
Shop around: It doesn't pay to stay loyal
To get an idea of what travel insurance prices are looking like now, we collected quotes from eight major insurers for 11 hypothetical customers, ranging from a young and healthy traveller buying a single-trip policy to France, to an older traveller with health issues buying an annual global insurance policy that includes additional cruise cover.
For every insurer, we selected the cheapest policy that provided at least £5m for medical, £3,000 for cancellation, £1m for personal liability and £1,500 for personal belongings. Even with this minimum threshold in place, prices varied dramatically. In one case, the difference between the cheapest and most expensive quote for the same scenario was as much as £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 with asthma going to Greece for two weeks, for instance, whereas Staysure quoted £126.
Simply put, if you use the same insurer again and again, as opposed to shopping around each time you take out cover, sooner or later you risk paying massively over the odds.
The best travel insurance isn't always the most expensive
With prices varying so dramatically, it's easy to fall into the trap of assuming pricier policies provide more comprehensive cover. 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 checked, 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 significantly more for significantly less protection.
For example, when we posed as a 60-year-old with high blood pressure and cholesterol issues taking out an annual global policy, including cruise cover, the cheapest quote was £169 for AA's Silver policy, while the most expensive was £355 for Direct Travel's Standard cover.
In our most recent insurance analysis, the AA policy earned a high overall score of 71% and a 'Superior' Covid cover rating, while the Direct Travel policy got an overall policy score of 55% and a Covid cover rating of 'Low'.
So while the latter policy might be perfectly suitable and competitively priced for other customers or different trips - indeed, it was the cheapest option in two of the other scenarios we looked at - it clearly doesn't make sense in this case to pay £186 more for less comprehensive cover.
Inscrutable risk assessments
Travel insurers charge you based on how likely they think it is they'll 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 vastly different results.
The high cost of healthcare means insurers deem the US to be 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'd pay significantly more when buying a policy for a two-week trip to the US, than for an equivalent trip to Spain.
What we weren't expecting, though, was how much that price hike would vary between rival insurers. The Post Office quoted £202 for the US trip, which was 63% more than for travelling to Spain.
Meanwhile the AA, Direct Travel and LV quoted £451, £384 and £391, respectively, for the US trip, which was between 250% and 300% more than for the same person travelling to Spain.
However, even with these hikes, Saga was still the most expensive insurer for the Spain trip, quoting £190, and joint most expensive for the US trip at £451 - an increase of 138%.
Despite basing the quote on identical criteria, these four insurers (and their underwriters) evidently view the trip as far riskier than the Post Office.
Clearly, then, personal details like age and health aren't the only factors affecting what you pay; there are other considerations the insurer might be weighing up behind the scenes, such as how many claims it has recently had to pay out for similar trips.
The Association of British Insurers (ABI) told us: 'Pricing decisions are a commercial decision for insurers and will depend on a variety of factors including their appetite for risk and operational costs.'
The fact is, while travel insurance is more expensive, working out why it costs what it does is as difficult as ever - all the more reason not to put your faith in one provider, regardless of how many times you've taken out cover with them before.
3 tips for saving on your travel insurance
- Never accept a renewal quote for an annual policy before checking what else is out there. If nothing else, a quote from another provider could prove a useful bargaining tool with your existing insurer.
- If you have a serious medical condition and need specialist cover, check 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 cover you need and then cross-reference the results with another comparison site, as well as with our own policy scores, to find the perfect level of cover for your trip.
