Cheap travel insurance

A young man walks, looking at his phone and smiling at the cheap travel insurance guide he's reading on Mozo. A plane flies overhead.

Travelling is expensive. There’s the cost of flights, accommodation, eating out, and experiences – not to mention the need to take time off from work and other obligations. So, the last thing you want to do when you’re travelling is have to fork out even more of your hard-earned cash to cover the costs if something goes wrong. 

But, like with our cars, homes, and pets, there are travel insurance policies which we can take out that are designed to help us out in the event that something goes wrong while we’re away. 

While you might be wondering if travel insurance is worth the extra up-front cost (after all, we were just talking about how expensive it can be to travel), it’s worth considering what sort of cover travel insurance can provide

Of course, one way you can free-up a little more of your holiday budget is to look for a cheap travel insurance policy. But it’s important to note that no one policy will be cheap for everyone – and we’ll get into why shortly. What you’re really looking for is value for money. That’s why doing your research to ensure a policy provides you with the cover you want is a great first step.

How travel insurance costs are calculated

All insurance premiums (the amount you pay up-front for cover) are calculated by providers based on how risky it will be for them to insure you. After all, they’re the ones forking out potential millions of dollars to cover you on your journey. 

So when it comes to getting a travel insurance quote, insurance providers will ask you a series of questions that gives them an idea of who you are and what your needs may be. 

Generally, this covers things like travelling with pre-existing medical conditions, what sorts of activities you’ll be participating in that may increase your risk (like snow sports and cruise cover), as well as factors like age, where you’re going, and how expensive the personal belongings are that you’re taking. 

Basically, the more likely you are to make a claim, the higher the insurance premium is likely to be.

What makes travel insurance cheap?

Illustrations of the factors that influence the cost of travel insurance, including age, health, activities, duration, destinations, level of cover, and excess.

The sorts of factors which can influence the price of your travel insurance premium are usually centred around who you are, what you’re doing on your trip, and what benefits are included with the travel insurance policy. These can include:

  • Your age (and any ages of dependents you’re travelling with) – your age can affect the cost of your policy because, generally speaking, as you get older you may be more prone to illness and injury. However, if you’re travelling with dependents, they may be eligible for cover on your policy free of charge, subject to terms and conditions. So, age works both ways when determining the cost of travel insurance.
  • Your health (including pre-existing medical conditions) – Your health affects your travel insurance policy, including any pre-existing medical conditions which you might have. The reason health conditions can drive up the cost of your premium is because of the increased risk of a condition acting up while overseas, which could lead to you ending up in hospital with a hefty medical bill to cover.
  • The kinds of activities you’re participating in – If you’re going skiing or on a cruise, then those sorts of activities influence the amount of risk a provider sees. Usually, you’ll have to opt-in and pay an extra premium for any portion of your trip where you’ll be participating in these activities. But if you don’t tell your provider that you’re doing these things, then any claims which result from your participation in them will not be covered.
  • How long you’re travelling for – Insurance for a shorter trip will cost less than a longer trip because there’s more time for things to go wrong, in an insurance provider’s eyes.
  • Where you’re travelling – The destinations you choose may also have an effect on the cost of your premium, with higher-risk destinations driving up the cost. In fact, once a destination is seen as too risky by the Aussie government’s Smartraveller service, you may be denied travel insurance altogether for that destination.
  • The level of cover you’re choosing – When choosing a travel insurance policy, there may be different levels of cover to decide on. The more comprehensive the cover is, the more your premium will cost. But, choosing a more comprehensive policy will provide you with more benefits than a lower-level policy.
  • How much excess you pay – Like with other types of insurance, you can make your travel insurance premium cheaper by opting to pay a higher excess. This means that your initial cost could be lower, but if you need to make a claim, you’ll be chipping-in more money. 

Note, not all travel insurance providers use the same criteria. Some may only consider your age and how much your trip costs, while others are more in-depth.

What is the cheapest travel insurance?

A digital illustration of a wallet full of coins

Cheap travel insurance is likely to be the bare-minimum cover you can get. Often called ‘basic’, ‘essentials’, or ‘medical-only’, the cheapest travel insurance likely won’t cover you for things like delayed flight accommodation, lost baggage, or injuries resulting from higher risk sports and activities, which some of the more expensive policies might do.

The cheaper end of travel insurance is usually preferred by those who are travelling light and on a budget – like backpackers and students. These policies will generally cover your health and medical emergencies, with little-to-no cover for your belongings or cancellations.

On some of the cheaper travel insurance policies, you won’t have the option to add optional extras, like snow travel insurance or cruise travel insurance. But that depends on the provider.

What isn’t covered with cheap travel insurance?

As we’ve mentioned, cheap travel insurance is likely to be a more basic policy option, without the bells and whistles of the more comprehensive ones. In many cases, cheap travel insurance will NOT cover (or only cover to a limited extent):

  • Cancellation cover 
  • Travel delays 
  • Family emergencies
  • Alternate transport expenses
  • Lost, stolen, or delayed luggage 
  • Adventure activities

Cheap travel insurance will usually only cover the basics, like emergency medical. 

The inclusions in a travel insurance policy will change, however, depending on the provider. That’s why it’s always important to check the product disclosure statement (PDS) for your policy before buying it, to check what the policy exclusions might be.

Is cheap travel insurance the best for me?

A girl checks her phone

Unfortunately there’s no easy answer for everyone. It all depends on your circumstances, what you’ll need cover for, and what you will be doing on your travels. It’s important that you do your own research on this before you make your choice. 

You have to ask yourself, ‘is it worth paying for cheaper travel insurance if I’m not getting the coverage I might want from a more comprehensive policy?’

For example, if you’re travelling light, without expensive personal belongings like cameras and laptops, then you might not be so worried about your bags being stolen or lost. In that sense the risk may be more worthwhile taking to save yourself some money. 

As with all insurance, you’re essentially protecting yourself from the unpredictable moments that happen with life. So, whether a cheap travel insurance policy is good for you is up to your own discretion.

While it’s near impossible to predict if something is going to go wrong on your trip, if you can find travel insurance that is both affordable and provides the coverage that suits you, it could save you from stressing out about a myriad of things while you’re just trying to relax by the beach, or sightsee.

How to lower the cost of my travel insurance

One of the main ways to lower the cost of your travel insurance is to opt to pay a higher excess. In doing so, your initial premium may be reduced, meaning that you have attained coverage at a cheaper price. But the downside to doing this is that you may have to pay even more if you actually do need to make a claim. 

Some insurance providers may also offer discounts if you purchase a policy online, so look out for deals like that.

Who has the cheapest travel insurance?

As the premium you pay for travel insurance isn’t a one-size-fits-all affair, as it will usually be based on the insurance provider’s risk assessment, it’s hard to say who offers the cheapest travel insurance policy. All we can really say is that the lower the chance is of you needing to make a claim, the lower your premium may be.

When is the cheapest time to buy travel insurance?

The cost of travel insurance will be the same whether you purchase your policy one day before or two months before you actually take off. That’s because you’re only paying for the days you’ll be on holiday. But that doesn’t mean you should leave it to the last minute. If you have cancellation cover included with your policy, then that benefit technically starts from the day you purchase your policy – but that’s a helpful bonus in case you get ill and need to cancel your trip. 

What this means is that it’s a good idea to purchase your travel insurance policy as soon as you make any big financial commitments, like flights and accommodation, so that your cancellation cover can kick in and potentially save you thousands of dollars if you can’t go on your holiday for whatever reason.

Why is some travel insurance cheaper than others?

Some travel insurance will be cheaper than others depending on a few factors. These can include what cover level is on offer, which insurance benefits are included or optional, how large an insurance provider is (economy of scale), and can also change in price depending on their risk-profile criteria.

Is cheap travel insurance still good?

Some people consider ‘cheap’ to be a dirty word when looking at certain products, but in reality it really just comes down to whether a policy provides the scope of cover you think you’ll need for your trip, and whether or not the travel insurance is affordable for you.

What if I can’t afford travel insurance?

A popular saying is that if you can’t afford travel insurance, then you can’t afford to travel. This is because the cost of covering yourself (especially while overseas) can far outweigh an insurance premium and any excess fees. 

For example, if you get emergency medical attention in the USA, then you might be stuck with a super-sized hospital bill. Without an insurance provider to help you cover the costs, you might be liable for a payment ten times as expensive as travel insurance. 

There are also countries which you won’t be able to enter without an adequate level of travel insurance. What defines ‘adequate’ is different from country to country, so make sure you read a destination’s entry requirements on Smartraveller before you commit to big expenses like flights and accommodation. 

Some of the countries which require a travel insurance policy to enter include:

  • Thailand
  • Cuba
  • Antarctica 
  • Schengen countries (26 select European countries) 
  • UAE
  • USA
Will pre-existing medical conditions make my travel insurance more expensive?

In some cases, having a pre-existing medical condition that is not automatically covered under a travel insurance policy could make your premium more expensive. It’s part of the provider’s risk assessment process that tries to work out how likely you are to file a claim. It’s hard to say for sure, but keep this in mind when you’re going for a quote. 

There are many policies which automatically include travel insurance cover for a range of pre-existing conditions. However, this isn’t always the case, and you should always let the provider know about any medical conditions, so that they’re aware of them. 

Plus, it’s important to check out the eligibility requirements for coverage as sometimes there are terms and conditions which could hinder any claims you need to make related to them.

Does my age affect the cost of travel insurance?

Age does affect your travel insurance. In fact, some providers have age limits which might deny your request for insurance after a certain age. 

But there are some options for seniors travel insurance out there, which those who are older may find suits their needs and travel-style more closely than catch-all, generic policies.

If you're looking for a travel insurance policy at the moment, start here with Mozo's travel insurance comparison table. 

Compare travel insurance - last updated 13 August 2022

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