New Delhi (India), June 22: The travel industry is finally making a comeback after a few years of sluggishness. As eager travelers plan to splurge on their dream vacation, they're in for a blow: Travel costs have skyrocketed significantly over the past year. Everything has become more expensive, from plane tickets and hotel rates to food and transportation. This also directly affects travel insurance premiums, which are expected to rise as travel costs rise.
This blog will discuss why travel insurance rates will increase and provide tips to keep your policy affordable.
Reasons why travel insurance rates are increasingHigher travel costs
In recent years, most travel companies have suffered heavy losses, resulting in a reduction in staff, fleet size and operations. Now, demand has recovered much faster than supply. Travel providers have passed on inflated costs to customers to curb losses and sustain operations.
Evolving CoveragePreviously, standard travel policies did not offer protection against risks related to the pandemic. However, after COVID-19, people became more aware of such requirements. Insurance companies have improved their plans to cover cancellations and medical costs. Naturally, these additional benefits and more comprehensive coverage come with higher premiums. Suppliers like ACKO have also introduced optional add-ons to meet specific needs.
Rising healthcare costs
Healthcare costs around the world have been rising steadily in recent years. Treatment fees, medication costs, hospital costs – everything has become more expensive. This upward trend directly impacts travel insurance premiums, as policy rates are tied to the destination's medical costs. Insurers must now take into account high healthcare expenses in different regions before determining exact premiums for policyholders. Strategies to save on premiums despite increases
Comparison Shop
With numerous policy options, comparing prices is vital before purchasing travel insurance. Premiums often vary significantly between providers for similar coverage. Use online comparison tools to get quotes from multiple insurers based on the details of your trip. This will help you spot the best rates. But don't just consider the price. Before choosing a plan, analyze the features, inclusions, limitations, etc. of the policy. Opt for group insurance
If you are planning a trip with friends or family, opting for a group travel insurance policy can result in significant savings. With bundled policies, you get the advantage of wholesale pricing and discounted premiums. Additionally, administrative expenses are also reduced when divided among many bosses.
Carefully evaluate needsEvaluate whether you require all the amenities of comprehensive plans, especially if you are an occasional traveler going to a nearby destination. People often overinsure themselves by opting for expensive global plans that include coverages they may never use, resulting in unnecessary expenses. Let's assume that a basic trip cancellation + medical policy is enough for your next vacation depending on destination, activities, etc. This offers adequate protection at a much lower cost.
Increase deductibles
Deductibles refer to the portion of any claim that you must pay out of pocket before the policy takes effect. You can substantially reduce premiums by volunteering to take on a slightly higher deductible amount. For example, increasing your medical claim deductible from RS 500 to RS 1000 can reduce the cost of your policy. Just make sure you have enough savings to pay the deductible if necessary. Take advantage of discounts
Many insurance providers offer discounts on travel policy premiums based on specific scenarios and demographic groups. For example, children and seniors can get special rates. Multi-trip policies are usually cheaper than single-trip policies. Bundling your travel insurance with home or auto policies could net you a discount.
Therefore, ask appropriately and determine if you can take advantage of special offers that fit your profile and needs. But read the fine print to check eligibility terms and avoid rejections later. The Bottom Line
While most expect travel costs to be higher in 2025, witnessing rising insurance premiums can be jarring. However, as explained above, this is due to logical reasons related to increased risks and coverage. The good news is that you can still get affordable protection if you plan diligently.
Follow the tips shared to minimize premium increases this year. If budget is a constraint, consider modifying travel plans to reduce expenses and align them with essential policy offerings. Click here to check out ACKO's comprehensive and affordable travel insurance plans.
This blog will discuss why travel insurance rates will increase and provide tips to keep your policy affordable.
Reasons why travel insurance rates are increasingHigher travel costs
In recent years, most travel companies have suffered heavy losses, resulting in a reduction in staff, fleet size and operations. Now, demand has recovered much faster than supply. Travel providers have passed on inflated costs to customers to curb losses and sustain operations.
Evolving CoveragePreviously, standard travel policies did not offer protection against risks related to the pandemic. However, after COVID-19, people became more aware of such requirements. Insurance companies have improved their plans to cover cancellations and medical costs. Naturally, these additional benefits and more comprehensive coverage come with higher premiums. Suppliers like ACKO have also introduced optional add-ons to meet specific needs.
Rising healthcare costs
Healthcare costs around the world have been rising steadily in recent years. Treatment fees, medication costs, hospital costs – everything has become more expensive. This upward trend directly impacts travel insurance premiums, as policy rates are tied to the destination's medical costs. Insurers must now take into account high healthcare expenses in different regions before determining exact premiums for policyholders. Strategies to save on premiums despite increases
Comparison Shop
With numerous policy options, comparing prices is vital before purchasing travel insurance. Premiums often vary significantly between providers for similar coverage. Use online comparison tools to get quotes from multiple insurers based on the details of your trip. This will help you spot the best rates. But don't just consider the price. Before choosing a plan, analyze the features, inclusions, limitations, etc. of the policy. Opt for group insurance
If you are planning a trip with friends or family, opting for a group travel insurance policy can result in significant savings. With bundled policies, you get the advantage of wholesale pricing and discounted premiums. Additionally, administrative expenses are also reduced when divided among many bosses.
Carefully evaluate needsEvaluate whether you require all the amenities of comprehensive plans, especially if you are an occasional traveler going to a nearby destination. People often overinsure themselves by opting for expensive global plans that include coverages they may never use, resulting in unnecessary expenses. Let's assume that a basic trip cancellation + medical policy is enough for your next vacation depending on destination, activities, etc. This offers adequate protection at a much lower cost.
Increase deductibles
Deductibles refer to the portion of any claim that you must pay out of pocket before the policy takes effect. You can substantially reduce premiums by volunteering to take on a slightly higher deductible amount. For example, increasing your medical claim deductible from RS 500 to RS 1000 can reduce the cost of your policy. Just make sure you have enough savings to pay the deductible if necessary. Take advantage of discounts
Many insurance providers offer discounts on travel policy premiums based on specific scenarios and demographic groups. For example, children and seniors can get special rates. Multi-trip policies are usually cheaper than single-trip policies. Bundling your travel insurance with home or auto policies could net you a discount.
Therefore, ask appropriately and determine if you can take advantage of special offers that fit your profile and needs. But read the fine print to check eligibility terms and avoid rejections later. The Bottom Line
While most expect travel costs to be higher in 2025, witnessing rising insurance premiums can be jarring. However, as explained above, this is due to logical reasons related to increased risks and coverage. The good news is that you can still get affordable protection if you plan diligently.
Follow the tips shared to minimize premium increases this year. If budget is a constraint, consider modifying travel plans to reduce expenses and align them with essential policy offerings. Click here to check out ACKO's comprehensive and affordable travel insurance plans.
