How to get cheap travel insurance for your next holiday

With border restrictions easing, many Canadians are getting ready to freely travel for the first time in almost three years. But along with the excitement of getting away, it’s important to remember to protect yourself and your companions with travel insurance. 

When you book your holiday, you'll typically be given the option to add travel insurance to your package. This is for good reason as an unforeseen emergency while you’re away can be costly. But travel insurance costs are rising making it harder for Canadians to afford coverage.

As well, travel from Canada is also expensive. In 2016, Kiwi.com ranked Canada the sixth most expensive country in the world to buy an airline ticket. In some cases, Canadian travellers will forgo the extra cost of travel insurance to save some money because the cost of travel continues to rise. But this small upfront expense can prove to be a financial lifesaver. 

How much does travel insurance cost?

The cost of travel insurance will vary depending on the type of coverage you get – the most expensive one being an all-inclusive package with both medical and trip cancellation insurance. According to Forbes Advisors, travellers should budget 5 to 6% of their trip costs for travel insurance. 

Using the Ratehub.ca travel insurance calculator, we found that a couple – both 35 years old and non-smokers – travelling to Mexico in October 2022, could get standard travel insurance for $132.15. This package would cover 5 million dollars in emergency medical expenses, trip cancellation insurance up to $2,500, and other perks like coverage for lost luggage and theft. 

Why are travel insurance rates increasing?

Travel insurance rates have gone up since the start of the COVID-19 pandemic. This can be directly related to the increased demand for coverage (as well as the increased making of claims) during the unprecedented time. Insurance companies are also trying to recoup more money due to inflation. As the cost of living increases, it now costs more to pay out a claim – so you'll be paying more for travel insurance.

Some countries also require travellers to purchase insurance before their visit, only increasing demand further. For example, in Thailand, the government has made it mandatory for foreign visitors entering the country to have their trip insured with medical travel insurance, including coverage for COVID-19 implications. 

So while rates are rising, here are five ways to ensure you're getting the cheapest travel insurance possible – that way, you won’t be breaking your vacation budget at the cost of protection.

1. Do an audit of what's already covered

Many travel agencies and airlines offer free trip cancellation insurance or some form of COVID-19 emergency medical insurance, in order to attract more travellers to book with them. These policies tend to be basic, but they can save you money if you keep them in mind when buying additional insurance. Just be sure to read the fine print to understand the exact terms of the policy.

Some premium credit cards offer trip cancellation insurance if you charge your vacation to their card, but again, read the fine print to understand exactly what's considered a cancellation – companies may require medical documentation or proof to show why you were unable to travel. Other credit cards may also offer some medical coverage to cardholders and their dependents. 

Visit: The best travel credit cards in Canada

2. Buy a travel insurance bundle

If you’re travelling with your family, buy one insurance policy that covers everyone at once. And if you plan to travel more than once during the year, look into an annual plan or multi-trip policy – simply average out the cost of travel insurance per trip, and see if you'll be saving more. 

3. Talk to your healthcare provider

If you are a full-time employee, your employer may offer some travel insurance through your health benefits plan. This could also include all your dependents listed on your policy too. Be very specific about where and why you’re travelling to see if your policy covers medical emergencies and trip cancellations. 

4. Only buy travel medical insurance

Cancelling your trip would be expensive without trip cancellation insurance. In most cases, it would mean losing the entire value of that trip – but your loss will also be limited to the price of your ticket and bookings. In comparison, having a medical emergency can come with unlimited expenses, depending on how serious your illness or injury is. 

If you want to save on costs, you can choose to only buy medical insurance, covering what would likely be the most expensive type of emergency. Also, avoid unnecessary add-ons – you may be offered rental car protection, vacation rental damage protection, and the option to cancel your trip for any reason. While having these protections can come in handy, you also might not need this coverage. So consider the risks you're willing to take, and decline optional add-ons to keep your premium low.

5. Research before you book

When you book your flight, the company will often give you the option to buy travel insurance. It’s sometimes hard to measure if what they’re offering is in fact a good deal. By doing your research first, you'll be able to approve or decline their offer confidently. These policies are usually only offered at the time of checkout, and customers don’t have a lot of time to decide whether it works for them. 

The bottom line

It's important to understand the importance of travel insurance before you embark on your journey. We’ve all heard stories of uninsured visitors having to pay thousands of dollars extra due to emergency medical implications. Shop around, stick with a reputable insurance company, and make sure you’re getting the best protection possible. 

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