Your travel insurance premium explained
Find out how we work out the cost of travel insuranceWhere you're travelling to
Where you're going is a big factor on the cost of your travel insurance. Mostly, it comes down to how expensive medical treatment is in your destination country: on average, medical expenses in the US are much higher than in Europe. We also consider the distance. If you had a serious accident and needed to be flown home, the farther away you are, the more it would cost.
So if you're going abroad, you'll likely need to pay a bit more for your cover than if you're caravanning in Cardiff.
How long you're going for
This is because the longer you're away, the more likely it becomes that you'll have an accident, need medical treatment for an illness, or lose some personal belongings.
Who you're travelling with
The people you go on holiday with can also have an impact on the cost of your travel insurance. Insurers will consider the age and medical history of everyone in your group, so adding grandparents to a group travel insurance policy could put the price up, even if they're in good health.
Sometimes it pays to travel in a bigger group though; with LV=, you'll get a discount and increased benefits for group travel insurance.
Medical conditions
If you've got a clean bill of health, you're likely to pay less for your insurance than someone with a medical condition.
Some travel insurance companies, including LV=, offer cover for people with pre-existing medical conditions, depending on the severity of the problem – but the cost of cover might be higher.
What activities you'll do on holiday
While most travel insurers tend not to cover you for extreme sports, many will include some cover for the most popular kinds of leisure activities, such as snorkelling, cycling – even bungee jumping!
It normally costs a bit more to cover certain activities - like skiing and other winter sports- because there's a greater risk of you having an accident or injuring yourself.
Currency fluctuations
Unfortunately, there’s not a lot you can do about the global markets. When the pound is weak against foreign currencies, it costs insurers more to settle claims with companies or services based overseas. The increase in claims cost is then reflected in your travel insurance price.
The rising costs of medical treatment
As medicine becomes more advanced, doctors and surgeons are able to offer a variety of treatments to get you fighting fit. Sophisticated healthcare comes with a hefty price tag though, so while the GHIC can reduce the cost of medical expenses in Europe, it can run into the hundreds of thousands of pounds in other countries around the world.
What's going on in the world
From acts of terrorism and industrial strikes to natural disasters (remember that volcanic ash cloud in 2010?), factors outside your control will often impact the price of your travel insurance.
Legislative changes
Governmental changes to taxation will also push up the price of your travel insurance. Insurance Premium Tax (IPT) is a tax on general insurance premiums, and on travel insurance, it's particularly high: 20 per cent on every policy sold.