How to Calculate Trip Cost Correctly for a Travel Protection Quote

TLDR: When calculating trip cost in order to get the most accurate travel protection quote price, focus on prepaid, non-refundable travel expenses. 

Here’s something rarely heard from an insurance company: Your clients could be buying more travel protection than they need.

Okay, full disclosure: Your clients might be buying less travel protection than they need, too. The point is that you should only cover the insurable expenses associated with their trip. To do that you need to understand what trip costs travel protection actually covers, before your client buys a plan.

Trip cost matters so much because some of the most important benefits in our plans, such as Trip Cancellation and Trip Interruption, cover a percentage of your client’s trip cost.

For example, if your client needs to cancel their trip for a covered reason they could be reimbursed up to 100% of their insured trip cost. If their trip is interrupted for a covered reason, it’s even better – up to 150% of their trip cost could be reimbursed, which is helpful in case there are extra costs getting your client back on their trip or back home.

Other benefits, like Baggage or Medical and Dental, cover only up to a set dollar amount, which is not connected to the trip cost.

The travel insurance coverages that are dependent on trip cost can reimburse your clients for things they’ve already paid for. It won’t pay for things your client plans to spend money on but hasn’t yet, or situations where there are other ways for your client to get their money back.

Here’s a breakdown of common trip costs and whether they can be covered by travel protection. If it’s in the “not covered” list, don’t include it in the trip cost calculation.

Pay close attention to the first item on the “Not covered” list. If your client already paid for a plane ticket or hotel room, and it’s fully refundable, insurance will not cover that cost. The hotel or airline is responsible for the refund.

In addition, if a prepaid expense is partially refundable, insurance will only cover the difference between what your client paid and what they were refunded.

So for instance, if the cruise line refunded your client $5,000 on a $7,500 river cruise, insurance will cover the $2,500 difference.

Explore refund policies for airlines

Here’s what you do with this information.

Before you get a travel protection quote, add up how much your client already paid for each of the things in the first column. Include trip costs for all travelers that are covered by the travel protection plan.

Whatever that number is, you should enter it as the total trip cost when getting a travel protection quote – not a higher number that might include refundable or non-prepaid expenses.

To be as accurate as possible, you may need to dive into the supplier refund policies. It could save your clients a little money on travel protection.

When calculating trip cost in order to get the most accurate travel protection quote price, focus on prepaid, non-refundable travel expenses.

Your client might be surprised by how low that number ends up, and the value a travel protection plan can have when they cover only the expenses that need to be covered.

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