Why is Travel Insurance Costlier for the US & Canada?

Without a doubt, travel insurance is the most effective way to secure your trip. However, when it comes to developed countries like the US or Canada, people are often surprised by the high premium costs of their trip insurance.

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* Price shown is for a 15 day trip to UK with a 1 lakh dollar coverage for an adult of age 25 years

Here’s Why Travel Insurance for the US & Canada is Expensive

Awareness about travel insurance has certainly increased since a few years, however, the cost difference between some plans may discourage you from buying a plan altogether.

While overseas travel insurance for several Asian and African countries is pretty affordable, customers are often discouraged because of exorbitant travel insurance premiums for countries like the US and Canada. Let us understand why:

High Cost of Living

America's high cost of living is one of the top reasons behind expensive insurance plans. Not just the US, Canada is a well-developed nation with a high standard of living. From meals to daily utilities, sustaining your stay here is an expensive task.

Travel insurance companies in India know this and need to provide appropriate coverage so that you are protected at all costs. In case of an emergency, expenses will reflect the local costs, such as medical costs or legal expenses in case you're liable to a third party while on your trip. Since the risk is greater, they are bound to charge you more.

Expensive Healthcare

Like most developed countries, Canada and the US have very different healthcare systems. Unlike ours, there are many factors including administrative differences, billing requirements and rising drug costs that have resulted in very high healthcare bills. In fact, medical debt is among the top reasons for bankruptcy in the US.

What may cost you a few hundred dollars in other nations will cost you four to six times more in these countries. These countries even have a higher ambulance charge which may be offered at significantly lower prices in other prosperous nations. To battle these high costs, your travel insurance for the US or Canada will be appropriately higher too.

Lack of National Healthcare System

Medical expenses for sudden illness, accidents, evacuation or repatriation are among the most important components of any travel insurance policy. Unlike many other nations, these nations often lack a national healthcare system.

The overall cost of healthcare is very high, from very high consultation fees by doctors to daily hospital expenses. Diagnostic tests, and surgical procedures are pretty expensive, even compared to European countries. Therefore, buying a travel insurance plan from India to such places will certainly cost a lot more.

Unlike many European countries where drug prices are regulated by the government, the US sees little regulation. Private insurers negotiate these prices with the manufacturers but it is still pretty costly.

Tips to Cut Costs on your Travel Insurance Plan

Whatever may be the reason for your trip, you can easily find a plan to suit your budget without compromising on the protection:

  • Opt for flexible plans. Make sure to buy a plan that lets you customise through add-ons.
  • You will save money by buying a basic coverage plan without compromising on specific coverage.
  • Always compare different plans to find the best deals. You can easily buy travel insurance online at lower costs once you've realised which ones offer the best benefits at a lower cost.
  • Avoid buying your policy in a rush. Especially if you feel there are little to no details required before buying a plan, don't simply buy it without reading the terms first. Chances are that the coverage is limited or it has high deductibles or sub-limits on important components.

Wrapping it Up,

Travel insurance companies in India understand the risks that we can face while visiting an expensive country abroad. From sudden medical emergencies to financial expenses due to lost luggage or liability expenses, it can seriously disturb our budget. For students, backpackers or those on a budget, it is important to invest in a plan that offers proper coverage. In such a case, spending a few extra hundred shouldn’t stop you from availing of the protection offered by your insurance policy.

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