Travel Insurance Pre & Post Covid
Prior to 2019, travel insurance, particularly policies with health coverage, may have seemed a luxury. These policies, which cover such possibilities as a death in the family, injury, or illness, have offered the peace of mind of not losing large outlays when the unexpected strikes and we have to cancel a trip. But if you’re like me, you too often convinced yourself it wouldn’t happen to you. Then COVID hit.
I can say that I had to cancel two major trips in the early months of COVID and spent as many months trying to untangle the mess of reservations, flights, and expenses. Had I purchased a travel insurance policy, my worries and my costs would have been negligible. Even before the pandemic, as travel insurance expert Brad Niederman, Niederman Insurance Agency, puts it, “travel insurance has historically been one of the least considered insurance for most consumers, yet is really one of the most needed in today's environment.” But as vaccines, boosters, and treatments have developed and the world has reopened, travel insurance has boomed.
Prior to the pandemic, U.S. flight travelers numbered between 2 and 2.5 million per month. Those totals, of course, dropped dramatically during the worst of COVID, with 2020 showing a dip well below 500,000 monthly airline travelers. But, according to TSA.gov data, “As of March 2022, U.S. travel was only roughly 5% below 2019 levels.” This sharp increase in travel demand has left airlines scrambling to fill staffing voids caused by COVID and to quickly train staff. This has led to cut backs on flights and airports that have been overwhelmed, which has resulted in cancellations and delays. With the commensurate increased cost of tickets–some business class tickets having nearly doubled in price–customers are hungry for coverage, particularly in this post-COVID landscape.
As Joe Lesher, CEO of TME Travel Insurance , notes that, “prior to COVID approximately 20% of travelers purchased travel insurance, and today its estimated that 70% are seeking some type of protection.” While it may seem that travel restrictions are a thing of the past as we boost ourselves again and again, it’s important to know that many countries currently require a minimum of travel insurance to help defray a country's costs of coping with travelers who have contracted the disease. CNBC reports, as of February 2022, that “Sixty countries require tourists to have a minimum level of travel insurance. Angela Borden, a marketing strategist for Seven Corners Insurance, emphasizes that our health insurance may not cover us in some countries and that providers may demand up-front payment before treatment.
Travel insurance has filled the void left by other coverages, offering policies that defray costs on medical expenses, quarantine stays, cancellations, and more. Joe Lesher, TME’s CEO, also says, “A comprehensive trip protection plan that includes Trip Cancellation/Interruption, Trip Delay, Medical Expenses and Emergency Evacuation that covers COVID, as well as protection for lost baggage and much more typically costs 4% to 8% of the insured trip costs.” Demand is high, with one study showing that of 11 million travelers in Australia who planned to travel abroad, 87% said they would purchase travel insurance. The most surprising result was among those under 30, a previously resistant group, 84% of whom said they would purchase a policy. The study concluded, “for the younger cohort, this represents a material increase where historically only around three-quarters of travelers under 30 took out travel insurance.”
The travel landscape is shifting and consumers are demanding more coverage in the face of pandemic realities. Some insurers have even responded with “cancel for any reason (CFAR)” policies and at least one insurer reports a 20% increase in the purchase of such policies. Experts emphasize that while restrictions are loosening, travel rules continue to shift. Lesher of TME adds, “travel insurance is more important than ever as we learn to travel with a lingering pandemic.” Therefore, if you’re one of those with wanderlust in the burgeoning world of 2022 travel, you should research your destination and seriously consider a travel insurance policy for the peace of mind it will bring and the money it may save you.
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Written by Ivan Young in partnership with Faxage online faxing service.