The COVID-19 pandemic has had a profound impact on Americans’ travel plans. New data shows that a growing number of travelers are turning to travel insurance to protect their vacation investments and health while traveling, including the younger generations not typically known for purchasing travel insurance.
According to a recent AAA Travel survey, one-third (31percent) of U.S. travelers say they are more likely to purchase travel insurance for their trips planned between now and the end of 2022, specifically due to the pandemic.
“Travel insurance is relatively inexpensive for the large amount of peace-of-mind it affords, and that’s more valuable than ever in light of the pandemic,” said Debbie Haas, vice president of Travel, AAA—The Auto Club Group, in a press statement. “Americans have seen how valuable travel insurance can be in protecting their vacation investment and health, and are prioritizing this purchase now more than ever.”
In addition, according to insurance experts at International Citizens Insurance, they’ve seen new trends across the industry since the beginning of the pandemic last year. Among the trends is an upsurge in younger people interested in obtaining travel insurance—this kind of insurance is preferred by Generation Z (up to age 24) and Millennials (age 25-40). Another pattern is younger travelers opting for “cancel for any reason” policies, to give them some certainty if things go wrong, notes International Citizens Insurance.
“People at a younger age are now seeking out travel insurance. There are more people in the 25-44 age group who are investing in travel insurance now than before the pandemic began, and the age group below that too, from age 18 up,” says Joe Cronin, president of International Citizens Insurance in a press statement.
Health and safety also rank as top concerns for travelers of all ages when seeking travel insurance.
AAA notes that increasingly travelers want policies that protect against commonly covered reasons for trip cancellations and interruptions, as well as other travel-related incidents including change fees, delays or lost/damaged luggage, to name a few.
Most Popular Benefit of Travel Insurance
The ability to cancel a trip and get a refund is by far the most frequently cited benefit of travel insurance, notes the AAA study. Sixty-nine percent of travelers say this is most important to them when considering travel insurance for an upcoming trip. Since policies vary, AAA advises these travelers to look into travel insurance policies that include a flexible cancellation component, which could offer more options and protection in the event a traveler needs to cancel their trip.
Providers Adjust Plans to Meet Consumer Expectations
While travel insurance policies have historically not covered epidemics or pandemics, in response to shifting consumer expectations, some providers have begun introducing plans that cover some losses due to COVID-19 or other epidemic diseases. AAA offers policies that provide assistance and financial benefits if travelers get COVID before or during their insured vacation. AAA recommends travelers consult the expertise of a knowledgeable travel agent to help plan their trips and evaluate the various travel insurance options available on the market.
“And even though they understand their insurance premiums might be higher, there is a trend towards people opting for ‘cancel for any reason’ policies because they want to cover all the bases, whether they are deciding to move to a new country or to travel,” adds Cronin.
“This type of coverage, also known as ‘CFAR’ insurance, is an excellent option for travel insurance buyers who worry they may have to cancel their journey for a reason that is not covered by trip cancellation coverage and want to recover at least a portion of their expenses. In a world emerging from a pandemic, this preference makes sense for many people,” he adds.
Importance of a Travel Advisor
Also, it’s important to note that some international destinations may require visitors to carry travel insurance, to help cover any unexpected medical costs that may be incurred while visiting. A knowledgeable travel agent can help travelers navigate these and other evolving travel requirements.
The AAA Travel survey also found that six in 10 Americans (60 percent) see the benefit of working with a travel agent to plan their upcoming trips. Travelers’ top benefits of working with a travel advisor reflect the important role they play in today’s more complex travel environment, including:
- To save time when researching or planning a vacation (40 percent)
- For help with complicated new travel restrictions/requirements (34 percent)
- To find the best deals (33 percent)
“Travel insurance options vary greatly, but a knowledgeable travel agent can help you navigate through those complexities,” continued Haas. “A trusted travel advisor serves as your advocate before and during your trip. Partnering with a travel advisor to review your travel insurance options offers another level of protection, so you can focus on making lifelong vacation memories. Our research shows that discussing travel insurance with our travel advisors increases traveler satisfaction. It’s most beneficial to purchase travel insurance when booking a trip, but coverage can also be added later prior to travel.”
For more information, visit aaa.com/travel and internationalinsurance.com/trip-insurance/cancel-for-any-reason.
Also, check out, “What’s Next for Travel?” And for more travel news & trends, click here.
