Severe weather, terrorism, virus outbreaks – there are plenty of risks travelers face these days, all of which can derail travel plans. And while awareness of travel protection options continues to increase, travelers might still not always readily think insurance is an affordable option for them.
NB This is a viewpoint by Beth Godlin, president, Aon Affinity Travel Practice.
That is why the travel industry should seize the opportunity to do the math for travelers and measure the total investment for their trip against the nominal cost to cover it with travel protection.
Historically, about one-third of travelers choose to buy travel insurance. But the trend lines are slowly changing: the number of people covered has increased more than 17 percent from 2012, and the number of plans sold has increased by more than 15 percent, according to the most recent US Travel Insurance Association (UStiA) market report.
We do expect these numbers to continue to evolve, because today’s travelers have different concerns. Severe weather or flight delays are less of an issue - instead, travelers are now more worried about incidents involving human intervention and interaction, such as terrorism, the spread of the Zika virus and medical emergencies that require costly evacuation.
Furthermore, cyberattacks and technology meltdowns are among top issues against which travelers now need to protect themselves and their investment in the trip.
So for the travel industry, it’s valuable to remind ourselves just why travelers commit to travel insurance and how we can adjust and fine-tune our offerings to ensure we’re delivering appropriate services to consumers.
Here is a guide to offer help for the top five reasons to get travel protection:
1. Because unforeseen issues cause travelers to cancel a trip or return home early
What travelers face: Travelers are often forced to cancel a trip before departure due to unforeseen circumstances, such as a sickness that requires medical attention. But there are also risks to travelers and their investment after they depart.
How we address the issue: An illness during the trip or having to go home early and incur extra expenses to change flights can be supported through trip interruption coverage. One of the primary benefits of travel protection plans is reimbursement of non-refundable expenses. In fact, the US Travel Insurance Association found that programs including trip cancellation/interruption benefits accounted for more than 85 percent of travel protection purchased in 2014.
2. Because life happens at the most inopportune times and forces travelers to cancel their plans
What travelers face: Sickness is a big reason, but not the only reason, why travellers cancel their plans. Other factors that can impact travel plans include an accident en-route to departure or a job loss in the weeks before.
How we address the issue: Many plans provide trip cancellation for these unforeseen, but valid, reasons. Protection plans with cancel for any reason coverage (CFAR) can help travellers get some form of reimbursement of the non-refundable trip costs for a wider range of issues.
3. Because travelers are worried about how costly medical expenses will be handled in the event of a minor accident, sickness or an emergency
What travellers face: No-one wants to get sick or have an accident, especially during a dream vacation, but it happens. It could be a minor sickness where a visit to the cruise ship doctor can help, or it could be more severe and require medical attention or even an emergency evacuation.
How we address the issue: When traveling far from home, overseas or to a remote destination, emergency evacuation coverage is recommended because existing health insurance or Medicare often will not suffice for the high cost of care overseas. These types of medical benefits are often included in travel protection plans but it is important that the plans can be customized by the travel suppliers to match the specific trip, destinations and traveler demographic.
4. Because travelers are worried about protecting the goods traveling with them to, from and during their trip
What travelers face: If a remote control can go missing for days at home, what’s to prevent the loss of baggage going 1,000 miles through two airports and onto a ship? In the first six months of 2015, the U.S. Department of Transportation saw more than one million mishandled baggage reports filed with domestic airlines.
How we address the issue: Baggage delays, loss, damage and theft are an innate risk when traveling, but many travel protection plans include benefits that range from providing a little money to pick up some clothes for the night, to offering thousands of dollars for more significant losses.
A homeowner's or renter’s coverage can also apply in certain travel circumstances, but the loss may be lower than the deductible, and it may be less than desirable to submit a claim. It’s a big reason why travel protection that typically covers belongings throughout the course of the vacation is more cost-effective.
5. Because travel insurance comes at a reasonable value
What travelers face: The non-refundable amounts for big ticket vacations, such as an extended cruise to exotic ports, a luxury land tour or a multi-city international trip, can be significant. After all, these vacations may be paid for far in advance, and there may be more opportunities for things to go wrong.
On the flip side, should travelers protect that short-haul flight that costs $400?
How we address the issue: While the risk of losing the cost for a short-haul flight might not be life-changing, big ticket vacations are prime for travel protection. In either case, many travelers would prefer to have some level of protection if it’s easy to get and priced competitively.
Delivering travel insurance services at the right value is something the industry will continue to do and where offerings will evolve as travelers’ needs change.
A significant advantage to consumers of having protection plans developed exclusively for, and sponsored through, travel suppliers such as online travel agencies, cruise lines and tour operators, is that these plans are usually available for easy purchase during the travel booking.
Those plans are also customized, so the benefits and coverage are generally better suited to the type of travel being booked. It’s more of a one-stop-shopping model for travelers that is highly customized.
The takeaway
All vacations and travelers have their own nuances, so as an industry, we should encourage consumers to ask plenty of questions of us - their agents, their tour operators and travel insurance providers - to ensure they know about the many levels of protection available for what life and travel can bring.
A relatively small investment in protection can benefit travelers' safety and peace of mind, because we simply don’t have a crystal ball to know what the future holds.
As the range of issues impacting the travel industry continues to widen, protecting travellers’ time, expenditure, possessions and well-being is of the utmost importance.
NB1: This is a viewpoint by Beth Godlin, president of Aon Affinity Travel Practice. It appears here as part of Tnooz's sponsored content initiative.
NB2: For more travel tips and insight, visit its blog.