Is Anxiety Leading to More Travel Insurance Sales?

by Richard D'Ambrosio
Is Anxiety Leading to More Travel Insurance Sales?

Photo: Shutterstock.com

In a year marked by travel bans, numerous terrorist attacks, and a brutal hurricane season in the U.S. and Caribbean, travel insurance has received greater attention as consumers seek to protect their vacation-related financial investments.

More and more, travelers are expressing a heightened sense of anxiety, as the daily flow of media coverage and internet postings focus on the disruptions that frequently made headlines.

From Nov. 9, 2016 to the same date this year, travel insurance online aggregator Squaremouth says it has seen a 33 percent increase in inquiries for Cancel for Any Reason coverage, according to Steven Benna, marketing specialist. The year before that, the same period saw a 28 percent increase, Benna said.

“We’re definitely seeing faster growth. The increase in prominence of events has played a role.” Benna at Squaremouth said that searches by customers specifically for the words “hurricane” and “terrorism” are up 59 percent and 49 percent respectively during the Nov. 9, 2016-2017 period.

“In general, we see an increase in inquiries (and general awareness of travel insurance) whenever there are major global events such as hurricanes, terror attacks, pandemics, etc.,” said Bob Chambers, head of operations, Generali Global Assistance.

“That said, it’s hard to gauge if there is an increase in anxiety among travelers generally. One of the challenges for insurers is that we can’t cover ‘fear of what might happen.’ Anecdotally, I think we’ve all heard people who say something to the effect of ‘I won’t travel to X place because it’s not safe.’”

According to the U.S. Travel Insurance Association (UStiA), Americans spent nearly $2.8 billion on all types of travel protection in 2016, the most recent year for which the organization has data. That was up 19.1 percent from 2014, the last year UStiA measured American travel insurance purchases.

“I think the increase in the number of people buying travel protection is a combination of several things. As the economy improves we have seen steady increases in the leisure travel over the past several years.  At the same time, there’s a growing awareness of the types of things that can disrupt travel – extreme weather, natural disasters, airline delays – I think those factors, combined with consumers’ desire to protect their travel insurance investment is what is driving the increase,” said Megan Cruz UStiA executive director.

CFAR provides maximum flexibility for cancellations
“That is where Cancel for Any Reason (CFAR) coverage comes into play,” Chambers said. “It is a good alternative for people who want the maximum flexibility to cancel their trip, regardless of the circumstances.”

“In light of an increasingly unpredictable travel environment, Cancel for Any Reason coverage remains an important piece of a diversified travel insurance program," said Dean Sivley, president of Berkshire Hathaway Travel Protection.

Cancel for Any Reason insurance covers a consumer’s anxiety about traveling to a destination if they have a change of heart, while regular insurance will only allow a traveler to cancel if either a weather event has made a destination/accommodation uninhabitable, or a terrorism event has been declared by a verified government entity after insurance was purchased.

To accommodate for a traveler’s anxiety, rather than an actual event, Cancel for Any Reason requires the traveler insure 100 percent of all pre-paid travel expenses that are subject to cancellation penalties or restrictions, Benna reminded agents. As a result, premiums can be about 40 percent more expensive than typical insurance.

Agents should explain to travelers that Cancel for Any Reason insurance will pay 50-100 percent of the non-refundable cost of their trip, and that they have to cancel a minimum of 2-3 days before departure. Canceling at the last minute won’t allow them to obtain a refund. Additionally, some CFAR plans have maximum payouts.

Suggest trip cancellation insurance
Another alternative, Benna said, is adding trip cancellation insurance, which will only tack on another 5-10 percent more in premiums, but covers 100 percent of the non-refundable cost of the trip in the event of a covered reason, like a hurricane. It would not, however, cover reasons more common to traveler anxiety, like political unrest.

Benna reminded agents that if a traveler does not purchase trip cancellation insurance when they initially book a trip, they have a deadline of anywhere from 14-30 days after their first trip deposit is made to qualify.

  1
  0
Tip of the Day
Daily Top List

Best Things to Do in Sheffield, UK

1. Holly Hagg

2. Will4Adventure

3. Crucible Theatre

4. Rivelin Valley Nature Reserve

Source: TripAdvisor

TMR THIS WEEK
http://services.travelsavers.com/AMGService.svc/REST/GetImage?ImageID=790331bd-ff88-e811-853f-782bcb667b27

Artificial Intelligence is the Future the Jetsons Told Us About

Customer loyalty is the ultimate reward for travel agents who tap into artificial intelligence. While still early in its application to travel, many companies are quickly realizing the need to implement AI to improve their travel customer service and trip planning.

TMR Recommendations
Top Stories
Million-Dollar Travel Agents Share Their Sales Tips
Million-Dollar Travel Agents Share Their Sales Tips

What does it take to get to a million dollars in travel sales? Focus. Learn. Then get out there and sell it.

Millennials Offer Travel Agents the Best Opportunity for Client Vacation Social Media Posts
Millennials Offer Travel Agents the Best Opportunity for Client Vacation Social Media Posts

Younger travelers are more likely to curate the best pictures and experiences on vacation, generating higher quality social media testimonials for travel agents.

Six of the Best Bucket List Travel Options for Empty Nesters
Six of the Best Bucket List Travel Options for Empty Nesters

Study shows that as the last child flees the coop, Baby Boomers plan to take even more vacations – without the kids. Here are the top spots to book for them.

After Settling with States, Travel Insurance Companies Begin to Standardize Practices Nationally
After Settling with States, Travel Insurance Companies Begin to Standardize Practices Nationally

Settlements with state insurance commissioners are moving travel insurers closer to common, written industry practices, but the impact on travelers and agents is uncertain.

Accompanying Group Travelers Isn’t a Simple Decision
Accompanying Group Travelers Isn’t a Simple Decision

Should you stay, or should you go? Travel agents offer their opinions about whether it’s best to accompany groups on the trips they book or not.

Headquarter Happenings: Travel Leaders Rolls Out ‘Game Changer’ for Its Agents
Headquarter Happenings: Travel Leaders Rolls Out ‘Game Changer’ for Its Agents

In addition to a new partnership with American Express, Travel Leaders Network capitalizes on its investment in Vacation.com consumer website, and launches a website to help agency owners find potential buyers.

News Briefs
TMR Report Cards
Advertiser's Voice
Advertiser's Voice: Norwegian Cruise Line