For many consumers, the more expensive a vacation is, the higher likelihood they will purchase travel insurance for fear of losing a large personal investment.
But according to records from Generali Global Assistance, average insured trip costs declined 19 percent in 2017, indicating a greater sense of the utility for insurance in more situations, a trend that likely reflects the large number of highly publicized events that disrupted travel in 2017.
For the year ended Dec. 31, 2017, the average cost of a trip that travelers insured was $1,883, compared to $2,248 in 2016, Generali’s travel insurance division said. As a result, the average premium also declined from $169 per trip in 2016 to $139 per trip in 2017.
The average number of people insured on each plan remained unchanged at 1.75 people, as did the average trip length which held steady at 9 days per insured trip. Consumers may, however, be waiting longer to purchase travel insurance, Generali said, as the average days between trip purchase and departure dropped slightly from 88 days in 2016 to 81 days last year.
Disasters raised consumer awareness
The company believes that the large number of natural disasters and manmade events disrupting travel last year played a large role in greater interest in travel insurance across a broader spectrum of vacations.
“As these types of events continue to become more commonplace, travelers will continue to show more interest in protecting their trip investments,” said Chris Carnicelli, CEO, Generali Global Assistance.
"As travel insurance and its myriad benefits become better understood, people are choosing to insure trips at a lower price point than they did in the past. This is encouraging to see as we, and the industry at large, have placed greater emphasis on transparency to clear up misconceptions that surround travel insurance,” Carnicelli added.
On average, Generali saw claims on medical, evacuation, and repatriation services rise by 78 percent last year, compared to 2016. Additionally, the company found that, in 2017, the number of insured cruise trips decreased by 13 percent while insured air travel trips rose by 27 percent.
Vacation rental insurance trends remain steady
Generali also found that, in 2017, the total average trip cost for vacation rentals increased 4 percent (in line with average rental fee increases), and the average duration of stays at vacation rental properties remained unchanged at 6 days.
"Vacation rentals tend to be a high repeat business and therefore fluctuate very little in terms of average trip cost, as families tend to rent the same property for their vacations year in and year out," said Carnicelli.
Vacation rental travelers purchased insurance earlier than their general travel peers, with the average number of days between departure and purchase occurring 89 days and 86 days before the trips, respectively.
"The vacation rental industry is in the midst of tremendous growth, and competition for properties is fierce. We expect vacationers to continue to book their rentals further and further out to ensure they get the properties they want," Carnicelli added.
Finally, the top five destinations for travelers insuring trips with the company in 2017 remained unchanged from 2016. The Caribbean, Europe and U.S. domestic trips took the top three spots; while Alaska edged out Asia for the number 6 spot this year, bumping Asia down one. South America dropped out of the top ten and Hawaii edged in, according to Generali.