For the layperson, travel insurance can be complex—a myriad of clauses and policies—let alone in the time of COVID. As part of ASTA’s Global Live, three experts shared their advice for travel advisors and how to help your client select the right product.
1.You don’t need to be an expert.
While it’s important to be able to provide clients with general knowledge about insurance coverage, travel advisors are generally not licensed to sell travel insurance. (Read more on that here.)
“If there are in-depth questions coming from a client, it’s best to reach out to your preferred travel insurance provider and utilize the resources those companies provide,” said Scott Adamski, head of field sales and licensing for Travel Guard Insurance.
Instead of getting bogged down in the tiny details, get an overall grasp for what a handful of products have to offer, such as the description of coverage and price.
“If you do that you’ll sell more and your client will trust you more on the product, like if you’re a cruise specialist and know one or two brands really well. Get a handle on what we’re offering – anything outside of the detailed language of our policy,” said Kevin Herlihy, national/key accounts sales manager for Travel Insured.
2. Different country requirements are here to stay.
Suzanne Lustig, director national accounts for Allianz Global Assistance, said one question coming in every day is how advisors can handle requirements for various countries. Aruba, for example, is mandating their own insurance in an effort to shield the cost from their hospitals.
“My advice is to understand what’s required of that destination at time of booking, and look at preferred partner plans and speak with the sales team to help you navigate it, because that scenario is not going away any time soon,” Lustig said.
As Herlihy pointed out, you have “understand what the country is requiring you to buy and work our products around that. They’re not having you buy Cancel for Any Reason. It’s covering minimum medical to make sure if you get sick while you’re there, you have money to pay for that – it won’t have baggage, evacuation and all those other services.”
He added, “We don’t want anyone thinking if they buy a plan from Aruba they get the same coverage as if they buy from one of us, it is very minute and doesn’t have ancillary benefits. Understand what they have and make sure your client is still covered.”
Other differences, from country to country, are whose borders are open to Americans – and even those are constantly in flux.
“Country changes are ever evolving,” Adamski said. “Bahamas came out and said no Americans, and within a week they changed direction, so you have to write this in pencil because it changes all the time.”
Each of the companies’ webpages will have up to date information.
3. Expect an increased interest in Cancel for Any Reason.
Unsurprisingly, there has been an influx of requests for Cancel for Any Reason policies (known as CFAR).
“Prior to COVID, CFAR was doing 10-12% and by April we’re seeing almost 49-50%,” Herlihy said. “I think that will stay along because it will help travelers’ confidence. It’s worth it to spend more money on the policy.”
There can be confusion around CFAR policies. At Travel Insured, Herlihy said the company allows for up to 75% of your loss back, but the misunderstanding is that the travel insurance will pay 75% of the loss not 75% of the trip cost.
Allianz’ version of CFAR is called Cancel Any Time, and “we allow clients to cancel any time prior to departure, and allowances have been made so all of our other plans include COVID coverage,” Lustig said.
Adamski said there needs to be more awareness on the product, as it costs an additional premium and has a shared risk with clients so a lot of plans are 50%-75% of a loss.
Overall, he said “When I started 20 years ago we had single digit acceptance by US travelers, now it's in the 30% range. I think there’s going to be a surge. I think it will be as instrumental as hand sanitizer and masks as they’re adventuring post-COVID.”
4. Supplier bankruptcy and insolvency.
“When your client purchases a supplier insurance plan it typically never covers default, so consider third party insurance. Each of our companies have a difference way of managing this, we can walk you through it,” Lustig said.
“Unfortunately we’ve seen some defaults and potentially there will be more, so it is vitally important to align third party provided that has full protection because I think that will be more important as we move forward and some companies are financially stressed” Adamski agreed.
5. Rely on the pros.
Now more than ever, there’s an extra layer of complexity to travel insurance as everything is so fluid and dynamic.
“This environment we are in has made the insurance conversation that much tougher. All advisors realize when times are hard like this, that this is when partnership matters, reach out to us,” Lustig said. “Every plan has terms and conditions, that’s why you’re partnered with us, we’re here to help you navigate through that.”
“We still see some advisors not offering travel insurance, I think they may feel overwhelmed as there’s a lot of legalese. You’re not licensed to be an expert, if there’s a specific question you can reach out to us,” Adamski said.
“Reach out to any of us and we’ll be more than willing to help you understand to make sure your client is covered 100%,” Herlihy said. “We want to make people feel more comfortable buying travel insurance.”