If you asked the average travel agent and traveler to describe the difference between travel protection and travel insurance, you probably would get as many different answers as the different individuals you spoke to.
Posing the question to Google, you won’t find easy answers. Travel Insurance Review, one of the highest results on Google’s Search Engine Result Page (SERP) for the question, directs the user to a page discussing the difference between travel insurance and travel assistance.
A page from the Generali Global Assistance website says, “Travel protection plans provide assistance services in addition to insurance coverages.” (Generali offers services like emergency assistance services, on-demand medical care, and identity theft resolution.)
But depending on who is offering the coverage and how they are applying it, definitions abound. “People are confused about travel insurance,” said Geoff Millar, co-owner of Ultimate Travel, in Gilbert, Arizona. “There are so many types out there, and each one can be a little different in what they do or don't cover.”
“I think many agents are confused about insurance, let alone clients,” said Helen Prochilo, owner, Promal Vacations.
A recent article by consumer advocate Christopher Elliott points out the level of confusion.
“Travel insurance is an actual insurance product underwritten by large insurance companies and regulated by state insurance agencies,” Elliott writes, while trip protection plans have traditionally been much riskier propositions for consumers, and could be full of exclusions.
A trip protection plan – which could be offered by an online travel agency, a tour operator, or other travel company – might only cover a portion of a trip and not reimburse a traveler for a cancellation, instead issuing a credit for future travel.
Bud Geissler, Travel Insured’s national group sales account manager, has been in travel for more than 20 years, including 18 years working with student group tours – and he can attest to Elliott’s main points.
“The massive disruption on 9/11 started the travel and tour industry down a path of product innovation,” Geissler told Travel Market Report. Since that day, he has witnessed both tour operators and insurance companies realizing there were gaps in coverage that an event like grounding all airlines didn’t cover. Over time, the industry began to layer in more “travel protection” that wasn’t related directly to reimbursing someone for a canceled tour or airline tickets they couldn’t use.
“While we might provide a refund to a traveler because flights were grounded, what about elements of a trip that weren’t part of a tour package, like admissions to museums, or tickets for a musical or play?” Geissler recalled. As insurance and “protection plans” evolved, the differences weren’t always made clear to agents and consumers, Geissler said.
In his recent article, Elliott noted how, in many cases, “protection plans were backed by tour operators instead of highly rated insurance underwriters. So, if a tour operator ran into financial difficulties, it might mean your trip ‘protection’ was worthless.” Consumers are still digging themselves out of personal experiences that may have incorrectly influenced their understanding of the terms.
Another contributing factor, Millar believes, is that because travel insurance is well-regulated, many travel insurance companies want to dissuade travel advisors from getting too deep into the details of insurance plans.
“There have been many issues between agents and clients concerning travel insurance – what it covers or does not cover. Some of those issues have led to lawsuits,” Millar said.
There are distinctions
So, what are the differences? For traditional insurance companies “the simplest answer is that travel protection is inclusive of insurance,” said Joe Mason, chief marketing officer, Allianz Partners.
“Let’s start with travel insurance. If you’re coming over to visit me in Paris, and something comes up and you can’t make the trip, you’re glad you have travel insurance, because you would be reimbursed if your cancellation is due to a covered reason,” Mason said.
“Now, once the plane leaves the runway, the broader elements of travel protection come into play,” Mason said, continuing to use his Paris example to describe the differences.
“You get to Paris, but you get sick a few days in, and you need to go to a hospital. Or work says they need you back, and you have to return home earlier than your original return date. Or there is an unsafe situation, and you need assistance on the ground. All of these would fall under travel protection.”
Mason believes consumers are increasingly viewing broader “travel insurance” services as part of their overall “travel protection coverage” because of products like Allianz’s TravelSmart app.
“TravelSmart has helped us reveal the benefits because they are more readily accessible, have more functionality and utility, right there in the traveler’s hand,” Mason said. “More consumers are understanding the value proposition goes broader.”
Allianz works through the media, influencers, and travel agents to better educate consumers about travel insurance in general, said Dan Durazo, Allianz director, marketing and communications, USA. “It’s not a fast process,” he said.
“Do we think that we have completely educated travel agents and consumers? I don’t think so,” Mason added. “I think there is a lot more room for us to expand the conversation.”