Travel Agents Should Not ‘Sell’ Travel Insurance

You may find that headline surprising, and I confess upfront that it was just clickbait. In fact, I do strongly encourage every travel advisor (using the new ASTA terminology here) to promote the purchase of travel insurance by every person to whom you sell travel services. But, I don’t want you to use the term “sell” when you do it.

That may seem like a silly and pointless distinction, but here is why it’s not. ASTA and the U.S. Travel Insurance Association (UStiA) have been working for years to induce the states to adopt a model approach to the regulation of travel insurance. Only a few states are holdouts at this point, so the project has been a huge success. The goal was to avoid the need for travel advisors to register in multiple states, undergo various kinds of training and identification protocols, and pay fees to be licensed as “insurance agents” under the existing rules in effect virtually everywhere.

As ASTA put it, back in 2016, “The new travel insurance standards are designed to permit travel agencies and agents to do what they do today, without needing separate licenses … [W]here the new standard is in effect, travel agencies and agents may ‘offer and disseminate’ travel insurance to those states’ residents without needing their own license.”

Some state variations remain, so it is important to check if you are providing travel insurance information in a state whose regime is unfamiliar. Washington state is one place where agencies are still required to be licensed, even though individual advisors are not.

Thus, according to ASTA, travel advisors and travel agencies operating under their travel insurance provider’s license may do the following:

• Provide their customers with general information about the insurance coverage, including a description of coverage and price.
• Process applications and collect premiums from insurance customers.
• Refer a consumer with more specific questions regarding coverage and benefits to the travel insurance provider.
• Receive compensation for these activities.

Of course, it’s not quite that simple. According to ASTA, agencies remain obligated to help the insurance providers deliver certain consumer protections:

• The travel insurance provider certifies that each travel advisor offering its insurance has taken a (short) training course and does not have fraudulent or criminally dishonest background.
• The travel insurance provider or travel advisor provides to the customer material terms of coverage and the provider’s contact information.
• The travel insurance provider maintains a register of travel agencies offering its products and the states where it is offering those products.
• The travel agency or advisor avoids acting as a licensed insurance agent, which includes restricting the travel advisor from providing a risk assessment or interpreting an insurance policy.

That last point is especially important and is actually a great benefit to travel advisors. It is not the job of a travel advisor to provide risk analysis or interpretations of complex travel insurance policies. Travel insurance is similar to all other insurance in that the policies are based on precise definitions, terms of inclusion and exclusion, and other limitations. These complexities should be left to the insurance experts, an approach that spares the travel advisor a lot of work and a lot of risk.

That said, I close by emphasizing that every travel advisor, in connection with every sale of transportation (air, tour, cruise, rail, car) should be certain to present the client with information about available travel insurance coverage. If the client declines to receive the information, the advisor should, at a minimum, make a notation in the sale record that the information was offered and the option to buy the insurance was declined. It is even better – much better – to get a signed waiver or at least an email from the client saying “thanks but no thanks” for the insurance option. ASTA offers its members a waiver form at ASTA.org.

Most people are optimistic about their future travel plans and often don’t want to think or talk about what could go wrong. Such conversations can be challenging for the travel advisor, as well, but you must learn how to raise the subject and encourage every client to buy protection. If they want to get into risk evaluation or a technical discussion of the coverage, connect them with a representative from the insurance provider to present that information. They want the sale to go through as much as you do, so it’s in your mutual interest to work together to get it done or make a record of the decline. If you succeed, you make more money from the sale. If insurance is declined, and a proper record is made, you can rest easy that you did what you could and will have no liability when the client has memory failure later about whether insurance was offered.