Sell Trip Insurance for Peace of Mind, Yours & Theirs
by Dori SaltzmanThis is the first in a three-part series on the ins and outs of selling travel insurance.
Protecting clients’ vacation investments and giving them peace of mind are the primary reasons travel agents should be pushing trip travel insurance, say those who do. Yes, travel insurance sales can create a welcome stream of commission income, but protecting clients is the agent’s first duty.
But travel insurance is complicated, so selling it isn’t particularly intuitive for agents, and explaining it to clients can be time-consuming. “It took me more than 20 years to figure out how to sell insurance,” one veteran agent told Travel Market Report.
How much time should you spend on the sales process? How much insurance should you sell? What kind of insurance? And to whom? When do you stop pushing?
Travel Market Report asked travel sellers for their insights into these and other basics of selling travel insurance. In the first of a three-part series, they discuss why they sell travel insurance and to whom, as well as the potential commission earnings.
Why sell travel insurance?
Just as an agent should put their clients’ needs first when recommending a travel supplier, making sure that clients protect their vacation investment by purchasing trip insurance is simply part of the job, travel sellers said.
Agents are responsible for their clients, said Sharon Emerson, CTC, ECC, owner of Cruise & Tour Planners in Seattle.
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“Most of the money that people spend on a vacation is pre-paid before they leave and most is non-refundable. Agents need to make sure clients understand that if something happens to them, they won’t be getting any of their money back if they don’t have insurance,” Emerson said.
That’s in addition to all the things that can go wrong while traveling that might force someone to cut their trip short or need emergency services, said Emerson, whose agency is a Vacation.com member.
Jill Evers of Travel and Transport in Omaha, Neb., said she offers travel insurance on every trip she sells. “Most tour companies, cruise lines, wholesalers have cancellation fees, and the closer you get to departure, the higher the penalty for cancelling.”
Peace of mind – for all
Clients breathe easier when they protect their travel investment with insurance, agents said. “Travel insurance gives you lots of possibilities when weird stuff happens, like volcanoes, or somebody eats a bad oyster,” said Guido Adefio, owner of Bethesda Travel Center in Maryland. “It’s good for everyone’s peace of mind.”
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That includes agents themselves, said Jane Lee Winter, CTIE, president of Town & Country Travel, a Signature member in Thousand Oaks, Calif. “I breathe a sigh of relief when I know they have insurance. It makes you sleep at night, not just yourself as a business owner, but the agent.
“And the client sleeps better when they know they’re protected,” she added.
Protect yourself too
Travel sellers buy more than a good night’s sleep when clients purchase trip insurance. They safeguard themselves too – and not just against the prospect of unhappy clients. Insurance shields both agent and supplier from clients who might sue to recover money they lost, said Winter.
Another plus: the commission agents earn on booked travel is often protected by the insurance policy, according to Winter.
“If they get 100% of their money back from the cruise or tour company, but we’ve put in 20 hours worth of work, we can bill that to the insurance company. They offer commission protection up to 10% of the product.
“It’s not full coverage, but it’s enough to know we’re at least going to get some compensation for the time we’ve spent,” Winter added.
Bottom line considerations
Commission levels on insurance sales are high – typically 20% to 28% from third party suppliers, and 10% to 12% from travel suppliers. So travel insurance sales can provide healthy revenues, some agents said.
Emerson has found that insurance commissions can really add up on group bookings. “When I sell groups, it comes to quite a nice total.”
For example, Emerson expects to earn about $400 per couple in insurance commissions for a group of seniors who are taking an Egypt river cruise that’s costing each couple about $6,500 for the cruise alone.
At Town & Country Travel, insurance commissions are “a significant income source,” said Winter.
But the real value of travel insurance commissions is motivating staff to sell the product, Winter said. She wants her agents to care enough to always sell the insurance, and it helps if they make money selling it. “I share a large percentage of the commission income with my staff,” she said.
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Adefio was less enthusiastic about the earnings potential, and he said his agency doesn’t treat insurance commissions as part of its income stream. “The amounts are so small that nobody is going to get rich selling travel insurance. We just consider that it helps cover the cost of processing it.”
Which clients to target?
Travel insurance is a more crucial purchase for some clients than others. So while agents may offer it on all travel sales, they promote it more heavily to clients at high risk for trip cancellation and for certain types of travel. These include:
• Travelers with pre-existing medical conditions or sick relatives. These clients should always take travel insurance, agents said. “A lot of people buy it because they have a sick mother or father,” Emerson said. “It’s an issue of whether they’re going to be able to take the trip in the first place.”
• Clients with young children. These clients are also at high risk for trip cancellation. A child doesn’t need to have a serious ailment for a client to cancel, Winter noted. “A lot of times small children are the reason for the cancellation, because from a safety standpoint it’s not healthy to bring them on a trip. If the doctor says that a child can’t travel, you can’t jeopardize your child.”
• Expensive or exotic travel. Adefio said that for “exotic” travel, he considers some level of insurance to be mandatory. Exotic, for his clients, is anything outside of North America or Western Europe.
Skip the insurance?
When clients are taking short weekend trips or buying just an airline ticket, agents may suggest insurance but not push the issue.
“We don’t focus on insurance if the travel is refundable, but once it starts getting into a cancellation penalty of more than 24 hours in advance then we take a look at it,” Winter said.
The way she decides? “Would I buy it? Does it make sense? Always, you want to keep your client’s best interest at heart.”
Next time: Travel Market Report examines what messaging travel agents use when selling travel insurance and what they do when a client refuses to purchase a policy.
