How Has COVID-19 Changed Travel Insurance? | TravelResearchOnline


How Has COVID-19 Changed Travel Insurance?


In normal times, insurance is one of the quietest sectors of the travel industry. But during the COVID-19 pandemic, travel insurance has become one of the most dynamic products for a travel advisor to sell, and it’s worth an update here.

Some countries have begun offering comprehensive medical coverage to encourage more travelers to visit their destinations. Suppliers are insuring the cost of cancellations through totally flexible cancellation policies, as well as their own vacation protection coverage.

For example, the week of August 10, Portugal launched a travel insurance program for inbound international travelers that will cover medical, surgical, hospital and pharmaceutical expenses. Spain’s Canary Islands is doing the same.

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Meanwhile, companies like Apple Leisure Group Vacations are heavily marketing, and occasionally discounting, their own travel protection plans that come with highly coveted Cancel for Any Reason coverage.

Through the beginning of September, ALG offered 25% discounts off its three insurance plans under its Travel Protection Plus program, including Cancel for Any Reason (CFAR) coverage options and full travel credit refunds.

Then there are the traditional travel insurance companies. Hamstrung by state-by-state regulations and filing requirements, they’re still analyzing how they can adapt in this rapidly changing environment.

And, boy, have consumer preferences changed. According to the online travel insurance aggregator Squaremouth, travelers 21 and under account for roughly a quarter of all travelers purchasing travel insurance since May, nearly double the 11% they represented in January, before the pandemic achieved prominence.

In July, 40% of travelers purchased a policy that specifically included cancellation or medical coverage in the event they contract COVID-19 or are quarantined and, since February, 20% of all policies purchased include the pricey but extensive CFAR upgrade, a 210% increase compared to last year. (Cancelling a trip because of fear of traveling is typically only covered by CFAR plan upgrades.)

Still, most experts say it doesn’t appear that consumers are increasing their appetite for travel insurance much.

“There has been an uptick in conversations around coverage for COVID related medical expenses. Travelers are keen to better understand specifically how they will be covered in the event they contract COVID pre- or post-departure,” said Cory Sobczyk, Vice President, Business Development, Arch RoamRight Insurance.

But “the overall reduction in sales due to the economic slowdown makes it hard to truly gauge relative appetite,” said Sobczyk.  “Purchase propensity for travel insurance is far outweighed by the global economic uncertainty we are experiencing.”

“We can’t tell from purchase patterns that consumers are more concerned about COVID-19,” said Dan Durazo, Communications Director at Allianz Global Assistance. “Our sales team is hearing that travelers are more interested today in learning how travel insurance may protect their travel investment than ever before.”

However, the percentage of customers purchasing Allianz travel policies “is up year over year,” Durazo said, and interest in the company’s Cancel Anytime product has increased, “but sales have not grown significantly.”

“We attribute this to increased awareness of the need to protect significant travel investments from unforeseen events.  We’re seeing more international destinations requiring that foreign tourists obtain travel insurance before they arrive.  We expect this trend to continue and to drive additional interest and sales of travel insurance policies.”

Analyzing data from CruiseCompete, travel insurance purchases peaked in April, during the worst part of the pandemic, but interest appears to have dropped back down to normal levels.

Cruise Compete president, Heidi M. Allison, believes with more cruise lines creating extremely flexible cancellation policies, a big reason for purchasing travel insurance has been taken off the consumer’s plate for them.

Arch RoamRight’s Sobczyk said “it’s difficult to accurately assess” whether supplier cancellation policies have had an impact. “However, travel insurance provides a lot of value beyond trip cancellation and we believe, over the long run, the interest in travel insurance to help protect against travel risks will increase,” he said.

Allianz’s sales team reports “interest in travel insurance remains strong despite the fact that some travel suppliers are liberalizing their cancellation policies. Consumers are concerned about both the potential need to cancel their trip and the potential need for assistance while traveling,” said Durazo. “Only travel insurance can fill both of these needs for consumers.”


Some Travel Insurance Companies Respond to New Consumer Behavior

Allianz has temporarily added cancellation coverage for customers who may become ill with COVID-19 before or after their trip, and provides emergency medical coverage for customers who may become ill with COVID-19 while traveling.  “We believe that providing this temporary coverage for consumers who may become ill with COVID-19 is giving travelers the additional confidence they need to book their next trip.”

Seven Corners International is marketing its Liaison Travel Plus plan, “designed to protect you in this new environment,” the company says in its marketing materials, including medical expense coverage up to $100,000. Additionally, Liaison Travel Plus includes $500,000 for emergency medical evacuation and repatriation to transport you to a medical facility with appropriate care, if necessary.

April Travel Insurance has begun branding its existing CFAR coverage as its “Pandemic Plus Plan,” starting at $25 per person, with reimbursement up to 100% of unused, non-refundable travel arrangements in the event the policyholder, their traveling companions, family member, child’s caregiver, or business partner contracted COVID-19 as diagnosed by a physician.

It also offers trip interruption coverage under similar circumstances, with reimbursement up to 150% of unused, non-refundable travel arrangements, additional transportation expenses and/or return air travel including change fees. If the policyholder contracts COVID-19 during their trip, they’re covered for immediate medical care up to $50,000, and evacuation/repatriation coverage up to $500,000.

April’s CFAR optional upgrade is available for an additional 50%, offering reimbursement of up to 75% of unused, nonrefundable travel arrangements. April does however caution consumers that no government travel bans to their destination can be in place for their travel dates, prior to purchasing a plan. Additionally, the plan does not cover losses due to government-imposed travel bans, fears over COVID-19 case spikes at home or their destination, or similar restrictions related to COVID-19 unless the policyholder adds CFAR coverage.

This single-trip plan covers COVID-19 related trip interruptions, cancellations, and emergency accident and sickness expenses. Travelers can choose to upgrade the Pandemic Plus Plan by purchasing the “Cancel For Any Reason” option which allows policyholders to cancel their trip including for fear of traveling due to COVID-19.


Richard D’Ambrosio is a master storyteller who, for more than 30 years, has helped leading brands like American Express, Virgin Atlantic Airways, the Family Travel Association (FTA), and Thomas Cook Travel tell their stories to their customers, the media, and employees. A professional business coach and content marketing consultant with his own firm, Travel Business Mastermind, Richard most recently has worked with The Travel Institute, Flight Centre USA and a variety of host agencies and tour companies, helping entrepreneurs refine their brands and sharpen their sales and marketing skills. Richard writes regularly about retail travel agencies, social media & marketing, and business management.

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