Skift Take

Global events during the past year have fundamentally shifted how travelers view insurance and how they want to interact with providers during their trips. What was once overlooked by many U.S. travelers is now largely thought of as necessary, and brands want to make policies easier to digest.

Disease outbreaks and terrorist attacks during the past year have caused many travelers to give more thought to protecting themselves than they have in the past, including buying travel insurance.

U.S. travelers historically chose travel insurance for cancellation reasons if something unexpected happenS before their trip, and mainly for international rather than domestic trips. This is still the dominant reason. But U.S. travelers are increasingly choosing insurance for post-departure protection, said Eman Barhoumeh, Expedia, Inc.‘s senior director of global insurance. They’re more concerned about medical coverage and emergency assistance for international travel or for delayed baggage, for example.

Travel insurance is generally second nature for non-U.S. travelers, particularly when it comes to medical coverage. Canadians and Australians’ medical insurance plans, for instance, generally don’t cover them when they travel abroad. Medical travel insurance has typically been more popular with European than U.S. travelers but the latter are increasingly choosing that coverage too.

Expedia, Inc.’s travel insurance team, for example, has found travelers booking air travel through are three times more likely in 2016 to purchase travel insurance than they were five years ago. Data from the U.S. Travel Insurance Association show travel insurance purchases for U.S. travelers are up by more than 17 percent since 2012. In 2014, U.S. travelers spent $2.2 billion on 24.5 million travel insurance plans covering 33.3 million travelers.

Insurance premiums for U.S. travelers range from six to seven percent of the total trip cost, according to, a site comparing various travel insurance plans, that looked at how much insurance cost travelers for the most popular international destinations during the 2015 holiday season. That generally varies from less than $100 to $400 for the average five- to seven-day trip.

Current events contribute to this shifting consumer behavior, but rising airline change and hotel cancellation fees, for example, also influenced this trend even before the Paris attacks or the Zika virus outbreak.

“Unfortunately Europe used to be one of those places where Americans didn’t think they needed travel insurance but now that’s changed,” said Christina Tunnah, business development and marketing manager for the Americas for World Nomads, a site helping travelers decide what kind of travel insurance they should buy based on their destinations. “That’s not necessarily because of volcanoes or terrorists attacks but also because of cancelled flights and delays that are happening more and more.”

Selling Travel Insurance

Allianz Global Assistance, Allianz’s travel insurance arm which insures 21 million travelers, runs weekly Twitter Chats with travel blogger influencers. It’s found that one of the top reasons why many travelers forgo travel insurance is complex policy language and complicated claims processes. Pitching the benefits in under 140 characters helps with that.

Travelers also want faster claim reimbursements. To simplify matters, Allianz now processes and reimburses all claims within 10 days compared to the weeks or months it used to take.

It’s also seen more demand from business travelers during the past year and recently signed on with Hickory Global Partners, a company connecting travel management companies with insurance providers, to help fulfill this need.

“Most business travelers aren’t concerned about insurance because their companies are paying for them anyways,” said Dan Durazo, a spokesperson for Allianz Global Assistance. “But they still want to be more protected with everything going on in the world. Our business traveler insurance plans only cover travelers post departure, nothing before the trip, so for things like medical or in-destination emergencies.”

Most travel insurance companies advocate for buying insurance at the time of booking instead of tacking it on at a later date before departure, “The sooner you buy insurance, the sooner your coverage kicks in,” said Durazo. “If you wait you’re risking the chance that you might not be covered.”

Part of why many travelers don’t opt in for insurance is how it’s sold online, often at the very end of the booking funnel directly before purchasing, “It’s very much a grudge purchase at the end,” said Phil Sylvester, a spokesperson for World Nomads. “You’re going through the steps, choosing your flights, various amenities and then at the very end you’re asked ‘oh by the way, here’s insurance if you want to be protected’ and you choose yes or no. There’s often nothing there explaining the value of insurance.”

“We try to put ourselves into the travel lifecycle a little earlier. We start to get the safety message involved earlier in the process. We actually refer to travel insurance in all of our materials as ‘traveling smarter,’ that means also knowing about the culture, the language, the right etiquette and staying safe.”

To Sylvester’s point, general misinformation or lack of education about travel insurance remains the biggest obstacle for brands’ selling it.

“Because travel insurance has different components, our challenge is educating consumers on why they need the product regardless of their motivating factors,” Jeff Rutledge, CEO of AIG Travel, told Skift. “There are certain risks, like medical or security evacuation, for which many travelers do not have ongoing cover, and they need to understand the value of that protection.”

Rutledge added that insurance regulation also inflates travel brands’ challenges with selling and making it easy for consumers to understand, “Whether purchasing the product as a consumer or offering the product on behalf of an insurance company, people also need to be aware that travel insurance is a financial service product that is generally highly regulated, and those travel insurance regulations vary greatly from country to country and in the U.S., from state to state.”


The Daily Newsletter

Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.

Have a confidential tip for Skift? Get in touch

Tags: expedia, travel insurance

Photo credit: People wait for their delayed flights at LaGuardia Airport in New York City. Zoran Milich / Reuters

Up Next

Loading next stories