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When Covid-19 hit early last year and most travel around the world stalled, would-be vacationers struggled to get refunds from hotels, airlines, cruise lines, and other travel providers – or to file travel insurance claims for canceled trips.
They often hit a wall on both fronts. Suppliers struggled or blocked at times with refunds – leaving those without insurance wishing they’d bought some. In the meantime, the “insured” often found that the plans they bought did not cover travel or medical expenses related to Covid.
“People were trying to get their money back, trying to see through credits versus refunds, and making travel insurance claims,” said James Ferrara, co-founder and president of the InteleTravel network, based in Delray Beach, Florida, which includes approximately 60,000 households. Travel advisor. “They were also looking for travel insurance for their next one [trip] and ensure that insurance covers another occurrence of a pandemic because all of this has taken many people by surprise – including the insurance industry. “
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After those epic “burn injuries,” many Americans who are taking to the streets again with the pandemic-era restrictions lifted, insure their travels – and their health – as they plan trips. They do this both to avoid future problems and, in some cases, because they have to. For example, more than two dozen countries require visitors to cover medical and sometimes travel expenses, including incidents related to Covid.
“Before that there were a good handful [Covid]but more now, “said Megan Moncrief, chief marketing officer and data specialist at travel insurance comparison site Squaremouth.com.” It makes sense, given how expensive it can be to get care abroad. “
Squaremouth, based in St. Petersburg, Florida, maintains an online list of approximately 26 countries that currently require Covid-specific medical care from visitors. (U.S. health insurances generally do not cover medical care overseas.)
Countries that require Covid-19 travel insurance
Some countries have made travel insurance coverage for Covid mandatory for visitors. Most will require emergency medical care, but some will also require coverage for housing if quarantine is required. Here is a list of countries that require proof of Covid-specific or general health insurance:
- Cayman Islands
- Costa Rica
- Dubai, United Arab Emirates) *
- Ecuador *
- French Polynesia
- New Zealand*
- St. Maarten
- Turks and Caicos Islands
* The country even requires non-Covid-19 related health insurance for visitors.
Additionally, to visit Dubai, for example, you will need at least $ 100,000 in general emergency medical care and $ 50,000 in medical evacuation. And for trips to Antarctica, where different nations control different areas, tour operators often charge at least $ 100,000 in medical care and evacuation costs.
The amounts are guaranteed. Jeremy Murchland, president of travel insurance company Seven Corners, said his team is a regular help with evacuations and “we have had a few cases over the six-digit figure in the last year.”
It’s not just travel destinations and tour operators that need coverage. In the heavily affected cruise industry, Royal Caribbean Cruises announced that unvaccinated passengers will need to purchase travel insurance, CNBC reported. “It will be a [push] from travel agents, ”said Moncrief. “But we saw [sales] almost 100% of consumers who are just shocked and want to know what coverage options they have. “
In June 2020, Indianapolis-based Seven Corners was among the first to offer Covid-specific medical care as part of three plans for international travelers, students and frequent travelers. (The company sells both comprehensive travel insurance policies and health-only plans.)
For its part, Squaremouth outperformed travel insurance sales last month, up 14% from June 2019. Compared to June 2020 when virtually no one was traveling, sales increased 466%. “There is certainly a major rebound that I think is great for the industry,” said Moncrief.
However, customer demographics have shifted. Baby boomers and older travelers – once key pillars of the industry – haven’t come back, she noted. “We’re seeing a younger population, about 10 years younger than our historical average,” said Moncrief. “Right now we’re seeing people in their early 40s who are really buying travel insurance.
Similarly, Seven Corners’ data shows that the average age of those buying a travel protection plan is 43, while the age of customers buying a medical-only travel plan is slightly younger at 39, which was obtained only for trip cancellation, said the company.)
“It is really everyone who has had some kind of rejection [last year] … and now they’re looking for or needing to get travel insurance, “Moncrief said, noting that travelers up to the age of 21 were Squaremouth’s largest customer base at the time of the pandemic. “It was crazy to see that shift,” she said. »When have you ever taken out travel insurance? But they were the only ones who traveled. “
While I want to say that travel insurance purchases are increasing, I am not so sure.
President of InteleTravel
At Seven Corners, policy sales are only about 10% lower than in 2019, although the latest industry forecasts in 2021 will only reach 40 to 50% of the international travel figures published two years ago, according to Murchland. “What that tells us is that the attach rates are much higher,” he said. “More people are aware of travel insurance and its need.”
According to InteleTravel’s Ferrara, health and safety are top concerns today for travelers of all ages, and even for domestic travel. “If I travel now, what is the hotel, cruise line or tour operator doing to protect me?” he said. Travelers also wonder what will be expected of them upon arrival in terms of vaccination cards and Covid test requirements, and worry about the cost and ability to file claims if they have to cancel.
With traditional, traditional travel insurance plans, buyers often had to purchase Covid themselves in order to receive a refund for travel. sick family members, canceled flights, government quarantines, job loss, etc. were out of the question. In fact, only 30% of the Covid-related claims Squaremouth saw were due to policyholders getting sick themselves. the other 70% were due to other factors such as border closings.
Seven Corners’ Murchland stated that a fall of the nerves is also unsuitable for claims. “A lot of people had booked trips for later last year and said, ‘Hey, I’m nervous, don’t want to travel and … I’m going to cancel my trip,'” he said. “But nervousness or fear of traveling is usually not an insured trigger in the basic insurance.”
With insurers often having Byzantine rules as to whether or not a canceled trip is insured, Squaremouth is now seeing sales of so-called cancellation plans skyrocket for whatever reason. Sales are up 165% from 2019, Moncrief said. For its part, Seven Corners saw sales of such plans jump 180% last year compared to 2019, and the trend has continued through 2021. True to their name, these generally more expensive plans offer no-questions-asked refunds for canceled trips.
“Before Covid, we never recommended canceling for any reason because of the huge premium hike,” she said, but people want it. “It feels like we’re getting out [the pandemic] But even now … travelers are just like ‘I don’t know what’s going to happen’ and they cancel for some reason. “
Will demand fade over time if hopefully the pandemic will be remembered? Moncrief doesn’t think. “How will we react to the next pandemic?” She said. “Nobody knows the answers, so I think interest in travel insurance will remain high.”
Is an increase in interest rates guaranteed?
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These new coverage requirements from travel providers could also persist, she said. “Cruise lines, tour operators and airlines can only hold the refund for so long; they need another option.”
Murchland noted that prior to Covid, only about 30% of US travelers had travel insurance – compared to, say, 60% of people in Europe – but the severity of the pandemic had postponed it. “Because Covid is going on for so long, I think there will be staying power; how far will time tell,” he said. “I don’t think it’s something that will go away next year.”
Ferrara at InteleTravel is less sure of that. “We Americans have short memories,” he said, noting that an initial spike in Google searches for travel insurance at the start of Covid “fell through the floor” within six to eight months. “It’s partly a defense mechanism of us as humans – we just don’t want to think about it.
“While I want to say that travel insurance purchases are increasing, I’m not so sure.”