“I believe travelers will see that travel insurance is truly a necessity post COVID-19 as opposed to a ‘nice-to-have,’” says travel advisor Tom Varghese, owner, Travel Tom.
“The U.S. was far behind other more mature markets for travel insurance compared to other countries around the world,” says Jason Schreier, CEO of APRIL USA. “That gap will close considerably as we’re expecting people to begin looking at travel insurance as a must-have especially where flights are involved. There’s never been a clearer time to see how unpredictable and out of control the world can get.”
Travelers now want the reassurance they can cancel if the current environment changes. “Travel advisors have access to ‘true’ cancel for any reason insurance with full refund. This will help protect your clients, and will also give them the added peace of mind to purchase now for future travel and not have to worry about losing their investment should something go wrong. This will leave the choice of whether a client decides to travel in the hands of the traveler versus at the mercy of the OTA, supplier or hotel who will have their own independent cancellation policies,” points out Varghese.
Schreier adds, “Like most travel insurers, the COVID situation has led to unprecedented measures such as changing dates and refunding policies in the tens of thousands in a matter of weeks and months. We’ve been really proud of how APRIL and our industry as a whole has dealt with this situation to go outside of the terms of the policy.”
“Advisors need to explain to clients the value of protection offered, especially when things can go drastically wrong,” says Varghese. “For example, one of the questions we always ask guests that are attending a destination wedding is ‘If the couple cancels their wedding, will you still be going on this trip’—and that answer better be a solid YES. And usually it is not, which demonstrates why the insurance will be so important for the guests.”
“Travel insurance is the best-kept secret of savvy travelers,” adds Daniel Durazo, director of marketing and communications for Allianz Global Assistance US. “The world we live in can be unpredictable, so advisors should suggest that travelers buy insurance at the same time they book their trip.” This, he says, gives clients the longest period of coverage possible and allows them to take advantage of valuable coverage for existing medical conditions.
However, as Varghese notes, travel insurance companies will have changes to work through now during this “new normal” we are all navigating. “I think fewer tour operators will be offering ‘true’ cancel for any reason insurance. I think insurance companies may also consider extending coverage for travel warnings and quarantine expenses as part of their ‘covered reasons.’”
And that’s exactly what Allianz is working on. As Durazo says, “Although travel insurance policies do not generally cover pandemics, we have made important temporary accommodations that provide coverage for trip cancellations and interruptions should a customer become ill with COVID-19.” He notes that all of their policies come with a 15-day “free look” period to allow travelers to review their policy and decide to keep it or change to another one.
Schreier adds that, “Until policies get updated to better wrap around the COVID world, it’s highly advisable for clients to purchase Cancel For Any Reason coverage especially on expensive trips with non-refundable components. Agents should have a firm grasp on the cancellation terms from the travel suppliers. They should also understand how the insurance policies they’re considering work relative to COVID travel situations, as it’s a conversation most travelers will look to have with their travel agent.”
“Despite everything being so fluid and uncertain now, we’re trying to anticipate travel in the new world,” Schreier says. “For instance, our hope is that failed temperature checks at airports and cruise terminals will be considered a covered situation.”