Travel Insurance 101: How to Protect Your Trip From a Hurricane

travel insurance with a model airplane, tickets, and a passport
Photo by scyther5/iStock/Getty Image Plus/Getty Images

With Hurricane Irma wreaking havoc throughout the Caribbean and Florida, Travel Agent thought this would be a good time to get you caught up on selling travel insurance, specifically coverage that protects vacationers from unforeseen issues like hurricanes. 

We spoke with Carol Mueller, vice president of marketing for Berkshire Hathaway Travel Protection (BHTP), Jason Schreier, CEO for APRIL Travel Protection and Daniel Durazo, director of communications at Allianz Global Assistance USA and put them all on the spot with some frequently-asked travel insurance questions. 

Here’s what they had to say:

1. In light of the recent Hurricane Harvey and the ongoing Hurricane Irma, how important is it to get a policy that protects against hurricanes? What do people need to know about such policies?

Durazo tells Travel Agent that although Allianz Global Assistance USA has no specific travel insurance product for hurricanes, many Allianz Travel Insurance policies cover trip cancellations, interruptions and delays caused by hurricanes.  

“While we are heartbroken to see the devastation caused by major hurricanes, we find that these events do remind travelers about the importance of purchasing travel insurance when booking a trip,” Durazo tells Travel Agent. “And we know that our travel partners appreciate the resources we provide to help travelers and pay their claims quickly.  As of today, we’ve received about 2,000 travel insurance claims related to Hurricane Harvey. Claims are starting to taper off significantly and we think that most travelers impacted by Harvey have filed their claims.”

Schreier says APRIL Travel Protection policyholders who are preparing to travel to a destination that is hit by a hurricane may be eligible for trip cancellation benefits if they are unable to proceed with their travel plans. 

“Different insurance providers price and define hurricane insurance benefits in a variety of ways, but one of the universal conditions in determining cancellation benefits during a hurricane is the date which the policy is purchased,” he tells Travel Agent. “Travelers must purchase insurance before a storm is named. In the case of Irma, policyholders would have had to purchase before August 30.”

On the other hand, Schreier tells us that policyholders who are already on vacation in an area affected by a hurricane may require trip interruption or evacuation benefits. 

“In many scenarios, this is the more serious side of hurricane coverage if conditions in the destination have deteriorated to the point where policyholders’ safety and/or enjoyment of the destination is adversely affected,” he says. 

Furthermore, trip interruption or evacuation are included in APRIL’s signature "Stress Less" benefits, which bypass the frustrating claims process via instant adjudication of all applicable issues and inconveniences. 

“This means our policyholders don’t have to go out of pocket to book their early return flight or suffer exorbitant costs should an emergency evacuation be necessary,” says Schreier, noting that APRIL offers trip interruption benefits covering up to 150 percent of a trip’s cost and evacuation benefits up to $500,000.

Mueller says BHTP’s “ExactCare Extra” product is a customer’s best choice in the instance of a hurricane. It has full traditional insurance coverage for everything you may need during hurricane season – trip cancellation, trip interruption, medical coverage and emergency evacuation – and additional “fixed-benefit” coverage for more common overlooked travel issues such as flight cancellations and missed connections.

“After seeing the devastating effects of Hurricane Harvey and preparing for the approaching Category 5 Hurricane Irma, hurricane season is a reminder that it’s extremely important to get travel insurance,” says Mueller. “Why? If your trip is cancelled or cut short by a mandatory evacuation, travel insurance could reimburse your nonrefundable travel expenses as well as cover costs incurred to return home early. If flights are cancelled and you can’t get home when scheduled, travel insurance can help cover added expenses such as hotel and meals when required to extend your trip.”

2. Are you seeing more and more people getting hurricane insurance in the last few years? Why or why not is this number going up?

Durazo tells Travel Agent that Allianz’s travel insurance sales have been growing by about 15 percent per year.  

“We think this is because travel insurance provides peace of mind in an uncertain world,” he tells Travel Agent. “Hurricanes, terrorist incidents and outbreaks such as Zika continuously remind travelers of the importance of purchasing travel insurance.”

And not surprisingly, Mueller tells Travel Agent that BHTP usually sees a spike in interest for hurricane-related policies when hurricane season picks up.

“It is important that any travelers planning to travel in areas historically impacted purchase travel insurance for trips planned during hurricane season,” she tells Travel Agent. “Don’t jeopardize your trip investment. Purchase travel insurance in case you are forced to cancel or interrupt your trip due to a hurricane.

For APRIL, Schreiber says the late summer and early fall that tend to be the peak months for travel insurance sales.

“We bundle coverage for severe weather and natural disasters in all policies sold by APRIL and our industry partners, so we can’t identify the number of policyholders who purchased insurance for protection against hurricanes,” says Schreier, “but the late summer/early fall is one of the peak travel periods for insurance coverage, especially for travelers vacationing in Florida and the Caribbean so there seems to be a correlation. Additionally, our call center has noted more hurricane-related questions preceding a lot of their converted phone, Skype and web chat sales.”

3. Who is more likely to get Hurricane or travel insurance in general? Millennials or Baby Boomers? Or both?

In general, Millennials are likely to purchase travel insurance, but those who book online will often check the “protect my investment” box on the airline or supplier website, whereas Baby Boomers are more likely to research and purchase a travel insurance policy directly from a reputable travel insurance company, says Schreier.

“This is because many of them have been burned by those ‘check this box’ waivers in the past when they fail to provide the level of protection travelers need,” Schreiber says. “That said, Millennials who book their vacations through a travel agent tend to be amenable to the agent’s recommendation. This is one of those opportunities for travel agents to demonstrate their knowledge and value in the customer’s eyes.”

Mueller says BHTP is also seeing an increase in Millennials purchasing travel insurance, according to BHTP’s proprietary study of State of Travel Insurance data (2017 study and preliminary results from 2018 study).

“Savvy travelers in general purchase travel insurance, particularly those concerned about hurricane impacts in affected areas during hurricane season,” she says. “Additionally, when looking at the reasons why Millennials are purchasing more, trip type stands out as the number one driver behind Millennials’ increased predilection to buy travel insurance, followed by travel health concerns and increased knowledge of what travel insurance does.”

Durazo, however, tells Travel Agent Baby Boomers typically have more invested in their trips and they are more likely to protect those investments with travel insurance. 

“Boomers may also be concerned about the costs associated with medical emergencies and medical evacuations,” he says. “But unexpected illnesses and injuries can happen to anyone and it’s a good idea to purchase travel insurance to guard against costs that can run into the tens of thousands of dollars.”

4. What are some stories/examples you can share on how hurricane insurance helped someone?

Schreier tells Travel Agent many passengers were stranded after Hurricane Harvey disrupted travel into and through Houston, particularly travelers flying United Airlines. This is because a large number of United flights connect via the airline’s busy George Bush Intercontinental Airport (IAH) hub, he says.  

“United was able to reroute some passengers through their other hub Chicago, but many passengers were forced to rebook on competing airlines at an additional cost or cancel their travel plans at a significant financial loss, especially if they booked individual travel components separately,” he says. “However, those who had purchased a comprehensive travel insurance policy prior to the storm’s development had other options at their disposal.”

Mueller instead points to last year’s Hurricane Matthew as a great example of why a client needs to protect themselves.

“Last season was a steadfast reminder of a hurricane’s impact on travel when Hurricane Matthew ripped through the Caribbean and moved up the southeastern coastline of the United States,” she says. “Thousands of flights were cancelled with many travelers being either rerouted or stranded to wait it out during the storm. This storm was a reminder as travelers who were vacationing in North Carolina were either evacuated ahead of the storm or stranded when Hurricane Matthew hit. In these cases, we can help our customers find gas or alternative lodging, and provide traffic reports along evacuation routes and other crucial assistance services.”

Durazo says Allianz is currently fielding calls from customers who have had to cancel their trip because Harvey impacted their travel plans.  

“Customers are also calling for help from our travel assistance department, which can assist in finding flights, accommodations and solving almost any travel related problem,” he says. “Allianz Travel Insurance policies allow our customers to cancel their trip and receive a refund for their pre-paid, non-refundable expenses in the event that a hurricane causes their travel provider to stop offering services to their destination for 24 hours or more, or if the customer’s home or destination become uninhabitable, or if there are extended travel delays.”

5. What are some other trendy, new policies? 

BHTP’s new products, ExactCare Extra and ExactCare Value, just launched in May. ExactCare Extra is the first policy to combine the innovative and immediate fixed-benefit payments featured in a traditional travel insurance plan, says Mueller. 

“What this provides travelers is the opportunity for immediate claims payments due to travel inconveniences while traveling,” she tells Travel Agent. “How does it work? If you have a flight delay, tarmac delay, missed connection, or baggage delay, BHTP will immediately deposit your claim benefit to your account when approved.”

Mueller tells us BHTP’s tech-savvy services such as real-time flight tracking allows BHTP to monitor, review and approve your travel inconvenience claim immediately and expedite reimbursement directly to debit or PayPal via its BHTP Burst payment technology.

As far as APRIL goes, the Cancel For Any Reason (CFAR) policy is the big trend nowadays. 

“We’ve seen a major uptick in CFAR policies since the onset of the Zika virus as the CDC Zika virus alert has remained at level 2, which means that policyholders are simply encouraged to practice enhanced precautions,” says Schreier. “Since 'fear of traveling' isn’t something you’ll find covered by any travel insurance policy, many vacationers choose CFAR coverage so that the decision on whether or not to cancel is squarely in their hands with no need for a doctor’s note or any justification at all. This is something we’ve tried to capitalize on by including CFAR as a $60 add-on under our VIP Plan. Comparatively, most travel insurance companies charge a 45 percent or 50 percent surcharge on top of the total policy cost.

In general, Durazo tells Travel Agent there is a strong trend in the travel insurance industry to improve technology and customer service to benefit travelers. 

“Many of our customers take advantage of the ability to file and track claims on our website from any device, including from their smartphone using our TravelSmart mobile app,” he says. “Recently, we simplified our claims forms and streamlined the process to make filing a claim faster and easier for our customers. We have also added a payment option via debit card, which allows customers to receive their funds almost immediately after their claim is approved.”

Visit www.bhtp.com, www.allianztravelinsurance.com and en.april-international.com/us. Keep visiting www.travelagentcentral.com for all your latest travel news and be sure to follow Travel Agent’s Joe Pike on Twitter @TravelPike and Instagram @pike5260.

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