Insurance: Before the Sale


Luxury Travel Expo participants
Discussing travel insurance at the Luxury Travel Expo in December are, from left, Brad Anderson, Avoya Travel / American Express; Carlos Cividanes, TravelSafe Insurance; Sheri Machat, MH Ross Travel Insurance Services; Isaac Cymrot, Travel Insured International; and Greg Johnson, Travelex Insurance Services.


Whether it’s a tsunami in Japan, political unrest across the globe, airline strikes or other disasters, global travel plans can change in an instant. Are your clients prepared if something happens on their trip?

“If you are not selling insurance, you are putting yourself and your clients at risk,” Brad Anderson, co-president of Avoya Travel / American Express, stressed to retailers attending a travel insurance educational session in December at the Luxury Travel Expo (LTE) in Las Vegas.

So as you start 2012, it’s a good time to evaluate your insurance sales programs. We asked several major insurers for tips and gleanings based on their experiences with agents and claims.

Put Insurance Up Front: Travel Insured International surveyed 50 top-selling agents and discovered that 86 percent include insurance in their client price quotes. So, why not incorporate the topic of travel insurance in your initial qualifying conversation with the clients?

“This is as simple as advising them that you include insurance with all your quotes,” says Isaac Cymrot, Travel Insured’s vice president of sales and industry relations. Then “when you present them with their price quote, they will be prepared and expecting to see the added benefit in the price.”

Get Beyond Price: “Remember that oftentimes the price objection is in your head and not with your clients,” notes Cymrot. So unless a client has specifically told you not to include insurance, why not offer it? It’s a professional service. It also shows clients you want to protect their travel investment.

From Cymrot’s perspective, “Most agents we talk to don’t sell the trip components simply based on price, so why change that philosophy with travel insurance?”

Clarify the Bottom Line on Potential Losses: Most clients have already done research on the cruise or tour, but few have done so with insurance. As a result, Sheri Machat, senior vice president, MH Ross Travel Insurance Services, says clients often ask, “How much insurance do I purchase?”

One good answer is “How much will you lose if you cancel your trip the day of departure?” Many people are confused with how much coverage to purchase and this is one way to come up with a valid number, Machat says.

Narrow the Choices: Partner with a reputable third-party insurer. Many insurers also say agents should only recommend one product to clients. In Travel Insured’s survey, all 50 agents said they only recommend one product to their clients.

Some agents, though, may feel more comfortable recommending two—a modestly priced option and one more robust in coverage and higher in price. If you go that route, offer clients a simple side-by-side comparison of what’s covered, so it’s easy to choose.

Definitely avoid a laundry list of options; multiple choices may confuse clients and give the impression you don’t know what’s best.

Ensure Accuracy of Information Submitted: “One of the most important things travel agents can do prior to securing coverage for their clients is to make sure the information being submitted is accurate,” says Scott Perfetto, president, TravelSafe Insurance.

When an agent takes on the responsibility of placing an insurance order, it’s important for the agent to use correct legal names and travel dates and then check the accuracy before submitting the application. “Agents that take the time to do it right the first time retain clients and reduce their legal liability,” emphasizes Perfetto.

Pick the Right Plan: Recommend insurance based on the clients’ specific travel arrangements as well as their personal demographics such as age and health, according to Greg Johnson, director of sales, Travelex Insurance Services. For example, traveling deep into the African bush for six weeks may require different insurance coverage than what’s needed for a weekend visit to Montreal.

Johnson recommends agents provide clients with a brochure outlining coverage and a customized quote based on the clients’ needs. Explain benefit levels and features, review any pre-existing condition waiver coverage, and advise of the policy enrollment option.

Deal with Pre-Existing Conditions: Whenever possible, try to get a pre-existing condition waiver for clients. While that may not seem necessary for young travelers, clients of any age may have underlying conditions that could cause a denial of claim later, unless they’ve purchased a pre-existing condition waiver. That said, Carlos Cividanes, TravelSafe’s director of national accounts, told agents attending LTE that a pre-existing condition waiver is not for those clients who are medically unfit to travel at the time of the insurance purchase. This includes clients under active medical treatment. In that case, he suggests the agents ask the clients to visit their doctor and try to secure a letter certifying that they are fit to travel.

But find out specifically how your travel insurer defines a pre-existing condition; most insurers have “look back” periods and your clients must meet certain requirements.

Timing Counts: Make sure clients purchase travel insurance within the insurer’s deadline window for these three important types of coverage: (1) waiver of pre-existing conditions, (2) cancel-for-any-reason protection, and (3) travel supplier bankruptcy/default coverage. It’s best to sell these at the time of the trip deposit.

If clients aren’t ready to buy insurance, insurers typically allot between seven to 21 days after the initial trip deposit for clients to still buy insurance with these protections. It varies by insurer. Keep track of the date and remind clients as the deadline nears.

Explain the Fear Factor: “It is good to let clients know that if they are nervous about traveling or afraid to travel, that [their fear of travel] is not covered unless they have purchased cancel-for-any-reason protection,” says Machat.

Be sure to sell enough coverage to cover the full nonrefundable, prepaid cost of that coverage. Many firms require that clients buying cancel-for-any-reason protection insure the full trip cost, not just a tour or cruise. Air ticket costs and independent arrangements such as pre- or post-cruise hotel stays must also be insured. Otherwise, clients may invalidate their coverage.

Let Insurers Explain: Agents can tackle general policy features and pricing. But insurers recommend that agents always refer clients to the insurer’s customer service department for any specific questions either before or immediately after the insurance sale. Clients need to understand policy definitions and what each specific type of coverage entails.

Understand Foreseeable Events: Insurance is based on the unknown. Access America tells clients that once labor action such as an airline strike authorization has been voted on by a union, it is considered a foreseeable event. Insurance purchased after such a vote will not cover strike actions. But clients who have purchased plans that include strike-related trip cancellation and interruption protection are covered for related losses as long as insurance was purchased before the date of the labor action.

Insist on Waivers: If clients choose not to buy travel insurance, ask them to sign a waiver stating they declined. This protects your agency and limits liability if the clients cancel or have a problem while traveling. With a signed waiver, “you have proof that insurance was offered and they declined,” emphasizes Cymrot.

But if a client won’t sign, Machat advises agents to e-mail the client to confirm they declined the insurance.