Travel Insurance 101

Delays and cancellations caused by severe weather underscore the value and importance of travel insurance.

Travel agencies and suppliers account for 55 percent of all travel insurance sales. That’s just one of the many key findings in a recent US Travel Insurance Association survey. Further digging into the results indicates that this ancillary product is still a largely untapped source of revenue.

Consider that one in six Americans (17 percent) told UStiA that their travel plans have been impacted by medical conditions, mechanical or carrier-caused problems, or natural disasters (including severe weather), but fewer than one in four (22 percent) of those impacted had travel insurance. Bear in mind as well that the survey was conducted between the spring of 2012 and fall of 2013—well before the weeks of blizzards, nor’easters and other winter snow and ice storms that resulted in a reported 75,000-plus flight cancellations alone. Agents can point to these bouts of severe weather to show their clients the importance of buying travel insurance. While nothing is a sure bet, rest assured that 85 percent of impacted travelers who bought such protection said they were satisfied with their purchase. 

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Younger Americans (29 percent) and those earning $50,000 (25 percent) or more are the most likely buyers and 40 percent of respondents who said they would consider insuring a future trip would do so for trips costing $500 per person or more. Not surprisingly, the likelihood of purchasing travel insurance increased according to trip cost.

UStiA says that while clients may not think about getting sick or having an accident when they book their trip, the reality is that each year thousands of travelers need medical help during their trip. Without the proper insurance, medical treatment and assistance, especially medical evacuation, can run into hundreds of thousands of dollars.

Underscoring this last point is a State Department alert issued a few weeks prior to the Winter Olympic Games in Sochi. The alert noted in part that “…Medical capacity and infrastructure in Sochi are untested for handling the volume of visitors expected for the Olympics,” and advised travelers to “consider purchasing private medical evacuation and/or repatriation insurance.” 

According to UStiA, agents should advise their clients to check their current coverage, and determine whether they are adequately protected in case of illness or injury while traveling. To help your clients determine whether travel insurance is right for them, ask them the following questions suggested by the UStiA: 

* How much can you afford to lose if you have to forfeit all or part of your vacation because of illness, natural disasters, and other concerns? 

* What happens if you become ill or injured while traveling? 

* Will your airline, cruise or tour company refund your money if a sudden illness forces you to cancel at the last minute?

Then let them know how travel insurance can help cover nonrefundable payments such as hotel, cruise, or tour; reimburse medical expenses, locate appropriate medical facilities and arrange medical transport in case of injury or illness during a trip and much more.

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