Since the pandemic, focus has started to shift to more customer-centered services, comprehensive policies and flexibility.
With this in mind, here are some of the travel insurance changes that you can expect to see in 2021.
Travelers Lock In Cancellation Insurance
Trip cancellation coverage has always been a popular component of travel insurance. It has been part of 80% to 90% of travel insurance policies, according to Squaremouth, a travel insurance provider.
Now, among trips being booked for 2021, 95% include cancellation coverage, says Squaremouth.
Catering to the Needs of Specific Travelers
To meet travelers’ many and varied needs, travel insurance companies are creating insurance policies that cater specifically to individual types of travelers.
Many travelers are planning bucket-list trips in 2021. And millennials and high-income travelers say they plan to spend a large amount of money on travel, according to a recent State of Travel Insurance 2021 Report by Berkshire Hathaway Travel Protection.
For the millennial and high-income travelers who want to jet off to a luxurious destination, Berkshire Hathaway Travel Protection designed LuxuryCare, which offers coverage of $100,000 for medical expenses and $1 million for emergency medical evacuation. LuxuryCare also covers medical expenses and cancellation due to COVID-19.
Simultaneously, mature travelers and travelers with small budgets plan to stay closer to home by taking road trips or stateside family vacations.
Berkshire Hathaway Travel Protection’s ExactCare Lite plan was designed for a traveler who will travel by car in the U.S. This plan excludes coverage that’s not needed for road trips, such as travel delay, baggage and flight cancellation coverages.
Providing Services Beyond Travel Insurance
Bundling services with travel insurance is gaining steam. Most travel insurance plans already provide 24-hour hotlines for travel-assistance services.
Some plans up the ante on traveler assistance by providing concierge service. For example, the Platinum plan from AXA Assistance USA includes concierge services that can help you get tickets and dining reservations during your trip.
“The market now requires more than just travel insurance; travelers need services that can give them peace of mind. To meet the needs of the traveler, many companies are beginning to bundle services such as telehealth or roadside assistance with travel insurance products,” says Atilio Spaccarotella, CEO and founder of Rene, a provider of travel-related safety and health services to businesses and travel agencies.
Rene, for example, provides travelers with customizable travel insurance paired with telemedicine services, travel advisories, wellness programs, in-home COVID-19 testing and health care access wherever they are in the world. You can purchase these policies through travel agencies such as Travel Deal Master.
Policies are Becoming More Transparent
Before the pandemic, travel insurance companies may have tiptoed around their exclusions. It was hard for consumers to decipher what was covered and what wasn’t—especially when the pandemic hit and travelers didn’t know if they were covered for COVID-related problems.
Now many travel insurance companies want to be as transparent as possible and let their customers know precisely what their policies cover, so there is no confusion about claims.
Allianz travel protection plans, for example, explicitly state that: “Our travel protection plans do not generally cover losses directly or indirectly related to known, foreseeable, or expected events, epidemics, government prohibitions, warnings, or travel advisories, or fear of travel. As such, we recommend that you do NOT purchase our products to insure you against any such losses, including related to COVID-19.”
“Overall, travel insurance companies are attempting to do a better job explaining the inner workings of the policies and how they handle claims to streamline the process for the travel insurance companies and consumers,” says Spaccarotella.
COVID-19 Coverage Becomes Essential
Until the pandemic is in the rear-view mirror, covering COVID-related problems with travel insurance is essential.
Many travel insurance plans do not cover COVID-19 at all. Some plans cover medical expenses if you contract COVID on your trip but won’t cover cancellation if you come down with it.
“Most travel health insurance plans are now covering COVID-19 as an illness (which they didn’t a few months back), but the fact that their policy states that COVID-19 is a covered illness doesn’t mean that cancellation due to COVID-19 is included. It’s essential that the traveler pays attention to this so they can make sure they are buying the right type of policy,” advises Spaccarotella.
Another option for covering trip cancellation due to COVID is “cancel for any reason” coverage. This will reimburse you for a percentage (such as 75%) of your pre-paid, nonrefundable trip costs no matter what your reason is for canceling.
Squaremouth has seen a 200% increase in the purchase of cancellation coverage for trips in 2021 compared to a typical year.
More Policy Flexibility
Some travel insurance companies are now willing to accommodate requests for trip-date transfers. Travel Insured International, for instance, allows travelers to reschedule their departure date up to two years from the original date.
This allows you to postpone your trip—and your travel insurance—without canceling and rebooking.
Carol Mueller, vice president at Berkshire Hathaway Travel Protection, recommends working with a travel insurance company that’s willing to give you a voucher or that will extend your travel dates on the policy. Flexibility has become a key to good travel.