In late 2019, the pandemic brought the world to a standstill – even now, we face the virus’ unprecedented implications on our lifestyles, communities, and economies. The incomparable nature of this crisis has made it hard to assess the coronavirus’s impact on the travel industry. However, as vaccines roll out, travelers are keen to get back out into the world. Another aspect that has been forced to adapt to COVID-19 challenges is travel insurance – and perhaps these changes are more important than ever.
COVID-19 Pandemic Impact on Travel Insurance
When the pandemic first struck the globe, holidaymakers didn’t anticipate the impact COVID-19 would have on their lifestyles. Early in 2020, the demand for travel insurance soared in countries worldwide, with one UK travel insurance company reporting a 277% increase in policy sales within seven days and a total of 159% year-on-year.
During a global pandemic, it comes as no surprise that both travel advisors and travelers alike have travel insurance on the brain. However, the outbreak of the coronavirus brought many system flaws to light. The fine print was always there – but many revelations about what it actually says became apparent when COVID-19 reared its ugly head.
Of course, pandemics were listed in most policies – on a long list of things that weren’t covered.
Policyholders who did have travel insurance in 2020 quickly discovered that they had little protection against the global pandemic. The fact of the matter is that most travel insurance policies were not designed to deal with a pandemic.
In true pandemic fashion, this has created additional chaos with travel insurers facing lawsuits. A news analysis: COVID and the travel insurance industry in the International Travel and Health Insurance Journal (ITIJ) shares insights into the adverse effects the pandemic has had on the industry and how making drastic changes to insurance coverage doesn’t just happen overnight. Over the past 12 tumultuous months, we have seen travel companies and big corporates make significant moves in a bid to navigate the uncertainties of COVID-19. That being said, it takes time for products to adapt to the market.
So, what kind of reassurance does travel coverage offer in 2021?
Navigating the New World of Travel Insurance
Fast forward to 2021, the travel insurance industry has had to rethink its approach – as with almost every other industry affected by the pandemic. Policies have been amended to better protect travelers from disease and other unforeseen phenomena.
With many travelers more clued up on policies now, policyholders are likely to double-check the fine print and adjust coverage to ensure finer details such as “travel disruption cover” or “virus-related disruption”.
Travelers aren’t the only ones seeking out medical insurance – countries are jumping on the bandwagon too. Before the COVID-19 outbreak, destinations rarely enforced medical or travel insurance for incoming travelers. However, that’s rapidly changing, as a growing list of destinations now require coverage as a prerequisite for entry, including – the Bahamas, Aruba, Jamaica, and Costa Rica.
This makes logical sense since any tourist that gets sick while in the country taxes the medical system – and in the instance that the traveler can’t pay for these expenses, medical insurance ensures these nations are protected.
At present, requirements vary from nation to nation. But Costa Rica has already mandated travel insurance to cover quarantine accommodation for at least US$ 2,000 and COVID-19 related medical expenses for at least US$ 50,000.
The travel insurance industry is set to make a stellar recovery. Global Market Insights, Inc. recently shared a report on the travel insurance market, which estimates industry valuation will cross US$ 45 billion by 2027 — further bolstered by the fact that travel insurance companies are beginning to offer attractive policies to strengthen the customer base.
Naturally, the roll-out of coronavirus vaccines is a significant development for the travel industry’s recovery, while COVID-19 travel policy enhancements will reassure consumers, help them navigate uncertain terrain, and possibly encourage them to consider booking their next trip.
What Type of Travel Coverage Do You Need?
According to CreditCards.com, comprehensive travel insurance is by far the most popular. It bundles everything from travel delays and accidental death to dental and evacuation coverage, all for a flat fee.
Comprehensive is not the only option though – it all depends on your reasons for traveling, what you plan to do, and where you plan to go.
There are also a few things to be aware of when purchasing insurance, including exclusions such as preexisting medical conditions as well as changes and benefit removals in the weeks leading up to your trip. You can read the full CreditCards.com guide to purchasing travel insurance here.
Overall, travelers can expect to experience major changes to travel insurance in 2021. Although it is unclear whether all of these factors will cause insurance premiums to rise – as long as the virus continues to disrupt international travel and livelihoods, travel coverage is essential at this point. Looking ahead many regular travelers may feel that coverage will continue to be an essential – pandemic or no pandemic.