Forbes, Jan 27, 2021 – How Covid-19 Has Changed Travel Insurance Purchases
It has been about one year since the World Health Organization declared Covid-19 a global pandemic. The pandemic has dealt blows to many types of businesses, with the travel industry among the hardest hit.
We took a look at travel insurance data from trips booked in 2020, provided by Squaremouth, a travel insurance comparison site. Here’s how Covid-19 is changing travel insurance purchases.
Older Americans Took Fewer Trips
The average age of travelers dropped in 2020, as older Americans decided to sit out their usual trips.
The average traveler age in 2019 was 50, but by the end of 2020 the average traveler age dropped to 38, according to Squaremouth. This significant change in the average age of travelers was also reflected in the number of travel insurance policies purchased. Prior to the pandemic, the Baby Boomer generation (born between 1946-1964) insured the most trips. Currently, Generation X (born between 1965-1980) insures the most trips.
Caribbean Countries Become More Popular
While trips to soak up the sun on sandy beaches have always been in style, Caribbean countries saw their popularity skyrocket with American travelers last year. Of the 20 most popular international travel destinations, seven are Caribbean islands. But much of this had to do with international border closures and limited options for those looking for a getaway.
Prior to the pandemic, international trips made up 90% of all travel bookings. But in the 10 months following, international trips dropped to 67% of bookings. Previously, European countries dominated travel bookings, making up for 45% of all trips. But after international travel bans due to Covid-19, European trips accounted for less than 10% of travel going into 2021.
Some Caribbean countries that remained open to American travelers during the pandemic saw massive gains in trips from the previous year. For example, trips to Turks and Caicos increased by 303% and trips to the U.S. Virgin Islands increased 207%, according to a Squaremouth analysis of travel insurance policies purchased between March 12, 2020 and Oct. 19, 2020. By comparison, trips to the United Kingdom fell 56% during that same period.
Travelers Spent Less on Trips, Flexibility and Travel Insurance Will Be Key in 2021
Since the onset of the pandemic, the average trip cost has dropped by more than 13%. By the end of 2020, travelers were spending roughly $1,600 less on travel compared to the months preceding the pandemic, according to Squaremouth. This decrease in spending may be partially explained by travel deals.
With so much uncertainty surrounding travel and the pandemic, refundable bookings play a key role for travelers who want the ability to cancel a trip at the last minute. That same flexibility will be an important factor this year, as travelers book trips with the hope that they can get vaccines in time for their vacations.
Travel insurance is a good way to hedge your bets, even for last-minute vacations. Squaremouth has seen a trend of travelers booking and buying travel insurance much closer to their departure dates. Over the past three months, travelers have been buying travel insurance about 50 days before departure date compared to 94 days from departure date in the three months prior.
But keep in mind that if you wait too long to purchase your travel insurance, you will jeopardize your opportunity to buy cancel for any reason insurance. This coverage gives you the flexibility to cancel your trip for whatever reason and get reimbursement for a portion of your nonrefundable costs (usually 50% or 75%). But you typically need to buy cancel for any reason coverage type within 10 to 21 days of your initial trip deposit.
Read the full Forbes article online here: https://www.forbes.com/advisor/travel-insurance/covid-19-changes-purchases/