Travel Insurance – Will anyone actually buy it?
Many travelers were infuriated to learn that their travel insurance was worthless during this pandemic. That aggravation underscored one key truth: Buyer beware.
“Travel insurance is typically not a good economic deal; it’s usually way too expensive and filled with caveats and exclusions,” said J. Robert Hunter, the director of insurance for the Consumer Federation of America, a consumer-advocacy nonprofit.
If insurance companies are to rebuild consumer confidence — especially with airlines and hotels changing policies to make it easier to cancel — they will have little choice but to demystify the fine print. Customers will demand it.
“There’s going to be a lot more focus, rather than ticking a box and moving on,” said Anna Gladman, the chief executive of nib Travel, which owns World Nomads, a travel insurance company. “People are going to be concerned about catching this, so they’ll want to know more about their products.”
Travelers will be more likely to build plans from a “menu” (say, emergency evacuation and trip interruption) rather than relying on pre-bundled packages. And the demand for Cancel For Any Reason coverage — a costly add-on that partially reimburses policyholders when they cancel trips for any reason — is likely to increase.
But clarified information may make shopping less frustrating.
“We’re going to see more insurance carriers explicitly acknowledge pandemics in their policies, either clearly covering them or excluding them, in order to avoid mismanaged consumer expectations later on,” said Jennifer Fitzgerald, the co-founder and chief executive of the online insurance marketplace Policygenius.
Megan Moncrief, the chief marketing officer at Squaremouth, a travel insurance comparison website, said the industry will likely follow the precedent set by 9/11, which forced terrorism coverage into insurance policies.
“The biggest pivot in the industry is going to be more policies with pandemic coverage for things like C.D.C. alerts, travel advisories and stay-at-home orders,” Ms. Moncrief said.
Read the full New York Times article online here: https://www.nytimes.com/interactive/2020/05/06/travel/coronavirus-travel-questions.html