COVID has spread uncertainty and worries among travelers in the last 18 months, turning travel insurance into a must-have item. At TravelInsurance.com, a site that allows you to compare and buy travel insurance plans, co-CEO Stan Sandberg has noticed signs of a return to normalcy. As Americans are starting to plan their 2022 trips, I caught up with Sandberg to discuss the future of travel — and travel insurance.
What are your thoughts on travel next year? Is it going to be the first normal year since 2019, or do we have to wait another year?
I’m not ready to label 2022 a pre-COVID, normal year. There will definitely be segments of the travel market and destinations in 2022 that will approach or exceed 2019 volumes, but there are still big challenges.
The cruise industry is still many months away from getting back to sailing capacity. Travel restrictions remain in place for a number of countries. It’s clear from our customer base that because of the restrictions, significantly fewer travelers are booking trips to Australia and New Zealand, as well as East and Southeast Asia. When these countries eventually lift travel restrictions, we expect the demand for travel to these destinations will skyrocket.
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So as you look forward to the 2022 travel season, what do you see?
So far the 2022 travel season is shaping up to be quite different from what we saw in 2021. This year was a year dominated primarily by domestic travel. Next year, we’re seeing strong growth in travel bookings to Europe for 2022. Italy, the UK, France, Spain and Greece have seen the biggest uptick.
We’re also seeing continued growth in travel to the Caribbean, Mexico and Costa Rica, which all also stood out as the top international destinations in 2021. Islands that have minimized COVID rates and countries that have manageable entry requirements will continue to be popular destinations in 2022.
What’s the appetite for travel now versus before the pandemic?
A few years ago, we had a lot of window shoppers who weren’t sure about the importance of travel insurance. Today, it’s not a question of “should I buy travel insurance?,” but rather “which travel insurance plan should I buy?” As a leading comparison site, TravelInsurance.com is glad to help.
What’s the biggest change in travel insurance since the pandemic? How has that affected your customers?
The biggest change was the elimination from most travel insurance plans of the general exclusion for epidemics or pandemics.
In reality, this single change had to happen, or the travel insurance industry wouldn’t have had any product to sell in the last year and a half. As a result of this change, the industry has started to handle COVID-19 like any other unexpected illness.
What does that mean?
For most travel insurance policyholders today, if they contract COVID before or during their trips, a range of benefits will be available to them. The benefits include trip cancellation or interruption coverage, emergency medical expense coverage and trip delay coverage.
We’ve heard a lot about cancel for any reason policies lately. Are those becoming more popular?
We also saw a dramatic increase in policy sales with the cancel for any reason optional upgrade, which extends cancellation coverage to include government border closings, mandatory quarantines, and the fear of traveling because of the pandemic.
But there’s a catch, right?
Yes. Cancel for any reason policies typically reimburse up to 75% of the trip costs, not 100%, and can be used up to two days before departure. The optional upgrade can be pricey, but it gives travelers the most flexibility and a sure way to protect the investments in their trips.
What surprised you the most about travel insurance during the pandemic — either positively or negatively?
Maybe the biggest surprise was that interest in travel insurance never tapered off even when travel became impossible with the travel shut-downs in 2020. We continued to see robust traffic to TravelInsurance.com despite the drop in international travel bookings. Even if we couldn’t pursue our wanderlust in 2020, we never stopped dreaming of the trips we’d take in 2021 and beyond.
That’s really interesting. So travel changed, but people kept buying insurance?
As it turned out, many people stayed close to home in 2021, focused on vacations in national parks and other domestic destinations that may have been lower on a traveler’s bucket list. As international destinations opened up this last summer, Greece became a much sought-after destination.
So perhaps my biggest surprise was the resilience of the travel market. There continues to be an enormous pent-up demand for travel, which should be good news for 2022.
If you could give travel insurance companies a letter grade for the way they handled their pandemic claims, what would it be? Are there any standouts?
If I can give an A for effort, I’d give that grade to all of the partners on TravelInsurance.com. Despite not having any precedent in the travel market, most travel insurance companies made decisions from the get-go that put customers first. Travel insurance carriers accommodated travelers who had trips postponed, offering vouchers to be applied to future travel, a feature that we really hadn’t seen before the pandemic.
Did anyone deserve an F?
One area where all travel insurance providers could have done better was in staffing levels at their customer service call centers. Many were not prepared for the deluge of customer calls in the early months of the pandemic. Over time, the travel insurance providers addressed the customer service backlog by hiring additional customer service reps, offering enhanced online customer contact, and live chat.
What’s the biggest mistake that you see travelers making when they consider travel insurance for their 2022 trips?
Many travelers today have the misconception that trip cancellation plans will provide coverage when a border closes or a country implements a mandatory quarantine.
Trip cancellation in standard travel insurance will cover a wide range of travel disruptions, including getting sick unexpectedly, hurricanes, work-related disruptions, and many more. However, unexpected border closings and mandatory government-imposed quarantines upon arrival are not included in standard trip cancellation plans.
Is there a workaround?
We can offer plans with optional cancel for any reason coverage, which will allow travelers to cancel their trips if the border closes or a mandatory quarantine is put in place.
How about the timing of a travel insurance purchase? Is it ever too late to buy insurance?
One other mistake travelers make is not purchasing their travel insurance early enough in the trip planning process to qualify for certain key benefits. The availability of important benefits such as a pre-existing condition waiver and a cancel for any reason option is tied to when a customer made the first payment towards a trip. These time-sensitive benefits are typically only available when the travel insurance plan is bought within 7-21 days from the day they made their initial trip payment. In other words, many travelers won’t be able to find plans with cancel for any reason or a pre-existing condition waiver if they wait too long to shop for their insurance.
Who doesn’t need travel insurance?
I can make a strong case for almost every traveler to buy travel insurance. It’s important to remember that travel insurance can meet different objectives for different travelers. Trip cancellation protects a traveler’s hard-earned money invested in a trip in the event of a covered cancellation.
Other benefits such as trip delay, baggage delay and baggage loss will provide reimbursement for unexpected additional expenses that result from a lot of very common travel disruptions such as weather delays, airline mechanical issues, and lost luggage. These benefits can help reduce the frustration travelers experience when faced with these commonplace inconveniences.
But for some travelers, the key protection under a travel insurance plan is the emergency travel medical expense and emergency evacuation coverage. The medical expense coverage is a must-have for travelers who have more limited coverage under their personal health benefits. And we’ve seen a number of countries begin to require travelers to show proof of medical expense coverage as an entry requirement.
The reality today is that the overall travel industry is still coming back online after a year and a half of disruption. Mishaps with airlines, cruise companies and hotels are inevitable for the foreseeable future. While not a cure-all for travel disasters, travel insurance can at least take the financial sting out of a lot of travel perils.
I understand that. But are you telling me that if I’m driving up to grandma’s house for Thanksgiving — I’m not staying in a hotel or flying — and I’m staying in my home state, that I need a travel insurance policy?
If you are driving to grandma’s house this Thanksgiving, you have no trip expenses at stake and you have existing medical coverage for the region, you really won’t need the main benefits in most travel insurance plans. Still, some plans can include travel services that may have an appeal in that scenario, such as 24/7 roadside assistance and concierge services.
Nevertheless, travel insurance is designed to protect travel when there are real costs at stake — either the investment in a trip or the unexpected medical expenses incurred on a trip.
Competition for customers in the travel insurance space is more intense than any other time I can remember. How is TravelInsurance.com different from some of its competitors?
I founded TravelInsurance.com with my business partner and co-founder, Drew Sharma, with one goal in mind — that is, to simplify the world of travel insurance and give consumers the confidence to purchase travel insurance on their own.
We haven’t deviated from our original mission and believe our success is driven by our consumer-first approach. TravelInsurance.com partners with some of the industry’s most recognizable global insurance companies, and we only work with those companies that have consistently demonstrated a high level of customer service.
Unlike some of the other comparison websites, TravelInsurance.com is truly independent and unbiased in our presentation of plan options. We are proud of the fact that we are not owned by an insurance carrier. And more importantly, we do not favor our own “house” branded travel insurance plans. TravelInsurance.com is a one-stop choice offering a full range of provider and plan options where we make researching, comparing and buying travel insurance easy.
What’s the next big thing in travel insurance? How can travelers take advantage of it?
Looking out to 2022 and beyond, we can expect to see continued innovation in travel insurance coverage to meet the changing global travel environment. We are likely to see plans with an expanded range of covered trip cancellation reasons and more plans that provide coverage for common travel inconveniences.
We will also see innovation on the claims side. This was already in the works before the pandemic. The insurance carriers and claims providers are constantly looking for ways to make the process more efficient and consumer-friendly. We also expect to see more product specialization, such as for cruise travelers and adventure travelers.