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The Dollars And Sense Of Travel Insurance
More and more budget-minded travelers are realizing that travel insurance can be a wise financial decision when planning a trip. The US Travel Insurance Association estimates that travel insurance sales have tripled since 9/11, providing protection for more than 30 percent of leisure travelers.
A recently released UStiA consumer survey revealed the top reasons for purchasing travel insurance are: protecting the vacation investment, coverage for unforeseen events and having peace of mind
Potential Loss is Motivating Factor
Travelers tend to buy insurance when the potential loss is greatest according to The 2006 Travel Insurance Consumer Survey conducted on behalf of UStiA. Prime motivating factors are financial in nature, including:- My trip is expensive
- I want to get money back if I have to change my trip
- I have to pre-pay for my trip
According to the survey, travel insurance buyers tend to take more expensive trips than the uninsured ($3,700 vs. $2,100), have higher pre-paid non-refundable expenses, take longer trips (8.8 nights vs. 7.3), and/or travel with a larger group (3.6 vs. 2.8 people).
Misperceptions Cost Money
The survey also showed that even more travelers would buy insurance if they had more accurate perceptions about coverage they don’t have from other sources.“Many consumers think their health insurance protects them on the road, but many plans don’t have out-of-country coverage and some don’t even protect you if you are more than 100 miles from home,” says Jon Ansell, UStiA Immediate Past President.
“Many people mistakenly think their credit cards cover trip cancellation and that travel suppliers will reimburse travelers who have to cancel trips. However if something goes wrong, these miscalculations can be costly without travel insurance. Medical evacuation alone can cost tens of thousands of dollars,” observes Ansell.
And while many people think they may never need travel insurance, statistics show that they might. In fact, 17% – or one out of every six people – who buy travel insurance file a claim. By comparison, the claim frequency rate for homeowners insurance in 2004 (the last available year) was 7.3% – or one out of every 14 policyholders, according to the Insurance Information Institute.