Travel Insurance Sector Is Soaring Amid Increased Consumer Spending and Concerns

The travel
insurance sector is experiencing a meteoric rise, according to the U.S. Travel Insurance Association’s (UStiA) latest
market report, which paints a picture of remarkable growth in the sector.
According to its analysis, U.S. Total Consumer Spend on Travel Protection
surged to $4.27 billion in 2022, marking a staggering 143.9 percent increase
from the UStiA’s findings in 2020.

Additionally, the
Total Number of Persons Protected reached 77.41 million in 2022, significantly
surpassing the pre-pandemic figure of 65.99 million levels. These numbers stand
in stark contrast to two decades ago, when only 10.7 million individuals were
covered by travel insurance.

As for 2024,
certain trends and observations are emerging when it comes to U.S. consumers’ attitudes
and preferences toward travel insurance.

With the approach
of spring beckoning travelers to embark on fresh adventures, leading travel
insurance comparison site Squaremouth has revealed its latest research. The company
recently conducted a survey of more than 5,000 customers, asking them about
their itineraries, their frame of mind and any concerns they might have about their
upcoming springtime escapes. 

Medical
Emergencies Are a Top Concern

The majority (75
percent) of respondents expressed anxiety about falling ill or getting injured
before or during their trip, highlighting the paramount importance of medical
coverage. Among these, 22 percent cited pre-trip health concerns as their top
worry, fearing cancellation due to unforeseen medical issues.

Trip Cancellation
coverage emerges as a vital safeguard against such eventualities, reimbursing
travelers up to 100 percent—even for prepaid, non-refundable trip costs—in case
of unexpected health-related cancellations. Squaremouth recommends early
purchase of travel insurance to maximize coverage duration. It said that, as a
rule, travelers should purchase their trip protection soon after making initial
trip payments, such as for flights or hotel stays.

Patient and EMT inside a medical emergency evacuation helicopter. (Photo Credit: Adobe Stock/thanarak)

Navigating
Medical Emergencies Abroad

With many primary
health insurance plans lacking international coverage, the prospect of high
out-of-pocket expenses looms over travelers who have a medical issue occur
abroad. More than half of survey participants (53 percent) expressed
apprehension about encountering medical emergencies during their journeys.

Fortunately, most
travel insurance plans offer comprehensive medical benefits, including
Emergency Medical and Medical Evacuation coverage. This kind of protection is
designed to reimburse customers for medical expenses they might incur at any
stage of their journey. Squaremouth advises travelers to ensure adequate
coverage, suggesting a minimum of $50,000 for Emergency Medical and $100,000
for Medical Evacuation, with adjustments based on their chosen destination and
itinerary.

Rising Trip
Costs Call for Cancellation Coverage

As the cost of
international travel has reportedly surged by 40 percent over last spring,
travelers are spending more on their getaways and are therefore increasingly concerned
with safeguarding their investments. Squaremouth’s survey revealed a
significant uptick in overall travel spending, with 47 percent of consumers allocating more funds to travel than previous spring trips.

Addressing consumers’
concerns about the potential need to cancel trips for whatever reason, Squaremouth
advocates for comprehensive insurance policies encompassing Trip Cancellation,
Trip Interruption, and Cancel for Any Reason coverage. These safeguards can provide
peace of mind amid life’s uncertainties, ensuring that travelers can navigate any
disruption with confidence.

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