But the travel situation is constantly changing. As the travel industry adjusts on the fly, travelers also need to be able to adapt. Travel insurance is one of the best ways you can maintain that flexibility.
Americans Planning International Trips Despite New CDC Testing Requirements
On Jan. 21, 2021, the CDC issued a new rule that all air passengers who arrive in the U.S. from a foreign country must get tested for Covid no more than three days before their flights depart. And you must have a negative result—or documentation showing you’ve recovered from Covid-19—that you give to the airline before boarding the flight. This includes Americans coming back to the U.S. from abroad.
The CDC’s new rule hasn’t slowed down U.S. travelers who plan to travel internationally. More than 70% of bookings since the CDC’s announcement are for international destinations, according to Squaremouth, a travel insurance comparison website.
“We expected to see an immediate shift to domestic travel and a drop in international bookings, due to the added complication of coordinating a Covid test abroad, but that hasn’t been the case,” says Squaremouth spokesperson Megan Moncrief.
Squaremouth’s data shows that travelers are booking international trips 24% sooner than before the pandemic. Through most of the pandemic there has been a trend of last-minute trip bookings, most likely due to uncertainty around travel, changing quarantine requirements and workers with remote work flexibility.
U.S. travelers booking international trips are also spending more, according to Squaremouth. Travelers are insuring about $1,000 more per trip and 31% more on travel insurance.
Trip Cancellation Insurance Is a Must-Buy
“Trip cancellation has always been the primary driver of travel insurance purchases,” says Moncrief. “We’ve seen this number range from 80% to 90% of our sales, but never this high.”
Trip cancellation insurance reimburses the prepaid and non-refundable costs for your trip if you’re unable to travel due to an unforeseen circumstance. “Unforeseen circumstances” typically include serious injuries, natural disasters, death of you or a traveling companion, severe weather that makes a travel service unable to operate.
Generally, travel insurance companies consider pandemics a foreseeable event. But many travel insurance companies sell policies with Covid-related coverage, which makes trip cancellation a must buy. Ninety-five percent of travel insurance policies for trips in 2021 include trip cancellation coverage, according to Squaremouth.
Younger Travelers Are the Biggest Travel Insurance Buyers—For Now
So far this year senior travelers are staying home. Younger travelers have become the biggest buyers of travel insurance. Before Covid-19, travelers ages 50 and older bought travel insurance for the most trips.
“Historically, the typical travel insurance customer was retired, with time and money to travel, taking expensive and longer international trips,” Moncrief at Squaremouth observes.
Now the majority of travel insurance policies are now purchased by travelers under age 50, according to Squaremouth.
Regardless of your age, good travel medical insurance should be a priority if you’re taking an international trip. Most U.S.-based health plans won’t cover you outside the U.S. If you want coverage for illness and injuries on a trip abroad, purchase travel medical insurance. It’s a good idea to purchase a plan that covers Covid-related medical and trip cancellation coverage.
Younger Travelers Are the Biggest Travel Insurance Buyers—For Now
So far this year senior travelers are staying home. Younger travelers have become the biggest buyers of travel insurance. Before Covid-19, travelers ages 50 and older bought travel insurance for the most trips.
“Historically, the typical travel insurance customer was retired, with time and money to travel, taking expensive and longer international trips,” Moncrief at Squaremouth observes.
Now the majority of travel insurance policies are now purchased by travelers under age 50, according to Squaremouth.
Regardless of your age, good travel medical insurance should be a priority if you’re taking an international trip. Most U.S.-based health plans won’t cover you outside the U.S. If you want coverage for illness and injuries on a trip abroad, purchase travel medical insurance. It’s a good idea to purchase a plan that covers Covid-related medical and trip cancellation coverage.
Changing Travel Rules Boost Need for Cancel for Any Reason Coverage
There has been a 42% increase in cancel for any reason (CFAR) coverage for U.S. travelers booking international trips, according to Squaremouth.
Cancel for any reason coverage works like the name implies: You can cancel your trip no matter the reason, whether it’s Covid-related or you’d just prefer to spend a weekend working on a landscaping project.
CFAR coverage isn’t only for international travelers—it can be valuable coverage for anyone who wants the most flexibility to cancel a trip and get a portion of nonrefundable trip expenses reimbursed, no matter where you’re going.
The new CDC rule applies to air travel—and all American citizens—but not land border crossings.
If a rule like that changes your mind about taking a planned trip, CFAR coverage is your way out.
You typically need to buy cancel for any reason coverage within 14 to 21 days of your first trip payment. And this coverage does come with some restrictions. For example, you might have to cancel the trip within 48 hours of departure in order to make a CFAR claim, meaning you can’t cancel at the last minute.
While this coverage will increase the price of your travel insurance policy by about 40%, it’s become a popular option during Covid-19. Squaremouth has seen an increase of over 200% for cancel for any reason coverage for trips being booked for 2021.
Source: Nasdaq
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