Travel insurance seems like a good idea to many, but you might just start avoiding paying for it if you travel often. Globe Newswire reports that the UK travel insurance industry is likely to hit $890M by 2025. American travel insurance seems to be growing as well. Still, the recent COVID-19 crisis might lead to a decline in the number of people opting to pay for it. With so few people getting their money back from insurance that was bought before the pandemic, it makes consumers ask whether this type of insurance really exists for their protection or whether it’s just another scam.
Not Covered for Everything
According to ABC News, the coronavirus has exposed some glaring gaps in what travel insurance covers when it comes to canceled trips. The fact is that most standard travel insurance only covers cancellations due to specific situations. A pandemic isn’t one of those situations. While travel insurance might include a visit to Express MRI, if you get injured during your vacation, it won’t cover your expenses for a trip canceled due to a worldwide viral outbreak. That is unless you buy the more expensive option.
Cancel For Any Reason (CFAR) Plans
Insurance providers also offer a Cancel For Any Reason (CFAR) plan, but there’s a catch. CFAR prices are significantly higher than regular insurance (sometimes as much as 25% more). The policies also need to be bought within a window after your trip is confirmed, usually within twenty-one (21) days. CFAR still only covers between 50% and 75% of the total cost of the journey, so you’ll always be losing money if you cancel, or have the flight canceled for you by a global viral outbreak. Unfortunately, many buyers were unaware of the differences between the insurance types, leaving them stuck with regular insurance that didn’t cover their trip cancellation.
Is Travel Insurance Even Worth It?
Most trip-takers have convinced themselves that travel insurance isn’t worth it. Those that often travel usually don’t even think twice about declining purchasing it along with their ticket. These recent events with people being unable to get their money back after paying for insurance highlights a massive problem with the travel insurance industry. That problem is that most people buy insurance with certain assumptions. Sometimes, those assumptions aren’t valid and can lead to financial loss as a result. The pandemic might do more to convince travelers that travel insurance is just another way for companies to scam them out of money.