More than half of U.S. travelers planning to book trips will not insure their purchase, according to a survey of more than 1,200 Americans by ValuePenguin.
That’s despite the near-shutdown of global tourism, the struggle to get refunds on canceled spring and summer travel plans, and lingering questions over how and when airlines, cruise lines, hotels, theme parks and other travel industry sectors will get back up and running at full steam.
“Travel insurance is a tricky thing,” said ValuePenguin travel expert Brett Holzhauer. “If your travels have never gone wrong, you’re not really inclined to buy it.”
But due Covid-19, more people are realizing it can help, he said. Among those now planning some travel, 23% will definitely buy insurance and 21% may do so, ValuePenguin found.
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Americans seem to be eager to get out of the house and on the road again.
To that point, 61% of those surveyed plan to travel to visit family or friends once pandemic-related restrictions are lifted, and 17% are actively researching actual vacation destinations. Fourteen percent, meanwhile, are searching flight options and 10%, hotels.
The fact that most imminent travel looks to be family- and friends-oriented — and perhaps less expensive and closer to home — may account for the lack of interest in trip insurance, Holzhauer noted.
“When it comes to very large, luxurious and maybe big family trips where you’re spending maybe $10,000 or even $15,000, that’s something worth insuring,” he said. “But if they’re doing simple car rides across state lines or weekenders, it’s such a little amount to risk, it’s not really worth purchasing that insurance — at least not a separate policy.”
On average, Americans plan to spend $737 on their next trip, ValuePenguin found. Cancellation protection plans generally run 4% to 10% of total trip cost, according to insurance-comparison site SquareMouth.com, with additional fees for medical coverage.
Some people who say they won’t buy trip insurance might be counting on coverage from the credit card they use to book their trips. But, for the most part, “a lot of consumers don’t know how [credit card insurance] works and frankly may not even know that they have it, or how to utilize it or if a certain event qualifies to be covered,” Holzhauer said.
Still, the fact that even 23% of those planning to travel soon will buy insurance, and nearly as many are thinking of doing so, is good news for the travel insurance industry.
That figure nearly matches the 25% to 30% number that Cheryl Golden, director of e-commerce at InsureMyTrip.com, forecast earlier this spring for travel insurance sales among travelers post-pandemic.
That’s because crises that impact travel tend to cause a bump in insurance purchases. For example, before the 9/11 terror attacks in New York City, Pennsylvania and Washington, D.C., in 2001, about 7% of people bought travel insurance; after an initial surge in post-attack sales, the figure settled in at around 15%, Golden told CNBC last month.
“We expect there will be a similar rise after coronavirus,” Golden said. “It’s now spiked pretty dramatically.”
For the full results of the ValuePenguin survey, click here.