Omicron emergence leads to travel insurance spike
Travel insurance recently broke a sales record, according to Squaremouth, which has seen demand grow by more than 50%.
Since news of the omicron variant of COVID-19, travel insurance sales have grown 53%, according to policy comparison site Squaremouth, which reports sales continue to reach new highs.
Travel insurance sales grew 20% following news of the delta variant, Squaremouth offers for comparison.
“In recent months, border openings seemed to increase traveler confidence, leading to more trip bookings. We believe the significant spike in travel insurance sales following the omicron variant is directly related to the increase in trips that were booked in the preceding months,” Megan Moncrief, Squaremouth CMO, tells PropertyCasualty360.com. “When news of the delta variant broke, for example, international travel hadn’t yet rebounded the way it is now. Travelers may have had less to lose, or simply weren’t traveling yet.”
Squaremouth cautioned against being too quick to buy travel insurance, as some concerns propelled by the latest COVID variant might not be covered. For example, border closing might not be covered outright by a travel insurance policy. Select policies might allow a traveler to cancel due to a government-issued travel warning, but they need to be purchased before the warning is issued.
Quarantine restrictions either at their destination or upon their return might have travelers reconsidering their plans, as these concerns are not typically covered by standard policies, according to Squaremouth.
Those seeking more coverage as the latest COVID variant rises concerns can opt for cancel for any reason coverage (CFAR), if it is still an option. Since CFAR is only available for a short time, those that booked a trip at least a month before the latest pandemic news might be out of luck.
Moncrief explains providers assume more risk with CFAR policies, and the longer coverage is in place the higher the probability of something would trigger a claim.
“It is limited to a short time after booking to prevent customers from fraudulently buying a policy just to file a claim,” she adds.
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