Travelers Snap Up Insurance

Recent events and global unrest, leads to surge in sales of travel insurance.

By: David Jones

Continuing security concerns, economic uncertainty and global unrest, including the war in Iraq and the outbreak of SARS earlier this year, has spurred a surge in sales of travel insurance.

Executives at the nation’s top travel insurance firms estimate 20 percent to 25 percent of travelers now are buying coverage, nearly double the pre-Sept. 11 level of 8 percent to 10 percent.

“We basically take the stance that you’re mad if you don’t (buy travel insurance) given the state of the world today,” said Kate Schilling, vice president of Flight Centre USA, in Los Angeles.

Schilling says travel insurance sales are up about 150 percent at the agency since Sept. 11.

The surge is welcome news for financially-pressured agents, who are finding travel insurance a lucrative source of revenue.

And at a time of economic uncertainty in the industry and the recent bankruptcy filing of tour operator Far&Wide, which left thousands of travelers stranded, experts say travel insurance sales offer agents a certain amount of protection.

Clients will be less likely to pursue a case against an agency that offers travel insurance if a supplier goes out of business or a trip is interrupted, according to travel attorney Mark Pestronk, a Fairfax, Va.-based attorney who specializes in travel.

The boom in travel insurance sales has created fierce competition among the insurers, which have launched major changes in recent months.

“Almost all of the (insurance) plans have changed this summer,” said Jim Grace, president of, an East Greenwich, R.I.-based firm that allows consumers to compare and purchase multiple insurance policies.

Grace said many insurers have added coverage for domestic terrorism; others have increased health coverage and added coverage for medical evacuation. Still others have boosted commissions and added a variety of other coverage.

Among major shifts this year:

" Access America expanded its coverage to include acts of domestic terrorism if the act occurs within 30 days of the insured party’s arrival in the affected city. The firm previously offered coverage for international terrorism.

The company also extended trip-cancellation coverage to include domestic partners, home health care workers and live-in nannies. The company also now covers trip cancellation in the event of a pregnancy or if the insured is attending the childbirth of an immediate family member.

In addition, the firm also now covers trip cancellation if an airport is shut down by the Federal Aviation Administration.

" GlobalCare Insurance Services Inc., of Lynnfield, Mass., has added coverage for domestic terrorism and enhanced coverage for consumers who buy a policy online. The firm increased its emergency evacuation coverage to $250,000 for online purchases; policies purchased by phone, fax or mail have a maximum of $50,000.

Online medical and dental coverage rose from $10,000 to $50,000, while travel delay coverage went from $750 to $1,000. Travelers over age 81 are now covered for pre-existing medical conditions when they buy a deluxe insurance plan.

Travel agents who book GlobalCare policies online can earn an additional 2 percentage points on commissions, which start at 20 percent.

" CSA Travel Protection has begun offering a special last-minute booking coverage called the Impulse Travel Discount, which offers a 15 percent discount off the CSA Vacation Guarantee Gold or Silver plans. Most Silver Plans range from $17 to $1,159, depending on the trip cost and age of the traveler. Most Gold Plan rates range from $27 to $1,839. Gold plans include supplier default coverage and a waiver for pre-existing medical conditions.

" RBC Insurance is entering the U.S. travel insurance market, offering trip cancellation and interruption, emergency assistance and other travel related products and services.

The company will initially launch its products, which will be distributed through travel agents across the United States under the brand name of RBC Travel Protection, in 34 states and plans to expand nationwide by the end of the year, subject to regulatory approvals.

" Travel Guard International, of Stevens Point, Wis., has increased its emergency medical transportation coverage to $300,000 from $20,000 and its medical expense coverage to $50,000 from $10,000 under the Cruise, Tour and Travel plan. Pricing for most policies range from $33 to $3,251 per person under this plan. Emergency medical transportation coverage under the ProtectAssist plan was also raised to $300,000 and medical expense coverage was raised to $25,000. Most prices under the ProtectAssist plan, designed for more budget-conscious travelers, range from $22 to $2,275.

As the travel insurance market heats up among independent insurers, travelers also are finding various cruise lines and tour companies offering insurance.

Still, insurance executives caution that travelers should be careful when buying these policies, because in previous bankruptcies or shutdowns, many travelers have not been able to collect refunds on lost vacations.

Edina, Minn.-based MLT Vacations Inc. recently introduced a plan that allows travelers to cancel trips 48 hours before the scheduled departure for any reason. The plan, which costs $49 and $119, also provides limited coverage for trip interruption, delay, medical expenses and loss or damage to luggage.

MLT offers 20 percent commission on insurance sales, and has a “stepped-up” commission rate for agencies that have preferred agreements.

Still, experts say that regardless of the type of insurance or protection plan being considered, agents and travelers need to read the fine print on all policies. Most policies have deadlines, exclusions and other provisions that apply.