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 InsureMyTrip.com, 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.
