Margaret Mullins, CTC
Part of being a valued travel advisor is having a good working knowledge of travel insurance and the ability to express its importance to clients. During this unprecedented time in our nation’s history travel insurance seemed to be useless due to the fact that many policies will not cover an epidemic. This paper will discuss that value and how relevant it will be post COVID-19.
Travel insurance will cover a traveler for a variety of items including trip cancellation or trip interruption, baggage delay or missing baggage, and emergency medical and dental coverage along with other items depending on the policy. The topic of travel insurance is quite necessary and can be challenging to discuss with the traveler. As a travel advisor I hear many objections such as “We are going on this trip no matter what” or “The cost is too high” and my favorite, “I have coverage with my credit card”.
People who buy travel insurance seem to be well-educated, travel more frequently, and have higher household incomes then those who don’t. (UStiA Press) Customers who fit this criteria may be an easier sell, but not necessarily definite. Consumers outside of this box may not feel it is really a necessity or understand its value.
The biggest objection to travel insurance, in my experience, seems to be the cost. Understandably some customers who are booking on a tight budget often do not want to pay the additional cost to protect their trip which seems to average about ten percent of the trip cost. That is money they feel they need to purchase extra things such as excursions and drink packages. When your customer is truly counting every penny it can be a tough sell. Customers with a larger budget who have no problem spending tens of thousands of dollars and a vacation are not necessarily concerned about spending money, they just feel it a waste.
My approach is to treat it as any other type of insurance and explain that they don’t anticipate being in a car accident or having a major medical issue but they still carry insurance on themselves, and their properties. Vacations are a large investment whether your budget is big or small. If something devastating were to happen it would be a shame to lose your money not to be protected.
I typically like to share personal stories that seem to help the traveler understand what can happen. Most travel agents have had a client who refused to purchase travel insurance and lost money. Those insights seem to be the best examples to prove the value of insurance. A personal story can go far to paint a picture for your client of what happened to someone else when they thought nothing can go wrong.
Customers who believe they have coverage from their credit card company are another large group. There are so many credit card companies out there it would be overwhelming for any agent to have a working knowledge of all of the allowances and coverages for all of them. I typically urge a client who wants to rely on that method to call their credit card company and confirm with them all the ins and outs of the coverages and give them some information to compare what needs to be covered so they can make a decision. Most of these customers who have a concern about coverage will soon be back to purchase insurance though the agency.
According to Allianz Global Assistance Consumers who are more informed about the value of travel insurance are more likely to buy it. (UStiA Press) Seemingly your best bet is to know the value of the product you’re selling and relay it to the traveler. Anyone can purchase a cruise or tour on their own, but the reason they come to a travel agent is to gain greater knowledge of what they are getting for their money and being sure they have everything they need. Along with travel insurance providing peace of mind, so does the travel advisor.
Trip interruption is only a part of what insurance offers. The interruption benefit along with the emergency medical coverage many times work hand in hand together creating great value. If a traveler is injured and must return immediately from their trip many times they will also need medical assistance. A large number of consumers do not understand that they are potentially not covered on their personal medical insurance when they are travelling abroad. This can be significant of the consumer has any know medical history. If a traveler feels they are more likely to have a medical incident when traveling they may want to be confident they will have their need met should an incident arise while they are away from home.
When considering policies for travel it may be valuable to offer the customer a policy that the emergency medical dental coverage is considered primary insurance and not secondary. This could not only save them thousands of dollars in up front medical cost, but can also save them a lot of time in the claims process. A secondary insurance policy would force the consumer to file a claim with the primary provider and prove they were denied prior to filing with their travel insurance company. This can cause long delays and headaches while waiting for reimbursement.
Another big factor when selling travel insurance is to purchase it in a timely manner. In my experience the longest time to purchase a policy and be covered for preexisting conditions is fourteen days. In some cases you may have to purchase the policy at the time of deposit. It is important to be aware of the policies you work with and their requirements to best advise your client. Not all consumers are willing to be upfront about any personal medical information so it is necessary that you are transparent about what is covered and when it is covered for them to make an educated decision.
As I previously stated many insurance policies have other components such are baggage delay or lost baggage pay outs and even trip delay reimbursements. These may vary policy to policy and are to me secondary to finding the best fit for Cancellation and interruptions. Your best weapon in defending your customer’s vacation costs is to take time to educate yourself on the products to present to the consumer so they can make the best decision possible.
It is important to be forthcoming in what you know about the policies as well as when you do not know. One thing that has come up in my office a couple of times deal with mental illness. That is not something that is covered or something people enjoy talking about. As an example Allianz Global assistance singles out a few things here that re a normal part now of life:
What’s Not Covered by Travel Insurance?
Not all illnesses and conditions can be covered by travel insurance. Before you travel, read your plan documents so you understand what kinds of things are excluded. These include, but are not limited to:
• A mental or nervous health disorder, as recognized by the American Psychiatric Association, including but not limited to Alzheimer’s disease, anxiety, dementia, depression, neurosis, psychosis, or any related physical symptoms. (This exclusion applies only to trip cancellation coverage, trip interruption coverage, emergency transportation coverage, and emergency medical/dental coverage.
• An epidemic
• Any illness and injury caused by the use or abuse of alcohol or drugs, or any related physical symptoms (Allianz)
I typically share that Dementia is not covered as an example and make a statement about mental illness not being a covered item. Many travelers have elderly parent today and I just want them to realize this information. Mental illness can be a hard item to bring up but it is very necessary for the travelers to be aware how it is handled by many travel insurance companies.
The next item listed…the dreaded epidemic. COVID-19 has changed all of our lives. While this virus has further escalated to a pandemic many consumers are dismayed over their current situation of not having any coverage. This is a challenge to myself and my colleagues as we navigate through the barrage of cancellations by tour companies. While many companies are offering their valued guests future tour or cruise credits, it is not always the case that the travelers may be able to use the in the future. While they are slowly coming to terms with that, it does bring up a valid point…how can I sell travel insurance in a post pandemic world?
The good news is that travel insurance will still be relevant for all of the above reasons. People in their normal day to day lives experience valid reasons to both cancel vacation plans, post pone them, and that they may be interrupted. Medical insurance may become more important than ever when traveling abroad. Moving forward countries may have for stringent requirements for carrying medical insurance when visiting them for shorter periods of time. Considering the fact that insurance companies in general do not cover mental illness or an epidemic it may be that moving forward travel agents will need to find a sell a good policy that offers guests the option to cancel for any reason.
The cancel for any reason policy gives the consumer flexibility in deciding when and why they cancel. I recall back in 2017 when hurricane Maria took center stage many travelers were frightened to be traveling to the Caribbean. Our office took many calls over this concern. In the end if you did not have a cancel for any reason policy you were forced to take your trip knowing full well you were quite possibly putting yourself in harm’s way, or lose your vacation investment. While nature is hard to predict when you are booking a vacation in January for a trip in September, you can rest assured with a cancel for any reason policy you will be protected if you feel uncomfortable with travel.
As you may see it may take quite some time with a resistant client to cover all the reasons why travel insurance is vital to any trip purchase. It is well worth the investment of educating yourself on coverages, costs, and client needs to assist them with making an educated decision about their investment. A travel agent who takes the time to share their product knowledge and the experience of other travelers who had success or failures regarding their purchase or decline of travel issuance is invaluable.
References:
UStiA Press
https://www.ustia.org/new-study-reveals-who-buys-travel-insurance-demand-triples.html
Allianz Global Assistance
https://www.allianztravelinsurance.com/travel/medical/covered-illness-pre-existing-condition.htm
