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While many analysts are predicting travel levels to make considerable advances next year, recent data indicates travelers are not completely confident in the safety and likelihood of travel in 2021, as almost all travel insurance policies being purchased for the year ahead are including trip cancellation coverage.
With a COVID-19 vaccine on the brink of fruition and 2020 soon coming to an end, the world is more than ready to wake up from this nightmare of a year and get back to their normal lives.
The travel industry, especially, cannot wait for 2021 to arrive. With many travelers failing to satiate their travel appetites in 2020, the industry anticipates 2021 to be the year of travel, with many travelers looking to make up for their loss of travel this year.
Though the travel industry and travelers alike are relatively optimistic for the year ahead, recent data shows that travelers are not completely confident whether their travel dreams in 2021 will in fact become a reality.
While many travelers are booking their trips for next year, travel insurance comparison site Squaremouth is reporting that 95% of policies purchased for trips in 2021 are requiring trip cancellation.
Trip Cancellation Coverage Highest Ever
The figure is the highest Squaremouth has ever reported, and attributes the growth due to an apprehension and caution from travelers in the safety and likelihood of travel, even in 2021.
Although trip cancellation coverage is typically sought after in insurance policies in normal years, it has never been this dominant. Addressing this, CMO of Squaremouth, Megan Moncrief, stated:
“Trip cancellation has always been the primary driver of travel insurance purchases. We’ve seen this number range from 80 – 90% of our sales, but never this high.”
Biggest Increase in “Cancel for Any Reason” Coverage
Travel insurance policies including “cancel for any reason” coverage saw the biggest increase in purchases. Compared to a normal travel year, sales for this coverage grew by an astonishing 200%.
The growth in this form of coverage is particularly telling, as the inclusion raises the cost of a policy by 40%. Accordingly, the willingness of travelers to shell out this supplementary fee is indicative of their absence of complete confidence of worry-free travel next year.
However, Squaremouth experts note that general travel uncertainties, such as changes to who’s traveling and where, make up a portion of the sales.
Travel Insurance Consumers Getting Younger
The data relating to travel insurance policies being purchased revealed that younger travelers are beginning to prioritize coverage as a result of the pandemic.
Traditionally, the average age of the travel insurance consumer was between 50-60 years of age. This average travel insurance consumer now is someone in their mid 20’s.
The data is also reporting that travelers are continuing to stay within borders, as domestic travel is outpacing international trips. Uncertainty in regards to border closure is recognized as the cause of hesitation in travelers.
US Airlines Offering Flexibility to Entice Customers
While many travelers are opting to purchase travel insurance to relieve them of cancellation concerns, many US airline carriers have opted to revise their policies to align with the needs of travelers.
Though cancellation policies vary from airline to airline, many airlines are opting to waive cancellation fees for trips booked in 2020.
Southwest Airlines appears to be the most flexible US carrier, electing to remove all change and cancellation fees for all types of tickets purchased.
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