Before the pandemic, Lauren Mack, 44, a writer based in New York City, “did not routinely purchase travel insurance,” she wrote in an email. Covid-19 convinced her otherwise, and of six trips taken since the onset of the pandemic, she has had to file claims for three — twice for weather delays and once because her travel companion tested positive for the virus. Two are still under review, and the first took nearly two months from claim to reimbursement.
Though understanding what’s covered under travel insurance and what’s excluded continues to trip up consumers, comprehensive and “cancel for any reason” policies have emerged as a way to hedge nonrefundable bookings and seek restitution for travel interruptions as travel continues to be buffered by coronavirus waves and uncertainties related to the war in Ukraine. (Most travel insurance policies exclude war and civil unrest and will not protect your investment should the conflict in Ukraine spill over to neighboring countries.)
Now, getting a decision — or even an update — on a claim has become the latest problem consumers are experiencing with travel insurance, whether it has anything to do with Covid or not.
“The vetting and approval process of claims has slowed as a result of the pandemic,” said Kendra Thornton, the owner of Royal Travel & Tours, a travel agency based in Winnetka, Ill., who attributes the slowdown to the volume of claims. “Approved claims that typically used to be paid in under two months are now taking as much as five or more months.”
‘A safety net’
As Americans prepare to travel in large numbers again — Destination Analysts, a market research firm, recently found that more than 93 percent of Americans were planning a vacation in the next 12 months — many are considering travel insurance. Depending on the destination, you may be required to buy it; Belize, Fiji and Singapore are among those countries that require travel medical insurance to cover expenses should you contract the virus while visiting.
Cover Genius, an insurance technology company that embeds insurance sales during the course of booking travel at sites like Booking.com and Icelandair.com, saw sales increase six times over in 2021 compared to prepandemic figures. At WorldTrips, sales of travel medical insurance have spiked 67 percent for 2022 trips compared to 2019. The travel insurance company Seven Corners said sales were up 200 percent already in 2022 compared to the same period in 2021.
“Definitely with Omicron, we are busy getting questions and calls from customers asking what might be covered, and we have seen sales pick up over the past few months,” said Meghan Walch, the product manager for InsureMyTrip.com, an online marketplace for travel insurance that allows shoppers to filter for policies that cover Covid-19. “People are looking to get out there and learn how to travel now.”
Traditional insurance dealers aren’t the only ones chasing new buyers. In January, Marriott hotels teamed up with the insurer Allianz to offer travel insurance. When making a hotel booking online, travelers will be offered an insurance option at checkout. Beyond the cost of the room itself, the insurance can cover the total trip cost, which could include ski lift tickets and prepaid nonrefundable tours. The cost of the insurance is charged immediately, though the hotel rate is normally not due until the date of travel.
This spring, Airbnb plans to offer travel insurance that will cover the nonrefundable portions of a stay booked through the platform. It also recently launched a protection plan for travelers who are unable to travel because of Covid-related travel disruptions, such as border closures or quarantine requirements, that were not in place at the time of booking; in those cases, if an Airbnb reservation is not refundable, the company will offer a coupon for 50 percent of the cost of the nonrefundable part of the reservation for future use. Seemingly designed to cover the Omicron surge, the program runs to April 30 or until its $20 million fund is depleted.
“People are now more learned about travel insurance providing a safety net if they want to travel,” said Rajeev Shrivastava, the chief executive of VisitorsCoverage.com, an online marketplace for travel insurance. “There’s been a huge jump in sales, but also in inquiries.”
Clogged by claims
While travel insurance is becoming more ubiquitous, getting a timely response to a claim remains a challenge.
From the time a traveler files a claim to the time the insurer first responds varies, but typically takes five to 10 days, according to experts.
But virus surges, most recently Omicron, have clogged the system. At the online travel insurance retailer Squaremouth, about 27 percent of claims have been related to Covid-19 since the beginning of the pandemic. Currently nearly 40 percent are Covid-related.
“As an industry, we have seen an unprecedented spike in the number of Covid-related claims over the last two-plus years, which at times has translated into a backlog for many member companies who have been working around the clock to help their customers,” according to a statement provided by the U.S. Travel Insurance Association, a nonprofit trade group. “With the spike in claims, companies are increasing staff; however, new staff added must be trained and licensed prior to being allowed to adjudicate claims.”
Seven Corners is one of these, recently hiring seven new employees who are being trained in handling claims, for a total of 24.
“We’re trying to get ahead of any surge to come,” said Jeremy Murchland, the president of Seven Corners.
Marc Devens, a software product manager living in Jersey City, N.J., remains loyal to Seven Corners based on a substantial medical claim he and his wife made while living in China several years ago, which was handled efficiently. But last fall, he had trouble reaching someone at the company to update a policy for a December scuba diving trip to the Caribbean, though eventually it was ironed out and the trip came off without a problem.
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“The travel insurance industry is probably booming, but certainly they didn’t seem to anticipate it with more staff,” he said.
Expedite your claim
The best way to get expedited attention, say insurers, is to be organized and thorough in filing the required paperwork. Keep all related expense receipts, as well as any documentation of airline delays and cancellations.
Like other illnesses, if you contract Covid-19 (and it is covered under your plan), which prevents you from traveling, curtails your trip or results in a quarantine, keep treatment or diagnosis records from your health care providers. An at-home Covid test is not sufficient for a medical claim; insurers require results from a test administered by a medical professional accompanied by advice from a doctor not to travel.
In the case of lost baggage, it can be hard to remember everything you packed. For that reason, Stan Sandberg, a co-founder of the online marketplace TravelInsurance.com, recommends taking a photo of your suitcase packed and open.
Though insurance retailers don’t handle claims, many say they will jump in and help clients get attention. InsureMyTrip.com has a claims assistance program managed by representatives called “Anytime Advocates” who review your case if you’ve been denied or asked for more information.
“At times, when we have customers we feel are not getting the attention they deserve, we’ll escalate that with our partners,” Mr. Sandberg said. “We can apply a little pressure, but we’re not going to be helpful in making a claims decision.”
“While I had to endure longer than usual processing time for my claim to settle,” said Ms. Mack, the New York writer, “it ultimately did.” Now, she wrote in an email, “I will always purchase insurance — pandemic or not — because you never know what might happen during your travels.”
Elaine Glusac writes the Frugal Traveler column. Follow her on Instagram at @eglusac.