Forbes Advisor recently analyzed travel insurance data from Squaremouth to uncover consumer purchasing trends and other findings about the current state of the travel market.
The report’s primary takeaway is that Americans are still planning overseas trips for 2022 and beyond, and are shelling out even more for those getaways than they would have prior to the pandemic.
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Travel insurance sales data suggests that sun, sand and surf are still in high demand among vacationers booking international trips, with Mexico emerging as the leading destination among Americans who are going abroad, followed by Turks and Caicos, and Costa Rica.
COVID Concerns
Among travel insurance purchasers, COVID-19 concerns have continued to be top-of-mind. “Americans are booking vacations but are taking a more cautious approach, as seen in how they’re using travel insurance as a tool to guard against trouble,” said Amy Danise, Chief Insurance Analyst of Forbes Advisor.
Since not all policies cover COVID-related issues, buyers need to be choosey. Policies that do include pandemic protection typically cover COVID-related trip cancellations if, for example, you come down with COVID-19 just before your trip; and COVID-linked medical expenses, should you contract the virus during your trip.
American travelers’ top destinations, based on insurance purchases made between March 2020 and July 2021. (graphic courtesy of Forbes Advisor)
The report also shows that interest in “cancel for any reason” (CFAR) coverage has doubled since pre-pandemic times. Those traveling to the U.S. Virgin Islands, domestically within the U.S. and to Italy have demonstrated the strongest demand for adding a CFAR clause onto their policy.
CFAR coverage is especially desirable amid the ongoing pandemic because standard trip cancellation does not cover cancellations made due to travel advisories, though not all travel insurers even offer this policy upgrade. Currently, about 11 percent of travel insurance purchasers are specifically seeking policies with CFAR coverage, compared to just five percent prior to the pandemic.
Also indicative of a cautious approach, many customers are purchasing travel insurance policies well ahead of time—five months on average among those headed to The Bahamas, for example. Increasingly, advance planning is also evident among Americans bound for destinations like South Africa, Italy, Germany, France and Canada.
Increase in interest in “cancel for any reason” travel insurance coverage since the onset of COVID-19. (graphic courtesy of Forbes Advisor)
Pandemic Pricing
Squaremouth’s sales data also shows that the most expensive getaways being booked by Americans are to South Africa, followed by Greece and Italy. Perhaps because they’ve felt pent-up at home for the past 18 months, U.S. travelers also appear to be paying more for their trips than they did prior to the pandemic.
Costs in many destinations have gone up and average traveler spending has also markedly increased in comparison with the pre-pandemic era.
“With vacations delayed from 2020 and people eager to stop looking at the same four walls, Americans are now spending more on trips for many destinations,” Danise said. “For example, the average trip cost to South Africa pre-pandemic was already high at almost $10,000. Now, South Africa trips are averaging close to $12,000.”
