Insurance premiums soar amid travel chaos

Flight cancellations, lost luggage, COVID-19, and many other travel disruptions have caused travel insurance claims to skyrocket, with insurance premiums and extra costs through the roof.

Australian travelers of all ages across the spectrum bear the brunt of these economic headwinds.

Older Australians are now finding it difficult or very expensive to pay their insurance premiums due to the already high premiums being raised.

And despite early data showing young Australians are more willing to buy travel insurance than ever before, factors such as rising inflation and more expensive insurance remain major barriers. is proven.

For 55-year-old Vanessa Fielden, who flies back and forth between Melbourne and Bali, finding insurance that includes unlimited medical coverage and repatriation insurance was non-negotiable.

“My policy includes flying to Singapore if necessary,” said the medical worker, who procured a comprehensive policy of discounted rates through her auto insurance company.

However, Fielden remains concerned about the affordability of future coverage as COVID-19 continues to push up premiums. “After I turn 60, I think we need to look at what is going on in the world at that time and what the cost is.”

Arie Malpass, 30, did not have travel insurance on her recent trip to Tasmania with her boyfriend. The move cost her around $1000 after a series of flight cancellations left her stranded in Hobart.

“I looked into travel insurance in the country, but it was very expensive with minimal coverage, over $1,000 for the rental car alone,” said the Sydney-based artistic director. “I quit doing it and I regret it,” she said.

Malpass said travel insurance was rarely factored into travel plans before the pandemic, but it certainly is now.

“If I were traveling abroad, especially to the United States, the fear of not being able to go home if I had COVID, or having to pay a lot of money for border closures – I could handle it. It never occurred to me that I wouldn’t be able to get in. Now is the time,” Malpass said.

A study by insurer Cover-More found that attitudes toward travel insurance are changing among young consumers. According to survey data, 84% of Australians under the age of 30 intend to purchase travel insurance.

Todd Nelson, Managing Director of Covermore Australia, said: “Young customers are more likely to take out insurance for the first time because of the greater certainty that insurance provides against the risk that COVID-19 will impact their travel plans. is.

Nelson also noted a significant spike in travel insurance claims as international travel returns have been bumpy. “Current billings are even higher than their pre-COVID peaks,” he said.

Canstar’s financial expert Steve Mickenbecker said, “COVID risk significantly increases the likelihood and size of claims on travel insurance, which will require higher premiums.”

Mickenbecker also warned consumers not to fall for cheaper premiums as insurance premiums skyrocket.

“Some policies generally exclude claims resulting from COVID or the pandemic, which may result in lower premiums being quoted. It’s important to explore the breadth and level of coverage instead of choosing,” he said. “Very low premiums can set off alarm bells that important cover is being left out.”

Providers have also introduced policies that include special COVID overages in addition to regular overages, warned Mickenbecker. “This means that your out-of-pocket costs will increase when a COVID-19 event is billed,” he said.

Jody Byrd, an expert at Choice Travel, said travel insurance prices have increased by about 10% on average, but that could vary a lot.

“Prices can skyrocket, especially for people with pre-existing medical conditions,” Bird said.

Insurance covering a two-week trip in Europe with unlimited cancellation coverage started at around $500 for travelers in their 30s and skyrocketed to around $1000 for travelers over 70 with no pre-existing medical conditions.

Mr Mickenbecker said older Australians will find insurance especially valuable in the age of the coronavirus.

“The higher susceptibility of the elderly group to serious events such as COVID-19 infection increases the risk of intensive medical care,” Mickenbecker said. means.”

Cruises are also popular with this cohort, and because of their high risk of catching the virus, Mickenbecker said they will have an even higher premium load.

“Unfortunately, for older people, insurance premiums can become more expensive. However, comprehensive travel insurance is still a must.”