Travel Insurance Outlook For 2024 – Forbes Advisor

Increasing trip costs and flight delays top the list of concerns for many vacationers, and these worries are likely to continue plaguing travelers in 2024.

The average spending for 2024 trips is 110% higher than the average cost for 2023 trips, based on Forbes Advisor’s analysis of travel insurance policy sales. And nearly a quarter (23%) of all flights this year arrived at their destination later than expected, according to Department of Transportation data.

Despite spiking trip expenses and snafus at the airport, the majority of Americans who are buying travel insurance are going abroad.

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Average Spending on Trips Continues to Increase

The average summer trip cost in 2023 surpassed $9,000 for the first time, and there’s no sign of that trend cooling off for 2024. Average domestic spending on trips so far for 2024 are 82% higher compared to 2023, based on our analysis. The spending for 2024 international trips is even steeper—up 138%, on average. These trip costs are based on the non-refundable deposit amounts being insured under travel insurance policies. These costs would not include expenses that aren’t insured, like restaurant meals and shopping.

The trip costs being insured aren’t necessarily skyrocketing because people are taking more lavish vacations. Inflation, high jet fuel prices and more expensive airline tickets are contributing to the uptick in travel costs.

Major airlines such as United, JetBlue and Southwest cite high fuel costs as a concern in their third-quarter 2023 financial reports, so we should expect to see fares increase further if that lasts. For example, the average airfare for domestic trips in the second quarter of 2023 was up nearly 28% compared to the first quarter of 2020, based on Bureau of Transportation Statistics.

Pricey hotel accommodations are also on deck, which adds to trip spending. Hotel room rates in some major cities in the U.S. and around the world are expected to continue climbing in 2024, according to the Hotel Monitor 2024, a report by American Express Global Business Travel. The report forecasts changes in hotel prices in 80 cities and predicts double-digit hotel rate increases for Buenos Aires, Boston, Chicago and Paris, among other cities.

Top International Travel Destinations for 2024

Americans are eager to travel internationally in 2024: 89% of travel insurance purchases for trips taking place Jan. 1 to Dec. 31, 2024, are for trips abroad, according to Forbes Advisor data.

Mexico, Italy, the U.K., France and Japan were among the top travel destinations throughout 2023, and remain so in the coming year. Island nations and tropical hot spots-such as the Bahamas, Costa Rica and Aruba will continue to be favorites with American travelers, especially during the winter months.

A relative newcomer to the top destinations list is Antarctica, which made its debut last year. The continent continues to trend as a top 2024 excursion destination as cruise lines add more new ships and expeditions. In the 2019-2020 season, Antarctica welcomed 75,000 visitors. That number rose to 104,897 in the 2022-2023 season, according to the International Union for Conservation Nature.

Where Are Travelers Headed in 2024?

Top Travel Concerns and Types of Travel for 2024

Looking ahead, American travelers are primarily concerned about escalating trip costs and flight disruptions.

More than half of the respondents in a recent survey cited rising trips costs and fear of flight cancellations or delays as their top deciding factors to purchase travel insurance more frequently in 2024, says Carol Mueller, spokesperson for Berkshire Hathaway Travel Protection.

As the airlines continue to struggle with staffing issues and unpredictable weather, passengers have come to expect delays, cancellations and lost or delayed luggage, says Suzanne Morrow, spokesperson for InsureMyTrip.

“Flight delays and cancellations, lost, delayed or stolen luggage, becoming unexpectedly sick or injured during vacation, and of course, costs are top concerns remaining consistent for 2024,” she says.

But these concerns aren’t keeping people home. Americans plan to take to the skies and hit the road more in the coming year, says Mueller, based on findings from the Berkshire Hathaway Travel Protection 2024 State of Travel Insurance study.

“Flights and road trips are the trip types projected to grow in 2024, while vacation rentals, foodie travel and wedding travel are on the decline,” says Mueller. Adventure travel is also on the upswing.

A third (33%) of respondents in the Berkshire Hathaway study said they anticipate taking trips involving a flight more frequently in 2024 compared to 2023. A bit more (36%) said they expect to take road trips more frequently. Almost a third (30%) felt they’d do more adventure travel in 2024.

How To Get the Best Travel Insurance in 2024

Buying travel insurance can be a smart move if you don’t want to lose the hard-earned money you’ve invested in your trip if things go wrong. The best travel insurance policies can help safeguard your trip investment by packaging together valuable benefits that can compensate you for cancellations, interruptions, delays, travel medical costs and more.

• Consider travel medical insurance. A policy with travel medical insurance and medical evacuation coverage is important if you’re venturing outside of the States because you may have little to no coverage under your U.S. health plan. If you’re taking a trip within the U.S., you likely don’t need to buy travel medical insurance.
• Check a policy’s delay and missed connection benefits. Inclement weather, airplane mechanical issues or any number of other unexpected circumstances can disrupt your travel itinerary. If you’re worried about paying extra money for costs due to a delay, look for a policy that has a generous amount of travel delay insurance and missed connection benefits.
• Think about how much flexibility you want. Trip cancellation is generally included in travel insurance policies, but it only reimburses you if you cancel for a problem listed in the policy. If you want the freedom to cancel a trip no matter what and get partially reimbursed, opt for a “cancel for any reason” travel insurance upgrade. You can sometimes also buy an “interruption for any reason” upgrade that allows you to make an insurance claim if you have to cut a trip short and return home for any reason.