While the adage "The journey of a thousand miles begins with a single step" has served to inspire many to embark upon exciting journeys, shouldn't travelers who take that first step be prepared for the possible misstep that can turn an otherwise delightful journey into a nightmare?
Insurance agents who serve their clients as personal risk advisers should view the many personal risks associated with traveling as an ideal opportunity to provide their clients advice on the solutions that are available to manage the risks that can threaten the safety and assets of travelers. This article identifies the wide range of risks that can pose a serious hardship for travelers and examines a variety of solutions and resources that are available to help consumers understand, avoid, and manage those risks.
Leisure Travel—Just How Big?
The following statistics from the US Travel Association and the table below offer insights on the scale of domestic and international leisure travel.
Nearly 4 out of 5 domestic trips taken are for leisure purposes (79 percent).
US residents logged 1.7 billion person‑trips1 for leisure purposes in 2015.
Top leisure travel activities for US domestic travelers are (1) visiting relatives, (2) shopping, (3) visiting friends, (4) fine dining, and (5) beaches.
Spending by US residents on international leisure travel totaled $110 billion in 2015.
Worldwide, spending on leisure travel by all domestic and international travelers totaled $650.8 billion in 2015.
A Source: US Department of Commerce, International Trade Administration, and National Travel and Tourism Office
Understanding the Risks
While it is not a common conversation to have with clients, insurance agents should understand that a high volume of travel merits helping clients to examine the many risks they are exposed to while traveling. To be sure, understanding the many risks that can jeopardize the safety, well-being, and assets of those who travel is no small task. Following are the categories of common risks that travelers should be aware of, along with a series of questions that can be posed to help travelers better understand each risk and the importance of examining available solutions.
The trip is canceled or interrupted.
While the reasons travel may need to be canceled or interrupted can vary, the following are among them: weather, terrorism, employment, and medical.
Example: To celebrate your mother's 75th birthday, you plan a long-postponed tour of Italy. Three days before the planned departure, your mother is hospitalized, and you must cancel the trip. How can you recoup the nonrefundable costs you have incurred?
The trip is delayed/has baggage issues.
Flight delays have caused many travelers to miss connecting flights, cruise departures, and check dates, while lost or delayed delivery of baggage can create unanticipated expenses and great heartache.
Example: You arrive in Hawaii for a second honeymoon, but your luggage doesn't. What solutions can you expect to rely on to cover your immediate expenses if the luggage is merely delayed a day or two, missing for an extended period of time, or stolen?
Example: You are traveling with your family, and your connecting flight has been canceled due to severe weather, causing you to miss the departure for your cruise. How can you recoup the cost for the missed cruise or the unexpected hotel costs and arrange new flights to return home?
There is need for medical care while traveling.
Medical emergencies can arise at any time, whether due to a prior condition, sudden illness, or injury. Having access to quality medical care while traveling abroad requires prior planning.
Example: While touring Spain, you experience severe abdominal pain, suggesting you may need an appendectomy. How can you locate a physician and hospital that can provide a high level of care?
There is an emergency evacuation.
Emergency medical evacuation and repatriation may become necessary to transport a patient to an appropriate medical facility. Nonmedical evacuation may be required to transport travelers from a dangerous situation in instances of civil or political unrest or a natural disaster.
Example: You are at a beach resort in Florida, and 2 days after arriving, an offshore hurricane causes local authorities to call for an evacuation. Who can you turn to for evacuation assistance? Who will reimburse you for your lost vacation investment?
There are additional risks.
Damage or theft to a rental car. All risk advisers and travelers are aware of this risk, though some struggle with how best to address it. This IRMI article offers a number of insights on a common risk that are worth reviewing.
For example, knowing you have coverage under your credit card, you forego purchasing this coverage. After an accident, you receive a bill for the rental car company's lost income while the car was out of service. What services are available to help you know how to avoid the risk that your credit card provides deficient rental car coverage?
Recreational adventure. Extreme or hazardous activities, such as mountaineering, motorcycle riding, hang gliding, parachuting, bungee jumping, jet skiing, scuba diving, etc., can present unique safety and financial risks.
Emergency concierge services. Legal assistance, emergency message center, emergency cash transfer, emergency translations, and other crisis avoidance assistance may become necessary.
For example, while traveling internationally, your wallet and passport are stolen. Who can be relied on to provide emergency cash, replacement credit cards, and a replacement passport?
Kidnap and ransom. While all risk advisers and travelers understand this risk, it is one risk that is commonly left undiscussed. Risk advisers should broach the topic and explain that there are coverage solutions that can include the services of experts trained to respond to an event.
For example, to celebrate her senior year in college, your daughter travels on spring break to Cabo San Lucas, Mexico. Three days later, you receive a call informing you she has been kidnapped and is being held for ransom. Do you have access to experts who can assist to successfully navigate such an event?
The 6 Ps: Prior Proper Planning Prevents Poor Performance
As all risk advisers know, effectively managing risk is best accomplished when clients are educated on the steps they can take to avoid or reduce their exposure to loss. Risk advisers can best assist their clients by serving as a resource and making them aware of the sources of information that can help them greatly reduce their exposure to a wide range of travel-related risks.
The Federal Aviation Administration allows visitors to check all US airports for delays in real time. Most travelers are likely aware that updates on flight delays are available from almost all airlines.
Too many travelers learn to be ever careful of pickpockets, con artists, scammers, and thieves the hard way. The website Thiefhunters in Paradise offers visitors a bounty of insights into the many safety risks to be aware of and the steps to avoid them.
Credit Card Coverage: Maybe
Consumers should be advised to neither ignore nor rely on the coverage provided by credit card providers. As with all forms of insurance, it is important to understand protection varies widely and requires close attention to the terms and conditions of membership. Those details are available, provided the cardholder knows where to look. According to Travel Insurance Review, cardholders may have access to the following forms of protection for their travel risks.
Trip cancellation, interruption, and delays
Lost or destroyed baggage
Accidental death and dismemberment or flight accident insurance
Emergency assistance and concierge services
Cardholders should be aware that the protection that is provided is not "free," as access to these benefits is provided to those willing to pay higher annual fees. Additionally, benefits are only available to those who have charged the associated travel expenses to the card.
Real Protection: Specialty Travel Coverage
There are a surprisingly large number of insurance providers offering a wide range of specialized coverage for travelers. While the raw number is misleading, a Google keyword search for "travel insurance" produced more than 25 million results. While the type and scope of insurance protection vary, the coverage that can be accessed through some specialty carriers often provides broadened protection and increased coverage limits for those risks that can cause a significant loss. Insurance agents have the option to serve their clients as an advisory resource and intermediary by directly placing coverage or directing clients to one of the many do-it-yourself (DIY) websites for self-service. Agents who serve their clients as a personal risk adviser should consider the implications of directing their clients to a DIY model to address this risk on their own. For those who choose to ignore those implications, the following organizations can provide consumers easy and direct access to a wide variety of insurance solutions while supplementing those solutions with a good amount of helpful educational content.
While these and other DIY providers give consumers easy access to many quality coverage options, sorting through those many options can be confusing for many consumers. This confusion provides personal risk advisers the opportunity to provide much-needed guidance and better serve their clients by functioning as both an expert resource and intermediary. For risk advisers interested in assisting their clients in this greater capacity, the following are several organizations that offer agents and their clients high-quality coverage options with dedicated support to provide ongoing customer service.
Travel Guard offers access to 20 different coverage solutions, with options ranging from all-inclusive plans to rental car and flight insurance plans, all underwritten by AIG. Travel Guard features an easy-access quoting platform supported by a 24/7/365 customer service center, so agents and their clients can contact them anytime from anywhere in the world. Agencies who do not represent AIG should be aware that appointments to represent this program are made easily available.
Tokio Marine HCC—MIS Group offers international medical insurance products to protect individuals, groups, missionaries, students, corporations, and organizations during their international activities in over 130 countries around the world. This insurer also makes it easy for agencies to represent them, supports agencies by providing customized links to their online quoting and application system, provides customized brochures, has no minimum production requirements, has 24/7/365 worldwide customer service, and provides access to experienced account executives to assist with product training. The websites for both providers offer a remarkable amount of helpful information to help agents and consumers select the coverage solutions that best meet their needs.
Clients with personal insurance coverage placed through Chubb have the ability to purchase Passport 360, a robust travel accident program that provides many forms of protection into one package. With two plan levels, essential or enhanced, Passport 360 features evacuation for travelers if there is a medical emergency or security threat while traveling. Coverage can be enhanced with optional upgrades such as a golf package or a trip cancellation/trip interruption and event ticket cancellation coverage.
Risk advisers should understand many of their clients travel with a very limited understanding of the wide range of risks they face. Opening a conversation with clients about those risks offers agents an ideal opportunity to demonstrate the greater value they can provide as a personal risk adviser. As we have seen, there are numerous sources of educational content and online resources to help consumers reduce their exposure to many travel risks. After demonstrating an understanding of these risks and a command of the many resources available to help manage them, agents who take the final step to assist their clients in securing well-tailored coverage solutions will solidify their role as a personal risk adviser.
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1 A person-trip is defined as one person on a trip away from home overnight in paid accommodations or on a day or overnight trip to places 50 miles or more (one way) away from home.