Travel Insurance Payouts Hit Record High
The travel insurance sector experienced a significant 30% increase in the total value of claims paid out to policyholders during 2023, marking a historic peak for the industry. According to Squaremouth.com, a leading travel insurance marketplace, the average payout per claim stood at $1,900.
Moreover, the average reimbursement received by travelers was six times the cost of purchasing a travel insurance policy. Squaremouth reported that nearly half of the claims paid out in 2023 were related to canceled or shortened trips.
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Among these claims, trip cancellations accounted for 25% of the total, with an average payout of approximately $5,000. Emergency medical claims followed closely, comprising 24% of the total payouts.
Claims arising from travel delays and missed connections represented nearly a quarter of the reimbursements. Although less frequent, evacuation claims emerged as the most costly, with average payouts exceeding $10,000.
A notable trend in 2023 was the rise in reimbursements under the Cancer for Any Reason (CFAR) benefit, an optional add-on to some policies. The average reimbursement for CFAR claims was reported at $2,111, with the highest payout reaching over $25,000, doubling the maximum payout recorded in 2022.
In a separate report, Squaremouth also highlighted an 11% increase in the average cost of spring travel in 2023, rising from $6,943 to $7,719 compared to the previous year.
