Travel insurance payouts hit record high in 2023
Travel insurance payouts hit record high in 2023 | Insurance Business America
Travel
Travel insurance payouts hit record high in 2023
How much did insurers pay on average?
Travel
By
Mika Pangilinan
The travel insurance sector saw a 30% uptick in the total value of claims paid out to policyholders in 2023.
Travel insurance marketplace Squaremouth.com said this is a historic peak, with payouts averaging at $1,900 per claim.
Additionally, the amount reimbursed to travelers on average was six times the cost of purchasing a travel insurance policy.
Nearly half of the claims paid in 2023 were for trips that had been canceled or cut short, according to Squaremouth.
Trip cancellation claims alone constituted 25% of all claims, with an average payout of around $5,000. Following closely were emergency medical claims, which accounted for 24% of the total.
Claims related to travel delays and missed connections made up nearly another quarter of the reimbursements.
Claim Type by Benefit
% of Claims
Highest Claim
Avg. Claim
Trip Cancellation
25%
$49,427.92
$4,854.22
Emergency Medical
24%
$48,380.33
$1,456.24
Travel Delay
14%
$3,398.75
$473.71
Trip Interruption
13%
$58,607.58
$2,782.68
Missed Connection
9%
$2,168.26
$471.69
Cancel For Any Reason
6%
$25,620.00
$2,111.13
Baggage Loss
5%
$1,439.88
$208.18
Baggage Delay
4%
$649.88
$207.51
Medical Evacuation
<1%
$27,592.34
$10,838.83
Evacuation claims, although less frequent, emerged as the costliest, with average payouts surpassing $10,000.
Another key trend in 2023 was the increase in reimbursements under the Cancer for Any Reason (CFAR) benefit, which is an optional add-on to some policies.
The average reimbursement for CFAR claims was reported at $2,111. The highest payout reached over $25,000, which is double the maximum payout recorded in 2022.
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