How much do 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 says 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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