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

$2,168.26

$471.69

Cancel For Any Reason

$25,620.00

$2,111.13

Baggage Loss

$1,439.88

$208.18

Baggage Delay

$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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