Credit: iana_kolesnikova/Adobe Stock
Rising travel costs led to an increase in paid claims and payout amounts in 2024, according to a recent report by SquareMouth.
More consumers turned to travel insurance last year, the data showed, leading to the 18% jump in paid claims from 2023 and a spike in payout amounts, which grew from an average of $1,900 to $2,609.
Cancelled trips accounted for 27% of the claims, followed by medical emergencies at 24%, travel delays and missed connections at 21%.
Other key takeaways…
Emergency medical claims surpass trip cancellation for first time in over a decade. Emergency medical became the single highest-paid and most frequently claimed benefit, accounting for 27% of all paid claims in 2024. Average payouts for emergency medical claims increased 14%, rising from $1,456 to $1,654.Cancellation-related claims account for majority of paid claims. Over 40% of paid claims in 2024 stemmed from trips that were either canceled or cut short. This includes claims within the trip cancellation, trip interruption and cancel for any reason benefits.
Travel delays continued to cause headaches. Despite the DOT’s 2024 pledge to support travelers affected by flight delays and cancellations, travelers still relied heavily on travel insurance to make travel delays less expensive and more comfortable. Paid claims for travel delays increased 15% in 2024, with average payouts increasing 8% compared to 2023.
Meanwhile, travel costs are expected to rise again in 2025, SquareMouth reports: “The average trip cost for Americans in 2024 was $5,861, up 25% from 2023 and 39% from 2022.”
The global travel insurance market peaked at $27.05 billion in 2024, and is now expected to grow at a compound annual growth rate of 15.4% from 2025 to 2030.
The data showed growing popularity of travel and tourism, dedicated insurance coverage for unforeseen events like flight delays, loss of luggage and cancellation of trips helped boost the sector.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.