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JetSet Protect
Data Study

Travel Insurance Trends 2024-2025 - What's Changing for American Travelers

Analysis of emerging trends in travel insurance, including COVID coverage evolution, new exclusions, pricing changes, and what to expect in 2025.

1/15/20258 min readData

Key trends shaping 2025 travel insurance

  1. COVID-19 coverage normalization
  2. Cancel For Any Reason demand surge
  3. Adventure sports coverage expansion
  4. Digital nomad policies mainstream
  5. Climate-related exclusions increase
  6. Technology integration (apps, AI claims)
  7. Regulatory changes and consumer protection

COVID-19 coverage evolution (2020-2025)

2020: Pandemic exclusions

  • Most policies excluded pandemic-related claims
  • "Known event" clauses invoked
  • Mass cancellations with zero reimbursement
  • Industry crisis: $10+ billion in disputed claims

2021: Gradual inclusion

  • Some insurers added COVID coverage
  • Higher premiums (+15-25%)
  • Strict requirements (testing, quarantine documentation)
  • CFAR became essential

2022-2023: Standard coverage

  • COVID-19 treated like any illness
  • Medical coverage: ✅ Yes (if you test positive)
  • Trip cancellation: ✅ Yes (if you test positive before departure)
  • Border closures: ❌ No (unless specific policy rider)
  • Fear of COVID: ❌ No (need CFAR)

2024-2025: Fully normalized

  • No premium surcharge for COVID coverage
  • Covered like flu or any other illness
  • Testing requirements relaxed (follow destination rules)
  • Quarantine costs: Some policies now cover hotel costs during mandatory quarantine

Remaining gaps:

  • Government-mandated border closures (not covered without CFAR)
  • Cruise reroutes due to COVID outbreaks (not cancellation)
  • General pandemic anxiety (need CFAR)

Cancel For Any Reason (CFAR) demand explosion

2019 CFAR adoption: 12% of policies

2024 CFAR adoption: 38% of policies

Why the surge:

  • COVID taught travelers to value flexibility
  • Increased trip costs (post-pandemic inflation)
  • Remote work enables spontaneous changes
  • Climate anxiety (hurricanes, wildfires)
  • Political instability concerns

CFAR pricing trends:

  • 2020: +35% premium
  • 2024: +42% premium (settled at new normal)
  • 2025 projected: +40-45%

New CFAR variations:

  • 80-85% reimbursement plans (premium tier, +60% cost)
  • "Cancel For Work Reasons" (subset of CFAR, +20% cost)
  • "Cancel For Medical Concerns" (covers vaccine reactions, doctor-advised cancellations, +25%)

Adventure sports coverage expansion

2020 coverage: ~50 activities typical 2025 coverage: 200+ activities common

Newly covered activities (2024-2025):

  • E-bikes and e-scooters (previously excluded)
  • Stand-up paddleboarding (now mainstream)
  • Via ferrata climbing (growing in Europe)
  • Canyon swinging (New Zealand)
  • Hot air ballooning (previously risky category)

Still excluded without special rider:

  • Heli-skiing
  • BASE jumping
  • Cave diving (beyond recreational limits)
  • Professional/competitive sports
  • Motorized sports over 200cc (motorcycles)

Provider leaders in adventure coverage:

  1. World Nomads: 200+ activities included
  2. Battleface: Extreme sports specialist
  3. IMG: Optional riders for most activities

Digital nomad insurance goes mainstream

2020: Niche market, 3-4 specialized providers 2025: Every major insurer offers nomad-friendly options

Key features now standard:

  • ✅ Coverage while working remotely (previously excluded "business travel")
  • ✅ Extend/renew while already traveling
  • ✅ Multi-country continuous coverage
  • ✅ Flexible trip durations (30-364 days)
  • ✅ Home country coverage (limited, 30-90 days per year)

New nomad-specific products:

  • SafetyWing Nomad Insurance: $42-$56/month subscription
  • World Nomads Standard: Unlimited trip extensions
  • IMG Global Medical: 12-36 month policies
  • GeoBlue Xplorer: 30-364 days, no age limit

Coverage gaps being addressed:

  • Equipment insurance (laptops, cameras) - now available as add-on
  • Coworking space medical incidents - newly covered
  • Multi-country trip interruption - improved in 2024

Climate-related exclusions on the rise

New/expanded exclusions (2024-2025):

Wildfire smoke exclusions:

  • 2020: Covered if you cancel due to air quality
  • 2024: Many policies now exclude "air quality concerns" unless evacuation order
  • Impact: Canadian wildfire smoke affecting U.S. trips in 2023 led to many denied claims

"Known storm" definitions tightening:

  • Previously: Hurricanes excluded once "named"
  • Now: Some insurers exclude once tropical depression forms
  • Impact: Harder to buy coverage during active hurricane season

Climate-driven destination exclusions:

  • Increasing flood zones marked as "high risk" (requires rider)
  • Wildfire-prone areas (California, Australia) surcharges

Recommended strategy:

  • Buy insurance early in the year (before storm season)
  • Add CFAR for climate-vulnerable destinations
  • Check specific exclusions for wildfire/flood zones

Technology transformation

Mobile apps becoming standard

2020: Only Allianz had decent app 2025: All major insurers offer apps

Features now standard:

  • Digital insurance cards
  • Real-time claim tracking
  • Upload photos/receipts directly
  • 24/7 chat support
  • Emergency assistance geolocation

Leaders:

  1. Allianz: Best-in-class app, 4.7/5 rating
  2. GeoBlue: Medical-focused app with telehealth
  3. Travel Guard: Comprehensive features, 4.2/5 rating

AI-powered claims processing

Impact: Claims that took 30 days now processed in 15 days

How it works:

  • Document scanning and verification
  • Automated eligibility checking
  • Fraud detection
  • Simple claims approved without human review

Concerns:

  • Over-reliance on AI may increase denials
  • Less human judgment in edge cases
  • Privacy concerns with data collection

Blockchain for claim verification (emerging)

Pilot programs (2024-2025):

  • Allianz testing blockchain for receipt verification
  • IMG exploring smart contracts for automatic payouts
  • Expected mainstream adoption: 2026-2027

Pricing trends (2020-2025)

Average premium changes:

| Year | Avg % of trip cost | Change from prior year | |------|-------------------|------------------------| | 2020 | 4.9% | Baseline | | 2021 | 5.3% | +8% (COVID uncertainty) | | 2022 | 6.0% | +13% (COVID claims paid out) | | 2023 | 6.3% | +5% (continued adjustment) | | 2024 | 6.5% | +3% (inflation) | | 2025 (proj) | 6.7% | +3% (stable) |

Cumulative increase 2020-2025: +37%

Why premiums rose:

  1. COVID claims (2020-2022): $12+ billion industry-wide
  2. Medical cost inflation: +8% annually
  3. Increased claim frequency: +15% vs pre-pandemic
  4. Medical evacuation costs: +22% (fuel, staffing)
  5. Hurricane claims (2021-2023): $3+ billion

2025 pricing predictions:

  • Modest increases: +2-4% (stabilizing)
  • CFAR premiums: Stable at +40-45%
  • Senior premiums: Continuing to rise faster (+6-8%)
  • Annual plans: Best value (break-even dropping to 3 trips/year)

Regulatory changes impacting travelers

New consumer protections (2024-2025):

1. Clearer disclosure requirements (New York, California)

  • Plain language summaries mandatory
  • Exclusions must be highlighted
  • Pre-existing condition waivers explained upfront

2. "Free look" period extensions

  • 10-day review period (up from 7 days) in some states
  • Full refund if you cancel within review period
  • Applies to all policies over $500

3. Faster claim processing mandates

  • Some states now require acknowledgment within 15 days
  • Final decision within 45 days (down from 60-90)
  • Penalties for insurers who delay unreasonably

4. COVID-specific protections

  • Cannot exclude COVID without clear disclosure
  • "Pandemic exclusions" must be explicit
  • Some states banned blanket pandemic exclusions

Emerging coverage types

1. Remote work interruption insurance

What it covers: If you must return home mid-trip due to work emergency Who needs it: Digital nomads, remote workers Cost: +$30-$50 to base policy

2. Pet travel insurance

What it covers: Vet bills abroad, pet evacuation, quarantine costs Adoption: Growing 25% year-over-year Providers: Offered by 12+ insurers in 2025 (vs 3 in 2020)

3. Equipment insurance for creators

What it covers: Cameras, laptops, drones up to $10,000 Driven by: Influencer/creator travel boom Providers: Worth Ave Group, Lemonade, standalone policies

4. Vaccination requirement coverage

What it covers: If destination suddenly requires vaccine you don't have Relevance: Declining post-COVID, but still available Cost: +$15-$25

5. Identity theft while traveling

What it covers: Resolution services, lost document replacement Included in: Most comprehensive policies as of 2024

What's NOT changing (thankfully)

Still excluded on most policies:

  • ❌ Pre-existing conditions (without waiver)
  • ❌ Alcohol/drug-related injuries
  • ❌ Illegal activities
  • ❌ War zones (State Dept Level 4)
  • ❌ Intentional self-harm
  • ❌ Financial circumstances
  • ❌ Change of mind (without CFAR)

Still required for pre-existing waiver:

  • ✓ Purchase within 14-21 days of first trip payment
  • ✓ Insure 100% of trip cost
  • ✓ Be medically able to travel

2025 predictions

What we'll see more of:

  1. Subscription-based annual plans (monthly payments vs lump sum)
  2. Pay-per-day coverage (for nomads, charge only for days abroad)
  3. Parametric insurance (automatic payouts for delays, no claims process)
  4. Telemedicine integration (video doctor visits before deciding on evacuation)
  5. Carbon offset options (eco-friendly policy add-ons)

What's declining:

  1. Paper policies (everything digital by 2026)
  2. Phone-only claims (apps taking over)
  3. Cruise line insurance (travelers learning it's inadequate)
  4. Budget insurers (consolidation favoring established brands)

Pricing forecast:

  • 2025: +3% average increase
  • 2026: +2-4% (depends on claim frequency)
  • 2027: +2-3% (stabilizing long-term)

Wildcard: Major pandemic, global conflict, or climate disaster could spike premiums 15-25%

Actionable insights for 2025 travelers

Do this NOW:

  1. Buy CFAR if traveling hurricane season (June-November Caribbean)
  2. Check COVID coverage (should be standard, but verify)
  3. Verify adventure activities (e-bikes, paddleboarding now often covered)
  4. Consider annual plan (break-even at 3+ trips, down from 4 in 2020)
  5. Download insurer's app (before you travel, not during emergency)

Watch for these changes:

  1. New exclusions for climate events (wildfires, floods)
  2. Stricter "known event" definitions (storms, political unrest)
  3. Higher evacuation limits becoming standard ($500k vs $250k)
  4. More medical-only options (separating trip protection from health coverage)

Avoid these outdated assumptions:

❌ "COVID isn't covered" (it is now, like any illness) ❌ "I don't need CFAR" (flexibility more valuable post-pandemic) ❌ "Annual plans are for business travelers only" (now mainstream for 3+ trips/year) ❌ "Adventure sports require special insurance" (many now included in standard plans)

Bottom line

Travel insurance in 2025:

  • More expensive than 2020 (+37%), but stabilizing
  • More comprehensive (COVID, adventure sports, nomad coverage)
  • More convenient (apps, AI, faster claims)
  • More flexible (CFAR mainstream, extend-while-traveling common)

Best strategy: Buy early, add CFAR for expensive trips, choose established insurers with good apps and claims reputation.

Next steps

The industry is evolving faster than ever—stay informed to get the best coverage for your 2025 travels.