Category: Travel Insurance Trivia

Travel insurance changes to match our travel habits

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By , September 1, 2011 10:36 am
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Our travel insurance timeline illustrates how our holiday habits have changed and how travel insurance has adapted in response.

travel insurance and holiday timeline

Our holiday timeline illustrates key events in the changing face of the UK holiday and travel insurance market.

The holidays we take have certainly changed since the young men of the British Nobility took their Grand Tour of Europe in the 1700s and 1800s.

Thomas Cook was the first pioneer to open up travel to a wider audience in the 19th century. He offered his first package tour in 1841, it was a return day trip between Leicester and Loughborough, taking advantage of the railways which were spreading across Britain at the time. Thomas Cook’s first package tour to Europe took place in 1855.
The next big event in the travel industry was in the 1950’s when the Horizon Group pioneered the first mass package holidays from Gatwick.

As our travel habits have changed, the travel insurance we need to protect ourselves when we go on holiday as changed along with. The travel insurance cover itself has changed along with the way we buy it.

See our travel insurance timeline for an illustration of key events in the changing face of the UK holiday and travel insurance market.

The first travel insurance policy was sold in 1864 in the USA by the Travellers Insurance Company; there have been some big changes since then.

Until the mid-20th Century, travel insurance was seen as an addition to Personal Accident Cover and the majority was sold by Lloyds of London. Very few standalone travel insurance policies were sold.

The advent of the package holiday in the 1950s and rapid expansion of the travel industry generated a sharp rise in travel insurance sales. By the 1960s the majority of travel insurance was sold by Tour Operators, alongside the purchase of a package holiday.

In 1960 travel insurance cover for 2 weeks in Europe cost about £1.

In 1978, as a response to Air Traffic Controller strikes the previous year, travel insurers introduced the first travel insurance cover for industrial action, it was designed to cover delays due to strike at airports.

As a result of the huge growth in travel to the USA, where medical costs are significantly higher than in Europe, medical expenses cover on many travel insurance policies increased from £500 to £50,000.

By the mid-80s the majority of travel insurance policies were sold through travel agents.
Typical cost of travel insurance from a travel agent in the late 1990s for 1 adult 1 week in Europe is £20.

We then jump to the 21st Century for some significant changes to travel insurance, which were driven by the internet and increased independent travel. By the early 2000’s Annual Travel Insurance has grown in popularity as holiday makers start to take more than one holiday a year. This is driven by the launch of low cost airlines and the rise of online booking.

In 2005 the Financial Services Authority starts to regulate travel insurance intermediaries. Travel insurance sold alongside a holiday is exempt from FSA regulation and ABTA introduces an insurance exam to ensure travel agents are selling travel insurance correctly.

In 2006 Scheduled Airline Failure cover is introduced to provide extra cover for the increasing number of holiday makers booking holidays independently, rather than through a bonded tour operator or travel agent. It provides travel insurance protection to cover the insolvency of a holiday supplier, such as an airline or hotel.

Sales of travel insurance, direct from a new breed of online provider, grows alongside sales of independent holidays.

Typical cost of travel insurance for 1 week in Europe is £10

By 2007 price comparison sites such as moneysupermarket.com are starting to dominate the travel insurance market with travel insurance for 1 week in Europe costing as little as £5.

As a result of the Volcanic Ash Crisis in April 2010, which caused the closure of most of UK air space for nearly a week, travel insurers introduce Natural Catastrophe Cover. Natural Catastrophe cover is designed to cover cancelation and delay due to natural disasters, such as volcanic eruptions, earthquakes and floods.

Things have certainly changed since Thomas Cook’s day, see our travel insurance timeline and holiday timeline for a great graphical illustration of the key events in the history of travel insurance and package holidays.

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