Spending your hard-earned money on a holiday? Lovely. You deserve it. It will be the perfect opportunity to relax/unwind/have fun (delete as appropriate!). Spending your hard-earned money on travel insurance? No way! What a waste! What an unnecessary expense! It’s this rhetoric that has frustrated travel insurers since the dawn of time. The dichotomy of being willing to fork out on a holiday (extravagant or not) but being completely unwilling to spend money on comprehensive travel insurance. 

Where exactly does this customer mindset come from and why does it persist? Some 2023 research in the UK found that 25% of people thought they didn’t need travel insurance. Others (16%) simply forgot to buy it, while 17% thought it wasn’t necessary. There was also resistance around cost, which has been further exacerbated by the cost of living crisis, with 26% saying it’s too expensive.

Policies today are written for regulators, sold for conversion, and only later tested in real life

For many travellers, the Covid-19 pandemic was a bit of a rude awakening. Suddenly the true value of travel insurance became abundantly clear – although trust was broken for some customers who had purchased insurance but, due to the pandemic being an ‘unforeseen event’, found that certain coverage didn’t apply.

Do they know and just not care?

The strange thing is that 70% of UK travellers think going abroad without insurance is risky and yet more than one-third do it anyway. This hints at more of an attitude gap than an awareness gap. 

The Safer Tourism Foundation has conducted several rounds of consumer research on this topic and found that the main reason people don’t buy travel insurance is because they don’t think they’ll need it. This is optimism bias: despite knowing the risks, they simply don’t believe it will happen to them (an appropriate attitude to have towards the lottery but not to the inherent risks of travel).

There is work to be done around customer education and behavioural change, but who is responsible for this mammoth task?

Shifting roles, shifting responsibility

Emma Curtis, Lead Ombudsman, Insurance, of the Australian Financial Complaints Authority (AFCA), which received more than 100,000 complaints in 2024/25, underlined that this needed to be a collaborative effort. “It’s a shared responsibility for insurers and distributors. All businesses in the value chain, as well as consumers, have a lot to gain when it succeeds. Regulation plays a part, and there is also a shared goal in lifting customer understanding and removing barriers to understand how the purchased insurance product will work in practice. Consumers also have a role in ensuring the product they select is suited to their needs,” she stated.

The move to digital distribution has transformed the role of travel agents from in-person advisers into online service providers. Greg Lawson, Head of Travel Insurance at Collinson, said: “We’ve come a long way from the days when the only question asked by a travel agent was whether a customer wanted travel insurance. But, in its own way, the travel insurance industry has since created greater complexity in both products and distribution. In recent years, we have spent much time discussing how to drive customer engagement, yet many distributors and channels still promote the quick online purchase of a complex product, and online sales continue to grow market share.” 

This digital shift has been a double-edged sword, with travel insurance arguably more accessible than ever before, while the simplicity of online purchasing can mask the complexity of the product itself.

Aggregators and comparison sites are dominating channels and are incentivised to compete on price, not education. However, Andy Wright, Ombudsman Director at the UK’s Financial Ombudsman Service, doesn’t believe this is the root of the problem: “While we do see some complaints about aggregators, the large majority of travel insurance cases we see involve insurers and brokers,” he explained.

Customers are confused

Wright sees the same misunderstandings cropping up time and time again. “We see situations where insurance has been bought for the wrong geographical area – often mistakes about what countries ‘European’ cover includes; where insurance has been purchased for the wrong trip duration, and where cruise cover hasn’t been added when the holiday involves a cruise,” he explained. “These issues can sometimes arise as a result of confusing or unclear sales processes, but are often a result of consumers not taking care to check the level of cover they are buying."

We stick to two golden rules: no font smaller than 12pt, and no sentence longer than a tweet

Federico Tarling, Chief Service Officer at Assist Card, agreed that many customers did not fully understand how insurance worked in practice. “Many assume coverage is automatic or unlimited, without realising the importance of timing, process or conditions such as contacting our alarm centres first, pre‑existing conditions or when symptoms actually begin,” he highlighted. “Our assistance teams experience these gaps live: travellers calling after arranging care on their own, expecting retroactive cashless coverage or discovering limitations only once they need help most.”

Lupe Zepeda, Vice President of Customer Service at Trawick International, pointed to the claims process itself as a huge source of misunderstanding and frustration. “Some customers do not understand that when a loss occurs, there is a claim process that needs to be followed,” she highlighted. “Reimbursements are not automatic and losses need to be substantiated. Claim forms need to be completed, along with supporting documentation, and, after their initial submission, the claims team may need more information. For a customer who bought a policy in five minutes on their phone the night before departure, the reality of what making a claim actually involves can feel like a betrayal.”

A 2024 Which? survey found that around one in six people who had made a travel insurance claim in the previous two years had had their claim rejected outright or received only a partial payout. The most common reason for rejection was policy exclusions. There were also frustrations around slow claims handling and poor communication.

The cost of not knowing

Naturally, the greater the misunderstanding or misconception about travel insurance, the bigger the headache, for both customers and insurers. When understanding is there, the process is altogether simpler and smoother for all parties. “Customers who understand how and when to engage with assistance, particularly the importance of contacting us early, tend to generate claims that are lower in cost, simpler to manage, and faster to resolve,” Tarling confirmed.

A simpler process should, in theory, begin with a simple policy design. Curtis said: “It should be designed and sold with the needs of the customer at the centre. This can reduce complexity and improve customer understanding,” she underlined. “Consumer testing and behaviourally informed design and communication can help improve outcomes, both for customers and for insurers, by improving customer satisfaction and brand value and reducing the risk of complaints.”

Curtis also stressed the importance of communication during claims handling, particularly around time frames and updates. “Insurers can help reduce the chance of a complaint being lodged with AFCA that is solely about claim delays or poor communication by focusing on effective communication,” she stated.

Tarling believes denied claims can even become educational opportunities, as long as empathy prevails. “Policies limit or exclude expenses, but they do not limit the amount of help we can provide in any situation,” he said. “So even if we have to deny coverage and educate clients on the scope of their policies, we do that after we’ve done our utmost effort to help the client and make them feel that we care. Once that is achieved, we take the opportunity to educate customers so that they are better prepared in the future.”
 

Let’s keep it simple

Insurers increasingly recognise the need for simplicity in both product design and communication. “Our goal is to make coverage intuitive and usable under pressure, because the true value of insurance is not what it promises on paper, but how clearly it works when customers need it most,” Tarling explained.

Tim Riley, Managing Director of True Traveller, said clarity was central to the company’s philosophy. “At our core, we try to keep things simple. We treat every customer like family and ask ourselves: ‘If this were my mum, would that feel fair?’,” he stated. “And when it comes to communication, we stick to two golden rules: no font smaller than 12pt, and no sentence longer than a tweet.”

Lawson believes in the power of visual cues to enhance understanding. “Where clients have the capability, we encourage the use of video guides and AI-driven FAQ services. Not only do we believe that visual cues work well with how modern travellers want to interact, we also believe that they are excellent educational tools given they have both visual and audio triggers to guide customers to match products to their own needs,” he explained.

Rub it out and start again

Many industry leaders believe long-standing problems with policy design and distribution need deeper structural attention. “If I could redesign the entire chain, I would start by reversing the logic,” Tarling stated. “Policies today are written for regulators, sold for conversion, and only later tested in real life. I would design them starting from the moment a customer actually needs help. I would radically simplify how policies are written, moving away from dense legal documents toward colloquial language explanations that clearly distinguish what is covered, what requires action from the customer, and what is not covered, without ambiguity. I would change how policies are sold, with more consultative and expectation‑driven sales. I would also redesign how coverage is explained at the moment of need. Education shouldn’t stop at purchase; it should be embedded into the assistance journey through real‑time guidance, prompts, and human explanation when stress is highest.”

Customers rarely see a consistent wording for what they consider a standard process

Zepeda said the solution could be to create an abbreviated, customer-centric document that made it easy to understand the different coverage types and when they might apply. “To ensure it is compliant, such a document would need to be created in collaboration with underwriters,” she explained.

Lawson believes responsibility across the distribution chain remains difficult to coordinate. “Ultimately, the entire distribution chain shares the responsibility to sell the right product to a customer in a way that they understand,” he said. “But there can be multiple regulated entities in a chain and each has their own vulnerable customer, data protection or privacy policy, and alignment with everyone each works with is impossible. That creates a fair amount of compromise in the partnership negotiations and means that customers rarely see a consistent wording for what they consider a standard process.”

A persistent problem with a path forward

Despite regulatory intervention, and improved customer journeys, the fundamental challenge remains: “There remains an inability to convince a customer of the need to read before they buy,” Lawson underlined.

The clearest path forward lies in simplicity: clearer language, more transparent claims processes, and greater standardisation of policy wording and documentation. Regulators could play a role by encouraging standardised one-page summaries of key exclusions and conditions before purchase.

Curtis believes there’s room for improvement throughout the entire policy life cycle. “Improvements to policy design and drafting can help improve consumer understanding of policy coverage and exclusions, which can then help to reduce the risk of complaints down the track,” she underlined.

Lawson also sees significant opportunities for standardisation, although theory and practice are two different things. “I think elements of the customer journey that do not drive conversion or reflect the affinity brand could be made more standardised and consistent, with one responsible entity or even at industry level, so that customers build awareness through familiarity. But maybe that’s just too utopian!”

Taking accountability

There are already signs that when customers engage more deliberately with their choices, behaviour improves. Battleface data from 2025 shows travellers moving away from default comprehensive packages towards more selective, targeted coverage, suggesting that customer education, when it works, genuinely shifts behaviour.

Tarling’s vision is clear: “I’d move the industry from contract‑centric insurance to experience‑centric protection, where clarity, guidance, and usability matter as much as coverage itself.”

Ultimately, travel insurance should deliver on what it promises: peace of mind, not headaches. But accountability cannot sit solely with insurers. Regulators, distributors, and the platforms through which policies are sold all have a part to play. The research is clear about the scale of the problem and the solutions are well within reach, providing there’s a collective will to act on them.