Yonder flags soaring trip costs and disruption driving focus on insurance triggers

Travel insurers are facing renewed scrutiny over ‘hidden’ operational risks in global travel, as higher trip costs and growing logistical disruption increase potential claims exposure across cancellation, delay, and supplier failure cover.

Yonder said the average cost of a summer trip had risen by 48% year on year, significantly increasing insured values and amplifying the financial impact of trip interruption or cancellation events.

The US company pointed out that travellers were now more exposed to secondary disruptions, including airline rerouting, supplier bankruptcy risk, and supply chain-related delays, which are increasingly shaping claims patterns across the sector.

“Most travellers do not realise how tightly time-bound bankruptcy cover is,” said Terry Boynton, President of Yonder Travel Insurance. “There are two 14-day conditions that determine eligibility, and if a supplier has already announced insolvency, it is too late to purchase cover for that event.”

Yonder noted that around 80% of policies on its platform include some form of supplier financial default protection, but warned that eligibility rules could materially affect claims outcomes if not clearly understood at the point of sale.

Missed connection risk is also rising as geopolitical instability forces airlines to reroute flights around restricted airspace, increasing journey times and reducing buffer windows between connections.

The insurer said relatively short delays could now have disproportionate downstream effects, including missed cruise departures and loss of prepaid tours, particularly where onward travel is non-refundable.

Yonder highlighted the importance of “trigger time” thresholds in travel insurance policies, which determine how long a delay must last before cover is activated. Lower thresholds, such as three hours, are increasingly seen as more relevant in a disrupted operating environment compared with traditional 10–12 hour triggers.

Fuel availability and global supply chain constraints are also contributing to operational delays, with airlines prioritising aircraft recovery over passenger accommodation in extended groundings.

In response, insurers are placing greater emphasis on travel delay benefits, which provide cash compensation for accommodation and subsistence costs during disruption events.

“We are recommending higher delay benefits as a financial buffer for travellers,” Boynton added. “In many cases, passengers cannot rely on airline-issued vouchers, particularly during system-wide disruption.”

Yonder said it had analysed hundreds of US travel insurance policies to assess coverage variation across key disruption scenarios, reflecting growing consumer demand for more tailored protection in a volatile travel environment.