Insurance providers are bracing for a surge in claims surpassing those witnessed during the COVID-19 pandemic, driven by property damage and travel disruptions caused by Typhoon Gaemi, according to data from the Civil Aviation Administration (CAA).
The typhoon, which struck last Wednesday and Thursday, led to the cancellation or delay of nearly 400 international flights, impacting around 60,000 insured passengers. The total compensation eligible for these disruptions is estimated to exceed NT$1 billion (US$30.46 million), the CAA reported.
A shift in consumer behavior has been noted since the pandemic, with many Taiwanese now purchasing travel insurance, which was less common in the past. A source, speaking on condition of anonymity, revealed that the trend of buying travel insurance, including plans for health and weather-related inconveniences, has sharply increased.
The source explained that these insurance plans have become some of the most popular products in the property and casualty insurance sector due to their affordability.
Data indicates that over 2 million travel insurance policies were purchased online in the first half of this year, a significant rise from 1.23 million in the same period last year. Premiums for travel insurance have also increased, reaching NT$621 million compared to NT$380 million the previous year.
Online purchases now constitute over half of all travel insurance transactions, with major players such as Fubon Insurance, Tokio Marine Holdings, and Cathay Century Insurance Co dominating the market, collectively holding a 65 percent share.
Common travel-related claims include trip cancellations, flight delays, baggage issues, and lost travel documents. Flight delay claims have the most lenient eligibility criteria, with compensation provided if a flight is delayed by more than four hours, given proper documentation from the airline.
Insurance companies have indicated they will process claims for flight cancellations or changes due to Typhoon Gaemi, provided passengers have purchased travel inconvenience insurance. Notably, the complimentary insurance offered with credit card purchases does not cover such claims, as it typically applies only to flights from foreign airports.
Despite the anticipated high payout for claims related to Typhoon Gaemi, insurers believe the industry can manage these costs due to the generally low loss rate associated with such insurance.
The source highlighted the growing interest in inconvenience insurance, which helps mitigate losses from unforeseen events. However, they cautioned that this insurance can only be purchased after a regular travel insurance plan and is not valid if bought after a typhoon warning has been issued.
Insurers recommend purchasing travel insurance promptly after finalizing travel plans to ensure coverage.
