International Travel and Insurance Purchase: the Role of Traveling Companion, Household Income, Travel Risk, and Sufficient Financial Resources on this Relationship

Abstract

The COVID-19 pandemic had and continues to have profound effects on the travel industry, creating many risks and unknowns, especially for international travel. Using consumer risk theory and protection motivation theory as a framework, this study explores the relationships between international travel plans in 2023 and 2024–2025 and the likelihood of purchasing travel insurance (i. e., cancellation/interruption, emergency medical, baggage) with a sample of 1,264 US residents. Travel companion(s) and household income are examined as potential moderators and travel risk and sufficient household income as mediators. Results reveal a likelihood to purchase all three travel insurance types, and travelers are twice as likely to buy insurance for international travel for 2024–2025 compared to 2023. Likelihood to purchase travel insurance is also influenced by travel risk and having sufficient financial resources where sufficient financial resources partially mediates the relationships in question. Results suggest a new era of travel where risk is inherent and if travelers have sufficient financial resources, they will purchase travel insurance to mitigate risks of potentially suffering financial losses. This is a new finding with implications for the travel insurance industry, which should find ways to partner with travel providers, such as wholesalers and group tours, to offer insurance to international travelers. Although COVID-19 has been downgraded, other diseases are surfacing (e. g., monkeypox), leaving public health an important consideration. This and subsequent research will remain important to monitor how other outbreaks and risks impact the travel industry and travelers' methods to protect themselves.