Insurance Firms Tighten Coverage After Surge in Tourism-Risk Events

Insurance companies operating in travel and tourism are revising policy terms and pricing as destinations worldwide face rising risk events—including extreme weather, geopolitical instability, and operational disruptions. The latest shift affects both travellers and travel-service providers.

Tours and hotels in regions prone to hurricanes, such as the Caribbean, are seeing higher premiums and stricter underwriting criteria. Some insurers are requiring proof of emergency-response plans, climate-adaptation measures, and business-continuity protocols before offering coverage.

From the traveller side, insurance premiums for destination-risk coverages (such as weather/health/evacuation) are rising, and payment providers warn that fewer inclusive policies may emerge in peak seasons if risk perceptions remain elevated. Booking behaviour is being adjusted accordingly.

Travel-industry analysts note that destinations must now factor insurance and risk-management costs into their overall value proposition. “Safe, accessible, well-prepared” is increasingly a minimum-expectation for visitors, not a bonus.

This insurance shift reinforces how travel decisions are not purely about leisure anymore—they incorporate peace of mind, flexibility, and readiness for disruptions. Travel-trade partners are adapting by offering more flexible terms and emphasising destination safety features.

While higher costs may discourage some segments, destinations that invest in risk-mitigation and transparent communication could gain competitive advantage as travellers seek reliability. The industry is evolving toward resilient tourism rather than just rapid growth.