The earliest records of insurance dates back to the 3rd century BC, and it was probably started by the Babylonians and Chinese traders. Life insurance started long ago too, during the time of the Greeks in 3rd century AD. Comparatively, travel insurance is a new type of insurance, and it is defined as a kind of insurance covering financial, medical, and other related losses incurred during travel. Travel insurance policy generally covers these losses for travel to a domestic location or foreign country.
The first modern day travel insurance company was called the Travelers Insurance Company, and it was launched on the 1st of April, 1864. The company was founded by James Batterson and the clients of the company were the first travelers to get insured “for the purpose of insuring travelers against loss of life or personal injury while journeying by railway or steamboat.” Now, about 150 years after the company opened its doors, travel insurance has become a huge industry, comprising of millions of insurance policy holders and premiums crossing $1 billion.
The insurance used by the Chinese and Babylonian traders about two millennia ago could be regarded as the first ever travel insurance. The Chinese traders used to reallocate their commodities across many boats, before crossing a treacherous stretch of water. If one of the boats capsized, it could greatly reduce the quantity of commodities. On the other hand, the Babylonians had a kind of insurance very similar to modern travel insurance. To fund their shipments, merchants usually took loans from moneylenders. Interestingly, the merchants would sometimes pay extra money to the lender, so the lender would not ask for a repayment of his loan if the shipment was lost or stolen. There is also a mention of this insurance system in the Code of Hammurabi.
The travel insurance industry throughout the world, particularly the US, was growing steadily since the early 20th century, but the growth was rather slow compared to other types of insurance. The turning point in the history of travel insurance policy was the 9/11 incident. It was after this horrendous event that the sale of travel insurance began to shoot up throughout the US and the world. Prior to the World Trade Center (WTC) attacks, about 10% of Americans had travel insurance, but after the incident, the percentage increased to 30% in a span of just a couple years.
Travel insurance companies of today offer different types of insurance policies for different people. Some popular travel insurance policies provide coverage for business travel, student travel, leisure travel, and international travel. Trip cancellation, accidental death, overseas funeral expenses, medical expenses, theft of personal possessions, curtailment and legal assistance are some of the typical risks covered by travel insurance policies.
Many travelers are aware of the advantages of purchasing travel insurance. The number of global travelers is ever on the increase, and the risks of travel are on the increase as well. That is why more travelers are purchasing travel insurance. As a result, the travel insurance industry is expanding at an exponential rate.