More people buying travel insurance during government shutdown

  more-people-buying-travel-insurance-during-government-shutdown.html
  Travel and Leisure on Wed, Nov 05th, 2025 by KSTP-TV

Why the shutdown matters to travelers

When the federal government shuts down, non‑essential federal agencies shut down, and federal employees go unpaid. However, certain critical agencies—such as the Federal Aviation Administration (FAA) and the Transportation Security Administration (TSA)—may face staffing shortages if they are not fully funded. A pause in TSA operations, for instance, can delay security screening, which in turn can delay flights or even cause cancellations. The FAA’s ability to oversee air traffic control and perform maintenance on the national airspace infrastructure can also be compromised. All of these factors contribute to a higher likelihood that flights will be disrupted.

The article underscores that these disruptions can affect passengers in a variety of ways, including delayed departures, canceled flights, and increased wait times at airports. For travelers who have already booked non‑refundable tickets, paid for hotel reservations, or scheduled tours, such disruptions can quickly translate into significant financial losses. The increased risk of disruption during a shutdown has convinced many travelers that the extra cost of a travel insurance policy is a worthwhile investment.

How much are travelers paying?

The KSTP story cites data from the Travel Insurance Association (TIA), which shows that the average cost of a travel insurance policy for a $10,000 trip is about $50. In recent months, however, insurers have adjusted pricing to reflect the heightened risk of a shutdown. Some providers now charge a 10–15% premium surcharge for trips booked during a shutdown. Others have rolled out “government shutdown” coverage add‑ons, allowing travelers to protect against flight cancellations that result directly from federal agency shutdowns. While the additional cost is a concern for budget‑conscious travelers, many respondents in a recent survey said that the peace of mind offered by coverage far outweighs the additional expense.

What coverage does travel insurance provide?

Travel insurance is typically structured around several core benefits:

• Trip Cancellation/Interruption – Reimbursement for prepaid, non‑refundable expenses if a trip is canceled or interrupted due to a covered event (including a government shutdown).
• Trip Delay – Coverage for lodging and meals if a flight is delayed beyond a certain threshold.
• Medical Coverage – Emergency medical and dental care when traveling abroad.
• Baggage Loss/Delay – Reimbursement for lost or delayed baggage.
• Travel Assistance – 24‑hour concierge services to help rebook flights, find hotels, or replace lost passports.

The TIA’s website, which is linked in the KSTP article, explains that insurers are expanding the “trip interruption” clause to include government shutdowns as a specific trigger. This means travelers can claim for costs incurred when flights are canceled because the TSA or FAA are unable to operate.

Who is buying insurance and why

According to the article, a 2024 survey conducted by the TIA found that 42% of travelers who had booked a trip during the most recent shutdown purchased travel insurance specifically because of the shutdown. The survey also highlighted that older travelers (ages 45–65) were the most likely demographic to buy insurance, with 55% of respondents in that age group citing the shutdown as a factor. In contrast, only 23% of travelers under 30 reported that the shutdown influenced their decision to purchase coverage.

Travel experts quoted in the story explain that many people see the government shutdown as a reminder that the travel industry is not immune to domestic political events. “We’re all still learning how to manage risk,” says Lisa Monroe, a senior analyst with the travel industry research firm, Travel Insight. “With a shutdown, the normal assumptions about flight schedules and airport operations break down. Insurance can fill that gap.”

The role of insurers in the shutdown

The article also notes that insurers have taken a proactive stance, offering special promotions during the shutdown period. Some companies have introduced “government shutdown” packages that bundle standard travel insurance with a waiver for flight cancellation due to shutdowns. Others have rolled out “no‑claims” bonuses for travelers who book early in the shutdown period, incentivizing early purchasing.

One insurer, Global Travel Protect, offers a “Shutdown Shield” add‑on for $5 per trip. The add‑on covers up to 80% of flight cancellation costs caused by a government shutdown. The company claims that its policy will also cover related travel delays, such as missed connecting flights or overnight stays caused by delays in security screening.

Implications for the travel industry

The KSTP article concludes that the increased uptake of travel insurance may have broader implications for the travel industry. Airlines have reported that a surge in insurance sales correlates with a more resilient revenue stream, as travelers are less likely to cancel flights for fear of financial loss. Hotel chains, too, are noting that customers who purchase insurance are more likely to pay for reservations upfront, reducing no‑show rates.

The TIA website, linked in the article, also points out that travel insurance providers are now partnering with airlines and hotels to offer bundled packages. “If a customer books a flight and a hotel through our platform, we can provide a one‑stop solution for insurance,” says TIA director Jonathan Reyes. “This integration not only enhances customer experience but also increases the value proposition for all parties involved.”

Bottom line

The KSTP Money Matters piece paints a clear picture: the U.S. government shutdown has spurred a notable shift in traveler behavior, with more people turning to travel insurance as a hedge against the uncertainty of flight disruptions. The rise in insurance purchases reflects a broader industry trend toward risk mitigation, as travelers recognize that political events can have a direct, costly impact on their travel plans. Insurers have responded by tailoring products to address the specific risks associated with shutdowns, while airlines and hotels have begun to offer bundled deals that make purchasing insurance as seamless as booking a flight or room. As the country’s political landscape continues to evolve, it is likely that travel insurance will remain an increasingly essential component of the modern traveler’s travel toolkit.