February 9, 2026
Travel insurance is changing. Instead of buying it separately, most travelers now embed insurance into the checkout flow when booking flights, hotels, or rental cars. By 2025, over 55% of U.S. travel insurance policies will be sold this way, reshaping the industry.
Here’s why embedded insurance is gaining traction:
Standalone insurance still appeals to some, offering higher medical coverage ($100K–$500K) and specialized options like “Cancel For Any Reason.” However, its market share is shrinking, and customer acquisition remains costly.
The trend is clear: embedded insurance is becoming the preferred choice for most travelers, delivering protection when and where it’s needed most.
For years, buying standalone travel insurance meant going to an insurer's website, comparing policies, and filling out separate forms. While this model still exists, it's facing challenges as travelers' buying habits evolve.
The standalone market has seen some interesting shifts. Adoption among U.S. leisure travelers jumped from 20% in 2020 to 50% in 2025 [7]. However, standalone "direct subscription" policies now make up just 30% of the U.S. market, with bundled and embedded insurance taking a dominant 55% market share [5]. By 2026, the U.S. standalone market is projected to be worth $8.91 billion [7]. This growth suggests standalone insurance is becoming a niche option, particularly for seasoned travelers looking for tailored coverage.
Travelers are also becoming more selective. The share of customers opting for just 1–2 specific benefit bundles (like medical coverage and trip delay) rose from 27.2% to 35.8% in 2025 [4]. As battleface pointed out:
"Today's travelers are more informed and deliberate about their insurance choices. They're researching specific risks related to their trips and purchasing targeted protection rather than accepting default comprehensive packages."
This shift in behavior explains why standalone providers face rising customer acquisition costs.
Standalone insurance providers have to work hard to grab travelers' attention, pulling them away from their booking process. This means investing heavily in marketing and lead generation to capture interest outside the main purchase journey [9][10]. Alex Maffeo, CEO & Founder of Boost Insurance, highlights the issue:
"Typically, buying traditional insurance includes multiple disjointed steps, such as navigating multiple websites, submitting documents multiple times, and even offline components."
These extra steps create friction, increasing the chances of customers dropping off and driving up acquisition costs.
Standalone providers often struggle with conversion rates due to the nature of their marketing. They rely on aggressive advertising to bring users to their sites, but travel insurance isn’t exactly a product that excites consumers [1]. This can lead to "marketing fatigue", where potential buyers tune out the messaging, resulting in lower conversions compared to insurance embedded seamlessly into the travel booking process.
The average U.S. travel insurance premium is $204 in 2025, typically accounting for 4% to 6% of the total trip cost [5]. While 75% of policies are now purchased online [5], standalone providers face stiff competition from embedded options that offer a smoother, one-click experience during checkout. This convenience often makes embedded insurance the preferred choice.
Building trust is another hurdle for standalone providers. To stay competitive, they emphasize features that embedded options often lack. These include high medical coverage limits (ranging from $100,000 to $500,000), pre-existing condition waivers, and "Cancel For Any Reason" (CFAR) coverage [5][6]. Such features are especially valuable for international travelers, as credit card benefits usually cap medical coverage at $50,000 and exclude pre-existing conditions [6][7].
Trust has been a sticking point since COVID-19, with claim denials damaging confidence in the industry. This has led to increased demand for clear, easy-to-understand policy summaries [7]. To address this, standalone insurers are introducing AI-powered quote assistants and offering 24/7 mobile assistance to rebuild credibility. Interestingly, 61% of travelers are willing to pay extra for round-the-clock access to human customer service [11].
While standalone travel insurance offers unique advantages, these efforts highlight the growing preference for simpler, integrated technology for embedded insurance that fits seamlessly into the booking process.
Embedded travel insurance weaves coverage directly into the booking process. Instead of requiring travelers to search for insurance separately, it presents the option right when they’re booking their trip - making the decision feel natural and timely. As standalone attach rates dip, this integrated approach aligns with changing traveler behaviors.
This integrated model is transforming how travelers secure protection. For example, 92% of European carriers now offer insurance within the booking flow [12]. A Turkish airline that adopted an API-first embedded system reported a 400% surge in travel insurance purchases immediately after launch [12]. Leading airline programs now see attachment rates of up to 15%, meaning 15 out of every 100 ticket buyers opt for insurance [12]. By 2025, online and API-driven distribution is expected to account for 76.38% of the embedded insurance market [15].
One major advantage of embedded insurance is its ability to lower acquisition costs. By tapping into the existing customer base of airlines, booking platforms, and travel sites, insurers bypass the need for costly ad campaigns or lead-generation efforts [15]. Dave Turner, Head of Account Management at AXA Partners US, highlights the benefits:
"What matters for the insurer is lower distribution and acquisition costs; expanded market reach; market-specific benefits; and tailored terms and conditions."
Embedded insurance achieves 10x higher conversion rates compared to traditional standalone programs [12]. The key lies in strategic placement and personalization. Olivier Michel, CEO and Founder of Ancileo, explains:
"Due to technology constraints, airlines tend to add travel insurance in their ancillary add-on section... placing the travel insurance integration on the Payment page actually drives the highest conversion."
Offering travelers two options - such as a comprehensive plan and a basic cancellation policy - can further enhance conversions by catering to different risk preferences [2]. This approach also has a direct impact on profitability, with embedded insurance increasing airline ticket profitability by 10% to 30% [12]. As Kasko.io notes:
"Achieving 15% attachment rate isn't the result of three big changes, it is the outcome of 30 to 40 micro-optimisations, often implemented weekly."
By continuously refining elements like pricing, placement, and messaging through API-first platforms, businesses can fine-tune their offerings to maximize both conversions and customer satisfaction.
Trust is a cornerstone of embedded insurance. When offered by a familiar airline or booking platform, the insurance gains credibility by association. AI-driven personalization adds another layer of trust by tailoring policy recommendations based on destination-specific risks during checkout [13]. To further build confidence, some platforms use AI to handle frequent, low-cost claims - like baggage delays - in minutes instead of days [12]. This seamless end-to-end experience, from purchase to claim resolution, not only boosts trust but also encourages repeat purchases, something standalone providers often struggle to achieve.
Both standalone and embedded travel insurance models come with their own strengths and limitations. Standalone travel insurance provides comprehensive coverage, offering medical limits between $100,000 and $500,000 and handling 78% of U.S. travel claims. However, acquiring customers for standalone policies often requires significant spending on ads and SEO efforts [5]. Additionally, travelers must actively seek out these policies separately from their booking process [1]. With an average premium of $204 - equivalent to 4% to 6% of the total trip cost - standalone insurance can sometimes feel disconnected from the booking experience [5].
Embedded insurance, on the other hand, offers a seamless alternative. By integrating directly into the checkout process, it dramatically reduces acquisition costs and achieves much higher conversion rates [2]. This model captures 55% of the U.S. market share, compared to standalone insurance’s 30% [5]. The timing of the offer is a major advantage. As Alex Timm, CEO of Root Insurance, explains:
"Talking to consumers at the time when they really need insurance - like when they're purchasing a vehicle - is a lot better customer experience than being bombarded with advertisements to try to get somebody to a website"
.
However, embedded insurance typically provides less comprehensive coverage compared to standalone policies.
Feature
Standalone Travel Insurance
Embedded Travel Insurance
30%
55% (bundled)
High (requires direct marketing)
Low (uses partner traffic)
Lower (requires separate research)
Higher (offered at checkout)
Covers 78% of claims; $100K–$500K medical limits
Typically more basic coverage
Post-booking or via separate search
Real-time during checkout
Ultimately, the comparison boils down to convenience versus customization. Embedded insurance stands out for its ease of integration and ability to convert customers at the moment of purchase. Meanwhile, standalone policies remain the go-to option for travelers seeking more extensive protection, especially for complex trips. With 73.1% of airlines now offering in-path insurance during checkout [2], the industry is clearly leaning toward embedded options. Still, standalone policies continue to play a critical role for those who prioritize comprehensive coverage.
The U.S. travel insurance market is shifting, with 55% of it now driven by bundled offerings [5]. Additionally, 73.1% of airlines integrate insurance directly into their checkout flows [2]. These trends highlight a clear movement toward embedded solutions that simplify the customer journey.
Embedded insurance solutions consistently deliver better results. They show higher conversion rates, reduced acquisition costs, and stronger trust signals. For example, post-claim Net Promoter Scores (NPS) for embedded options reach an impressive +65, compared to a dismal -28 for standalone insurers [2]. This shift is transforming how travel insurance is delivered, making integration at checkout a game-changer.
For businesses considering this approach, the evidence is clear: placing insurance options on the Payment page leads to the best conversion rates [2]. With the global travel insurance market projected to hit $105.6 billion by 2034, fueled by a 15.9% annual growth rate [3], embed insurance into any journey not only aligns with market trends but also creates a smoother experience for customers. The old model of redirecting buyers to separate insurance websites is fading, replaced by a system where protection is offered exactly where the purchase takes place.
API-driven integrations further enhance this seamless experience by allowing businesses to prefill customer details, enabling coverage to be selected in just three clicks - all without redirecting users off the platform [1]. This approach meets the expectations of today’s travelers, leaving only one question: how quickly can businesses adapt to this embedded insurance model?
Standalone travel insurance works best for travelers with unique requirements, such as coverage for pre-existing medical conditions, protection for expensive belongings, or extended travel durations. It's also a great choice for those looking for customized policies or coverage for activities that standard checkout insurance might not include. On the other hand, checkout insurance is perfect for straightforward trips, offering quick and convenient protection. Its smooth integration during the booking process and user-friendly setup make it an easy option, often gaining higher adoption rates due to its simplicity and the trust it builds during checkout.
When looking at embedded travel insurance, it's crucial to spot any gaps, especially when it comes to pandemic-related coverage like COVID-19. A lot of policies still exclude claims tied to pandemics, which can leave travelers vulnerable even if they think they're covered. Be sure to double-check the details so you know exactly what protection you're getting.
When you're checking out, a side-by-side comparison tool can make choosing the right plan much easier. Look for an interface that clearly displays key details like coverage limits, exclusions, prices (in USD), and customer ratings. A well-organized and consistent layout helps you quickly evaluate your options without interrupting the checkout process. This not only simplifies decision-making but also builds trust and creates a smoother, more user-friendly experience.