Measuring Travel Insurance Literacy: Effect on Trust in Providers and Intention to Purchase

Recent research suggests that some deficiencies in the insurance industry might be associated with tourists’ lack of knowledge. However, the literature does not present a tool that captures objective knowledge of travel insurance literacy. This research presents a comprehensive, multi-step scale development process resulting in a 15-item scale, which measures objective knowledge about travel insurance terms, regulations, and processes. The results show that travel insurance literacy is associated with trust in sellers. Although no relationship was found between travel insurance literacy and perceived travel risks, these two constructs influence purchase intention. The results also show that there is no relationship between subjective knowledge (self-assessment literacy) and objective knowledge (ratings on the scale). Hence, the research presents a new measurement tool that differs from self-assessment scales prevailing in the tourism literature, opening new opportunities for literacy constructs in the field. Finally, the findings present key managerial implications for the insurance industry.