Forty-nine-year-old Maggie Smith has been dating her boyfriend for just under a year. “We have a great relationship, but I’m set in my ways,” says the executive assistant from San Francisco, who asked that her name be changed for publication. “I can’t tell you this will be my lifelong partner.”
The pair went through what she calls “a little bit of a hiccup” before a recent trip to Mexico, which left her panicking. “I was thinking, oh my god, I put all this on my credit cards. If I cancel, what am I going to lose?” she remembers. “But we went on the trip and we were fine.”
When she planned their next vacation—to a music festival over July 4th, with another couple in tow—Smith was intrigued to see an unfamiliar add-on served up with the apartment they were renting: break-up insurance.
For a little more than $100, she receives $1,000 of coverage if their relationship proves rocky enough that the pair has to cancel the trip. “I wanted that peace of mind to back out. I’m usually one of those people who free-balls, and I don’t do insurance, but what pulled me in was the heartbreak protection,” she says, pausing. “A lot happens in the summer.”
What is break-up insurance?
Smith is just one of the happy customers of Annie Sloan, the entrepreneur who came up with this canny idea. Sloan runs Host Co, a back-end service platform for more than 25,000 apartments rented on Airbnb, VRBO, and the like.
“No one I have spoken to has not had some kind of anecdote about going on a horrible trip with a boyfriend they should have broken up with,” she says. In Sloan’s case, it was a trip long ago to Central America to visit her sister who was living there. “For three weeks, he just stayed drunk all the time,” she says.
Insurance is more familiar for physical risks, she continues, as travelers “think of tornadoes and catastrophic accidents, but they don’t think about ‘I don’t like my boyfriend anymore, and we have a three-week trip to Europe planned that I don’t want to go on.’ The consumer need is immediate.”
It was easy enough to tack on an extra opt-in to every vacation-home rental booking her firm manages. Moreover, it was straightforward because the product she’s dubbed “break-up insurance” already exists by another name: it’s known as CFAR, or Cancel for Any Reason. Such policies provide the most comprehensive—and expensive—coverage the industry offers, but the higher premiums will cover reimbursement of up to 75 percent of nonrefundable trip expenses for any reason (hence the name).
Historically, CFAR might have been purchased by someone unsure if work would allow them time off for a planned vacation, for example, but Sloan saw a way to make it resonate with a far wider audience. Host Co’s coverage is provided by Faye Travel Insurance and is available to residents of every state other than New York due to local insurance regulations.
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How to get break-up insurance
For now, Sloan’s break-up insurance is available only to people who book vacation rentals that her company manages. Any owner who has tasked Host Co with handling bookings can opt into this add-on, which will typically be sent to a traveler via a confirmation email or text. It’s offered alongside massages, chefs, and other upgrades. There’s also rain-proofing via the weather insurer Weather Promise and rental-damage protection to offset good faith upsets like the lamp broken by a curious toddler.
Travelers can decide the level of coverage they want, up to 75 percent, and can cash in the policy up to 24 hours before they’re due to leave. It’s a win-win, says Sloan, because property managers appreciate it, too. “They have heard every excuse under the sun as to why people are canceling at the last minute—we’ve done polls on it,” she laughs. “My peacock died, for example, or I got rabies. The line between being a businessperson and having empathy for these excuses is very difficult.” Breakup insurance is the ideal financial Band-Aid.
Who break-up insurance is for
Of course, travelers might not be hedging against their own breakup. Lucy Taylor (whose name has also been changed) is a 27 year old who is flying to a wedding in October and splitting an apartment with three friends for the weekend.
Their pal the groom has been expressing hesitation about his fiancée, a woman that their group has also struggled to embrace. “At the beginning we liked her, but once you get over that honeymoon period, somebody’s true colors start to show,” Taylor says, “So we’ve been preparing for the worst.” In total, the group spent $230 to protect $1,200 of their outlay on that apartment and, if his cold feet come at the last minute, the gas it will cost them to drive there. “We hope we won’t need it, but it’s always good to be on the safe side.”
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Host Co’s Sloan points to several reasons why such break-up insurance is more viable than ever, especially for women like Lucy and Maggie. Women drive both travel planning decisions (from 80 to 85 percent of the time, according to varying estimates), and travel is increasingly deployed to assess a relationship’s solidity: the so-called turbulence test, which 37 percent of people are willing to undertake. And since we’re marrying later than ever, we’re also experiencing more relationships—and inevitably, more breakups.
But there are barriers to this idea, well, breaking out. Take the lack of word of mouth. After all, no one will want to mention they took out break-up insurance if they didn’t need to use it—and if they did, it’s hardly the first confession they’ll sob about to a caring friend. (Note that both Lucy and Maggie would only speak to Afar if their names were changed.)
There’s a psychological barrier to overcome, too: Taking out such coverage on your own loved one is an acknowledgment that, perhaps, the relationship has run out of road long before you take that trip.
Maggie, of course, has made that practical admission, in part because of her last near-miss on that Mexico trip. With about a month to go until that music festival, she’s quietly confident that her break-up insurance investment will prove to be a waste of money. “It’s probably a 10 percent likelihood I would use it right now,” she says. “All in all, I think we will end up going, but it’s just nice to have this in my back pocket.”
