Interest in domestic travel insurance grows in New Zealand
Kiwis are now more likely to purchase domestic travel insurance since the global pandemic began, new research shows
Southern Cross Travel Insurance (SCTI) has found that 75 per cent of New Zealanders are considering travelling within New Zealand in the next 12 months and that one quarter of Kiwis are now more likely to purchase domestic travel insurance compared to 12 months ago – a trend that is largely driven by a heightened concern that something could go wrong while on holiday.
In response, the company’s domestic travel insurance policy offers customers unlimited cover when it comes to cancelling or changing their journey before departing; NZ$50,000 per paying person when it comes to amending the journey after departing; $6,000 in rental vehicle excess and $30,000 for baggage and personal items.
Travel disruptions effect a change in consumer behaviours
Twenty-seven per cent of Kiwis are now looking to purchase travel insurance for their domestic travels, compared to just 11 per cent of Kiwis last year before the Covid-19 outbreak began.
SCTI cites that the main reasons for this shift in behaviour are down to concerns that travel may be impacted in some way e.g. cancellations (57 per cent), becoming more aware of the importance of having domestic travel insurance (38 per cent), and planning domestic trips due to not being able to holiday overseas because of Covid-19 (37 per cent).
Cost-effectiveness the key to winning over customers
SCTI’s Chief Executive Jo McCauley explained that many Kiwis taking a road trip don’t often realise that purchasing domestic travel insurance can be more cost-effective than paying for excess reduction directly through a rental car company, and this has been elemental to SCTI in expanding its travel insurance portfolio.
Customers want comprehensive cover, including cancellation, theft and loss of luggage and rental car excess reduction, SCTI said, and the company noted that a customer could pay approximately $90-95* for a seven-day domestic travel insurance policy for two adults aged 35 years-old and two dependent children, which includes cover for their rental vehicle excess.
However, should someone hire a car independently, McCauley notes, an excess is charged if the car is stolen or damaged. In addition, if you want to reduce this excess to something more affordable, an additional daily fee needs to be paid. “We’ve calculated that when hiring a typical family car over seven days, this could cost several hundred dollars – much more than taking out domestic cover with SCTI,” McCauley said.
SCTI to update its policies with plain language for customer transparency
Strengthening its commitment to transparency and providing excellent customer service, SCTI has written its new policy in plain language. McCauley explains that while nobody likes to read the small print, it’s incredibly important that customers know what they’re covered for.
“SCTI is the first travel insurer in New Zealand to have its domestic travel insurance policy awarded the Write Mark. This is an independent endorsement awarded to documents that achieve a high standard of plain language,” McCauley added.
SCTI plans to introduce plain language to some of its other popular policies soon – a move that will no doubt be well-received by its existing and new customers, by improving their access to and understanding of their insurance. ITIJ also imagines that this will help reduce the number of rejected claims. What’s more, clear policy wording has been proven to improve the customer journey time an time again, and during Covid-19 and the travel uncertainty that it has created, it’s good to see insurers leaning towards more customer-centric offerings.