Travel insurance trap identified
A study by Australian comparison website Finder.com has uncovered a travel insurance trap that customers could be falling into unknowingly. The study found that Australians could be paying more than three times the cost of travel insurance bought directly from a provider when they buy through a travel agent, and two-and-a-half times more when buying through an airline. The website’s researchers used three different traveller profiles going to three different countries to compare the cost of policies from agents, airlines and insurance providers, finding significant differences between the costs of many of them.
The three different traveller profiles were a 21-year-old student, a family of four, and an older couple aged 55 and 60, with the quotes from the different distribution channels being analysed for each profile. The airlines under scrutiny were Qantas, Virgin and Jetstar, the three travel agencies were Harvey World Travel, Flight Centre and Mann Travel, while the direct providers were InsureandGo, Travel Insurance Direct, Virgin Money, AIG, 1Cover, AMEX and Cover-More. The travel insurance quotes were gathered based on a 21-day trip to Europe, a seven-day holiday in Bangkok and a two-week holiday in the US for each traveller or group of travellers.
Michelle Hutchison, spokesperson for Finder.com, was shocked by the results of the study: “Airlines and travel agencies have been getting away with selling travel insurance policies – some at much higher costs than direct providers – because too many travellers are paying these premiums without shopping around. This is fuelling a lack of competition on price and options for travellers. For instance, the airlines in [our] survey fall down on flexibility, with only comprehensive level of cover available and no excess eliminator option. It’s clear that some travel agencies and airlines are passing the costs of their commissions on to their customers – an expense that travellers don’t need to spend on travel insurance.” Mrs Hutchison added: “Our study shows how important it is to do your research online and compare quotes. Travellers could be getting ripped off by taking the easy road and signing up for travel insurance while sitting in a travel agency booking their holiday or while booking flights online. Read the details of the policies when comparing and make sure they match your needs. There can be a big difference in what you’re covered for between basic, medium and comprehensive cover, so it’s worth considering all levels of cover and the different providers that offer them. The outlay [for a] carefully researched travel insurance policy is relatively small when compared to the amount of money it protects you from [spending] in the instance of significant loss or illness.”