Sep 30, 2014

Beware of expensive travel insurance

Fact – buying travel insurance from travel agents or airlines can be twice the price when compared to online specialists like Travel Insurance Plus.

Overpriced Travel Insurance

Airlines and travel agents rely on ‘convenience buying’. For an airline, that is integrating the purchase of travel insurance with the ticketing process, in the hope you select travel insurance as an add on, albeit significantly overpriced.  Travel agents use similar techniques. A common selling technique is to include travel insurance as part of the package, sometimes at more than double the price.

Overpriced Travel Insurance prompted our review

For instance, my father-in-law recently booked a 4 month European holiday.  His travel agency (a leading Australian brand) quoted $1,237.  At Travel Insurance Plus’ our comprehensive product was $687 with better cancellation benefits and included unlimited medical and emergency assistance.

This disparity prompted us to conduct travel insurance mystery shopping.  The mystery shop was conduted in July 2014. The results revealed:

  • Australians are paying on average  32% too much for travel insurance
  • Buying travel insurance through airlines and travel agents can be highly overpriced
  • These price differentials are commission driven

Comparisons were made for a couple travelling for 14 days.  Destinations quoted were European countries, Asian countries and the USA.  All products are comparable, with similar excesses, unlimited medical and unlimited cancellation costs.

  • Europe: Airline quoted $508 & travel agents averaged $548.  Travel Insurance Plus quoted $188 (save up to $360)
  • USA: Airline quoted $704 & travel agents averaged $604. Travel Insurance Plus’ comparable product is $230.  (saving up to $404)
  • Asia: Airline quoted $288 and travel agents averaged $346.  Travel Insurance Plus quoted $87 (saving up to $259)

Excessive travel insurance commissions

The reason airlines and travel agent prices are significantly more expensive is simple – high commission rates.  According to disclosure documents they can earn up to 53% commission on the travel insurance policies they sell.

In every single travel insurance scenario we mystery shopped,  travellers were much better off by buying travel insurance online from providers such as Travel Insurance Plus.

Travel Insurance Plus

At Travel Insurance Plus we offer quality travel insurance for less than you might expect.  100% Australian owned, our customer service and claims centre is based in Australia, so you can be sure to be understood whether you’re fair dinkum up the creek without a paddle, or not within a cooee of help.

For a fast and easy quote click here.

To help you make an educated decision you can compare our products.

By the Travel Insurance Plus Team.

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