A new report on travel insurance by the office of Senator Edward J. Markey (D-MA) titled “Flyer Beware” raises questions over the value of “opt in, opt out” policies that are automatically offered by airlines and online travel insurance agencies (OTA). These so-called “opt in, opt out” policies are typically shown to consumers during the booking process.
The Markey travel insurance report “Flyer Beware: Is Travel Insurance Worth It?” include these findings on airlines and OTA:
- Travelers spent $2.8 billion on travel protection in 2016, 2.5 times more than they spent in 2004, with airlines and OTAs earning an undisclosed fee on every policy sold.
- The airline and OTA online-ticketing process encourages and pressures travelers to buy travel insurance, with 15 of the 16 companies evaluated not allowing travelers to purchase airplane tickets without buying or declining to buy recommended travel insurance.
- Airline and OTA websites offer only bare-bones travel insurance plans with little coverage and a long list of exclusions that leave customers stranded.
- The airline and OTA websites commonly overstate policies’ flexibility and bury the details of coverage limitations in fine print.
- Only two travel insurance companies provide 93 percent of the policies offered on airline and OTA websites.
While the Markey travel insurance report raises questions about the effectiveness of airline insurance, travel columnists Ed Perkins of Chicago Tribune writes in his article “Travel Insurance: Beware doesn’t mean ‘don’t buy” that Markey shouldn’t necessarily slam the policies offered by airlines but instead focus on encouraging travelers to shop around for travel insurance. Perkins says those that avoid buying during the booking process may likely find a better deal through a third-party.
Perkins writes, “In examining the results of the report, I found that the benefits the opt-in policies were likely to be adequate to meet the needs of most travelers. But I also confirmed the report’s finding that third-party policies generally provide better coverage at lower prices that range from four to six percent of total trip costs.”
“The idea of insurance isn’t a “beware” situation, it’s the price and coverage of the policies the airlines and OTAs sell.”
Markey recommended travelers search third-party travel insurance websites like InsureMyTrip because it “shows the wide availability of similarly priced policies with more robust and flexible coverage.”
InsureMyTrip CEO Jim Grace also read the Markey travel insurance report. He also agrees with reporter Ed Perkins when it comes to encouraging travelers to understand the different types of travel insurance available. “Travelers do have options, even if they don’t know it right away when buying their travel,” says Grace.
“We’ve been saying for 18 years, don’t just buy the first travel insurance plan you see when booking online. There’s a far better way to buy travel insurance. Use InsureMyTrip, take the time to understand the coverages you’re purchasing, get our expert advice, compare plans and know how your chosen plan will protect you.”