WHATS THE STORY WITH THE COST OF TRAVEL INSURANCE?
THE DAYS OF no-expense-spared month-long summer jaunts to exotic islands might well be behind us, at least for now, but many people will be forgiven for splashing out a little on a couple of weeks somewhere cheap and cheerful this year in order to escape the relentless gloom at home.
With frugality now fashionable, most people are keenly aware of the wisdom of shopping around for better value and, if they’re not holding out for last-minute deals with tour operators, they’re using the web to find cheaper DIY alternatives.
While shopping around for travel insurance might not be as much fun, it can also save significant sums: a party of four who take out a policy with an online broker as opposed to a tour operator can end up saving over 500 per cent – or €100.
The huge price gaps between insurance policies prompted a UK price comparison website, confused.com, to survey costs recently; last week it reported that people could be paying as much as six times more than they needed for travel insurance, particularly when they take out policies with tour operators.
“Even if consumers choose to purchase their holiday through a travel agent, they should not feel obligated to take their travel insurance out with them too,” says Steve Williams, the site’s head of travel insurance. “While holiday insurance is a must-have, it makes little sense to pay through the nose for it, especially when shopping around for a better deal is likely to save money.”
Although the study focused on tour operators in the UK, the same kind of price gaps exist in this country. A couple booking a cheap holiday with Budget Travel to the Costa del Sol, departing next week, will have to pay €37 per person if they want to take out a policy directly with the tour operator. One of the other major Irish tour operators, Sunway, meanwhile, charges €30 for insurance.
The policies sold directly by the airlines are cheaper but still not great value. Ryanair recently tweaked its website so that, instead of automatically adding travel insurance onto every booking and leaving it up to its customers to deselect it, the airline now asks passengers to opt in or opt out of the policies.
It is, dare we say it, a surprisingly consumer-friendly change and one which will probably reduce the number of people inadvertently paying for insurance that they don’t want or need.
For its part, Aer Lingus has a policy of making its travel insurance policies the default option for people making bookings – they have to opt out if they don’t want to spend €16.50 for single-trip cover. By comparison, online firm 123.ie sells single-trip policies for €6.50 while insurancebookers.ie is even cheaper, with its most basic single-trip policy costing just €5.95.
It is worth bearing in mind, however, that, as with all insurance products, the price is not the be-all and end-all. The level of cover is far more important – some cheap policies only cover trips within the EU, while others have high excesses and don’t cover sports equipment, winter sports or even lost baggage or delayed flights.
The tour operators defend their higher prices by pointing out that the policies are perfectly suited to cover the needs of their customers, and that the reps on site are familiar with the policies, so know exactly what is covered and who to contact should something go wrong.
Clem Walsh of Budget Travel says that comparing prices between online brokers and tour operators is unfair. He says in many cases they do not offer the same level of cover. “The cheaper policies may well be all you need, unless something goes wrong. There will be a helpline with it, of course, but the local reps – and this goes for all tour operators – cannot be expected to know all the details of all the policies out there, but they will know the policies sold by that tour operator like the back of their hands, they will know what is covered and who to call.”
ALL THIS, of course, assumes people bother with insurance in the first place. Even during the boom years, Irish people displayed a strange reluctance to take out policies. Repeated studies – most notably from the VHI – have shown that nearly half of those who go abroad every year go without.
The disregard is baffling when you consider all the terrible things that are just waiting to happen to travellers. Cancelled flights, lost bags, theft, illness, wars, earthquakes, global pandemics and tour operators going out of business are just eight that spring immediately to mind.
And such things do happen. VHI Healthcare insures 360,000 people, making them the largest player in the market. Last week the company announced that it had paid out over €7 million in settling nearly 15,000 claims of holders of its MultiTrip travel insurance policy last year.
VHI Healthcare’s Declan Moran says the figures speak for themselves “in terms of the importance of travel insurance and the value for money it gives to customers”.
He urges people thinking of taking out travel insurance to study the terms and conditions carefully and to make sure they are covered for unexpected medical emergencies and illnesses arising from pre-existing conditions, something which VHI policies do cover while many other cheaper ones don’t.
And, when things do go wrong, the cost associated with putting it right can be absolutely eye-watering – in the US, having a broken limb mended will set you back €15,000, while the price of getting an air ambulance home should it be required will cost well over €30,000.
Some people rely on the insurance which can come with credit cards, although, in Pricewatch’s experience, such policies are frequently inadequate and at best offer limited cover, typically, for incidents which occur while you are on a train, bus, plane or rented car which has been paid for on the card.
A free European Health Insurance Card provides some level of medical cover and entitles you to healthcare across the EU. It’s free, can be ordered online and arrives in less than a week, but it is not a replacement for insurance as it does not cover repatriation costs, lost or damaged baggage or cancelled or aborted holidays.
Sun protection: Travel insurance tips
1. Shop around Check what on offer online. Using the web, you can get 10 quotes in less than 10 minutes.
2. Read the terms and conditions
You might need a magnifying glass to do
it but there's no point in buying a policy
only to find it's worthless because you weren't supposed to go abseiling.
3. Arrange travel insurance well in advance Almost two-thirds of all
claims are for cancellations due to
changing circumstances or family bereavements.
4. Bring all emergency contact details you might need If you don't have them,
you can't expect anyone else to know
who you're supposed to call.
5. Keep all receipts If you incur any expenses because of lost baggage, crime
or illness, make sure you hang on to your receipts.
6. Call the cops Always contact the local police in the event of a theft overseas – no police report, no claim.
