5 reasons why free travel insurance may not be sufficient
This article was first published on 31 October 2017 and updated on 23 August 2018
Whether you’re going on a package tour, or simply made a flight and hotel booking via an agent, you may be told there’s “free travel insurance”, or a special price on the insurance policy they offer (way cheaper than market rates!)
That’s one of the plus points of using a travel agent, right? Before you decide to go ahead with it, here are some good reasons not to:
If the tour agent is selling the insurance, it may not be in your interest
It’s not uncommon for tour agents to get commissions for selling travel insurance policies.
Now there’s nothing inherently wrong with these sorts of commissions or referral fees – but the problem is that you can’t be sure it’s in your interest.
You don’t know, for example, if the policy being pushed by the travel agent is the most appropriate for you. The agent may be inclined to sell a policy just because it fetches the highest commissions – even if that has very limited coverage.
You should always compare between different policies to see if the coverage is right for what you’re doing.
To do that, you need to look at different policies from multiple insurers, not just trust the ones your travel agent works with (and some agents may not even work with more than one insurer).
The coverage may not be clear to you
Some travel insurance policies provide unlimited coverage for medical evacuation.
That means if you need to be flown back to Singapore for treatment or to rescue you from a mountain chasm, you won’t have to fork out a single cent.
On the other hand, some cheaper travel policies only provide a payout to…well, fly your remains back to Singapore (repatriation of remains). That’s definitely not as helpful. Believe us, you’ll be past worrying about money at that point.
You should also look at coverage for things like lost luggage, flight delays, and trip cancellations. The payout can vary significantly between each insurer.
On the other hand, some policies don’t allow you to claim for lost cash at all. Payouts for even big-ticket items such as your laptop might be capped at just $500. Some policies don’t cover the loss of passports or important documents at all.
Before relying on the complimentary insurance, always check the coverage. It may be better to fork out a few more dollars, and buy a more comprehensive policy that the freebie.
You might miss out on exclusive deals
Yes, travel insurance also come with some exclusive discounts, deals and even freebies. In some cases, they might reward you with a luggage for your next trip.
Of course, this is highly dependent on the type of travel insurance you purchase. Needless to say, the higher premium plans will award you with better rewards.
Most insurers put these exclusive deals online. If you get them via a travel agent, you might get the same policy at the same price, but minus the special rewards.
What happens if the tour agency closes down?
One reason to buy travel insurance – and to buy it early – is if your travel agent closes down (taking your deposit with them).
In fact, this is one of the main reasons why your travel agent prompts you to buy insurance: the Singapore Tourism Board (STB) requires that travel agents record your decision to buy insurance (or not), on packages costing $1,000 or above.
What many travellers forget to ask is: if the tour agent closes down unexpectedly, and they bought insurance from the agent, who do they call?
If you’re relying on the travel agent as the sole point of contact with the insurance provider (e.g. you buy it from the agent, and you expect all claims to go through the agent), you could be facing one more headache when said agent vanishes.
Sure, you’ll find who to get in touch with eventually, but do you really want to go through that? Especially at a time when you’re already frustrated, and may be in the midst of trying to book new flights and accommodations?
If you use your own insurer, you can call and place your claim, within minutes of discovering that your tour agent vanished.
You don’t know if you’re getting the best price
When people buy insurance through the travel agent, they seldom bother to check the price (many times you just get a quote, and are asked “yes” or “no”).
Not only do you lack details of the coverage, you don’t even know if you’re getting a good price.
For all you know, the travel agent’s $50 insurance has the same coverage as a $17 policy. Had you sourced for it yourself, you would have gotten a better price, and equally quick too.
Don’t just sign on the dotted line out of convenience – every dollar saved is a little more that can go toward your trip.