According to the latest “State of Travel Insurance” report prepared by Berkshire Hathaway Travel Protection, more than 20 percent of all travel bookings are done through online travel aggregators, or OTAs. You might know them better by their given names – Expedia, Priceline, Kayak, Booking.com, and so on.
In addition, at least another 50 percent of travel is purchased right from the supplier. “Supplier” is sort of a strange word as it applies to travel. In other businesses the supplier is the factory or farm that supplies the product to the market, but in the case of travel the supplier is an airline, cruise line, railroad, hotel, or other travel-service provider.
Almost every OTA and supplier offers some form of travel insurance. Now, we all know that travel insurance is a great, great thing. It’s the Mount Rushmore of travel services. But all travel insurance is not created alike. The question is, should you buy travel insurance from an OTA or supplier, or should you look elsewhere for your protection?
Before we answer that, let’s look at some of the characteristics of OTA and supplier travel insurance.
- A lot of it is the same. Many of the plans offered by airlines and cruise lines are identical. Different airlines/cruise lines, different names, same plan. There are reasons for that, obviously. Suppliers contract with travel-insurance companies to provide their coverage, and when the same company wins the business of Airline A and Airline B, their plans are probably going to be the same. In addition, flight-based travel insurance has to cover flight-related issues, and there simply aren’t that many ways traditional travel insurance can deal with them. (Though there’s always AirCare, which is a fresh approach to protecting flight-related mishaps.)
- It’s simple. Airlines, cruise lines and OTAs don’t usually have travel-insurance experts on staff, and there’s not a lot of time or space for lengthy explanations and detailed plan designs in a supplier’s purchase path. Plans have to be simple by necessity.
- It’s not very expensive. When you’re booking a flight and travel insurance pops up as option as you’re about to check out, it’s a definitive impulse buy. As a result, it has to be priced about the same as all the other impulse buys that an airline bombards you with as you’re about to check out.
- It often doesn’t cover as much as travel insurance you might buy elsewhere. Many plans don’t have travel medical and emergency evacuation, two of the cornerstones of comprehensive travel-insurance plans. Other plans have medical and evacuation and lack trip cancellation.That’s not necessarily a bad thing; it’s just a tradeoff. In order to keep plans simple and costs down, some coverages have to be eliminated.
Still, some travel insurance is better than none at all. How do you decide what to buy, and from whom?
In general, you need to be a savvy consumer. And that means:
- Reading policies before you buy. Most of the travel-insurance complaints on social media deal with policies offered by OTAs and suppliers. Their policies tend to be skinny, and serviced by someone other than the company selling the policy, meaning there’s lots of opportunity for consumer frustration. Don’t be that ill-informed consumer. Read the policy before you buy, and if you don’t like what you see, look elsewhere for coverage.
- Determining what coverage you need before booking. A successful and satisfying travel-insurance purchase actually starts before you visit a supplier site. Think about your trip. What kind of coverage do you need? An airline or OTA plan – or AirCare – is perfect for a business trip, a mini-vacation, or a jaunt to somewhere to take advantage of a bargain fare. ExactCare is comprehensive travel insurance with cancellation, delay, baggage, medical, and evacuation coverage. Understanding your trip and knowing what will best protect it goes a long way toward ensuring that you get the coverage you need.
- Knowing your budget. If you’ve only spent $99 on the flight and you only have an extra $50 to spend and it’s right there, an airline plan (or AirCare) might be just what you need. As a general rule of thumb, plan on spending around 8 percent of your total trip cost on travel insurance.
- Comparison-shopping. Suppliers offer a limited product line because travel insurance isn’t their main business. If you’re looking for a product that better fits your trip, check out a travel-insurance supplier – either an insurance company, like BHTP, or a travel-insurance aggregator like InsureMyTrip or Squaremouth. These sites let you compare plans, match coverages, and find the perfect plan for you.
- Knowing who to contact if something goes wrong. Regardless of who you buy from, having a contact point is always helpful. Before you buy, know how to contact customer service for the supplier and the travel-insurance company, and hang onto that information when you travel. No one wants to have to scramble for this information when trouble strikes.
More travel-insurance questions? Contact us. We’ve got answers.