Australia’s largest travel insurance provider, Cover-More, has lifted its premiums by an average of 5% in the face of a falling Australian dollar. Cover-More sells around 40% of all travel insurance policies in Australia through a range of brands.
Cover-More declined to speak with Cruise Passenger about the increase, but chief operating officer John Murphy told Fairfax Media that the cost of claims had increased by around 7% since June last year as a result of the weaker dollar, particularly against the US dollar, British pound and Thai baht. “The prices we have put up have been different in different parts of the market. One of the common things behind that has been recovery of claims inflation because of foreign exchange” Mr Murphy said.
Five ways to save on your travel insurance
1. Don’t purchase insurance from a travel agent
A recent survey from travel insurance comparison site finder.com.au found that, on average, travel insurance policies purchased through travel agents can cost up to twice as much as those purchased through a direct insurance supplier. Michelle Hutchison, money expert from finder.com.au, told Cruise Passenger that travel agents do charge commissions and it’s safe to assume that they are passing fees on to consumers.
2. Don’t purchase insurance through airlines
The same finder.com.au survey found that in some cases airline websites charge more than three times the price for basic travel insurance as compared to a direct supplier. Michelle warned consumers to be careful when booking. “Airline websites make it really easy to just tick a box and add the insurance to the cost of your trip while you’re at the checkout, so passengers don’t really consider if the price is reasonable.” A CHOICE survey also found that insurance purchased through airlines is generally higher in price and has more exclusions.
3. Do your research
Don’t take your quote at face value and do your own research to see if you are getting the best deal. Michelle told Cruise Passenger that “if more consumers were savvier at comparing costs for travel insurance policies it would force competition in the market. Providers get away with overcharging because consumers buy it – they wouldn’t charge these prices if there was no demand.”
4. Get the correct insurance
Not all insurance policies are the same. Make sure you have the correct policy for the destination you are visiting and the activities you will be participating in. Remember that things like riding mopeds or snow skiing often aren’t included, so you could be looking at a substantial extra fee or find that you’re not covered at all.
5. Know your rights
It’s important to understand what will or won’t be covered when you need to make a claim. Make sure you take the time to carefully read the Product Disclosure Statement before you purchase insurance. For example, CHOICE survey found that insurance policies purchased through airline websites only gave customers, on average, a maximum of just 10 minutes to read a 14,000 word policy document before they purchased.