Millions Of Holidaymakers May Not Be Adequately Covered For Their Travels

The findings from a new survey clearly show that little has changed over the past three years since Direct Line commissioned similar research in 1998 and that tour operators and travel agents appear to have little or no regard for the actual needs of their customers despite selling insurance considerably more expensive then most other policies.**

More worryingly this survey also shows an increase in holidaymakers who said the main reason for arranging their travel insurance through their travel agents and tour operators was because 'insurance was included as part of the holiday package' (41%). This compares with 30% in 1998 and could indicate how tour companies are increasing their practices of "tying" insurance into the sale of their holidays enabling them to sell more policies as well as hide the true cost of their insurance.

The Direct Line Travel Insurance 'Great Escape 2' survey shows the majority of travel agents or tour operators from whom people purchased their travel insurance did not take steps to make sure the cover they sold suited people's needs. In fact a third of those (33%) who bought insurance said the cover they bought simply wasn't explained at all and a further 33% spent less than 5 minutes discussing their requirements. This compares with 41% and 31% respectively revealed in the similar survey conducted three years ago.

Over half of holidaymakers interviewed in the latest survey (54%) felt that the most important aspect of having travel insurance was cover for medical costs. However almost half (47%) were not asked about the state of health of those travelling even though pre-existing medical conditions can be excluded from travel insurance cover. Of those who did identify a specific condition, 8 out of 10 (81%) said that 'nothing happened'. This compares with 1998 where over half of respondents (52%) were asked to specify conditions yet again over 8 out of 10 said that 'no further action was taken'.

Tony Chilcott, Travel Business Manager at Direct Line said:

"As this survey shows these companies are still happy to continue to make huge commissions from the sale of travel insurance but are not prepared to spend time explaining the policies they sell to customers or making sure cover is appropriate for people's needs."

"Clearly the tour companies appear to have little regard for the welfare of their travel insurance customers and whilst the findings do show signs of some improvement, over a period of 3 years it just isn't enough."

"We would advise customers to consider various factors when buying travel insurance, in particular what medical conditions might be excluded and whether your planned holiday activity is covered. Not having adequate protection can result in financially dire consequences should something go wrong on holiday."

* Based on Mintel 2000 - 18.9 million adults took at least one holiday abroad in the last 12 months. 85% of those who travel each year have travel insurance and 70% of travel insurance is sold by travel agents and tour operators, giving 11.2 million people. According to the above mentioned MORI survey 2001, two thirds of those interviewed spent little or no time discussing their insurance. 33% said cover wasn't explained at all and 33% spent less than 5 minutes discussing it, resulting in a figure of 7.5 million people could have inappropriate travel insurance.

** A survey by Holiday Which in Spring 2001 showed that the high street multiples were charging four times as much as the cheapest Best Buy.

Technical details

This survey was undertaken by MORI Financial Services between 11 and 26th April 2001 and a total of 1007 respondents who had been booked package holidays and purchased their travel insurance from a travel agent or tour operators within the last 12 months were interviewed by telephone.

Between 28 Match and 1 April 1998 MORI On-Line interviewed 984 people who had booked package holidays and purchased their travel insurance from a travel agent or tour operator within the last twelve months by telephone.

Survey Findings

Those who had bought travel insurance when arranging a holiday through a travel agent or tour operator in the last twelve months

Regions

• Holidaymakers in Scotland are likely to spend more time discussing their insurance requirements than anywhere else in the country. 28% spent 5 - 10 minutes compared to the average of 20%.
• Those in the Granada region are more likely to not discuss their insurance requirements at all. 40% compared to the average of 33%.
• Over two thirds (68%) of those in the Anglian and Meridian & Channel TV region consider medical costs as the most important aspect of travel insurance.
• Those in the West Country consider getting you home in a medical emergency a more important aspect to travel insurance than medical costs.
• Those in the HTV region were more likely to be asked about their health (56%) than anywhere else in the country.

Age

• Surprisingly even though existing medical conditions can have an impact on the level of cover required and can even be excluded from cover, almost half of the over 75s (47%) didn't discuss their travel insurance requirements and just signed a bit of paper.
• Just under half (46%) of those aged over 75 were not asked about the state of their health.

Families

• Men are more inclined to just sign a piece of paper when it comes to travel insurance. 35% compared to 32% of women.
• Men are less likely to be asked about their medical status than women, 51% of men were not asked compared to 45% of women.
• Those with children were less likely to be asked about the state of health of those travelling (37%) than those people without children (49%).
• Families with children were more likely to participate in adventurous activities whilst on holiday than anybody else.

Direct Line's Guide to Buying Travel Insurance

1. Don't automatically buy insurance through a travel agent or tour operator. Research by Direct Line shows that insurance sold by travel agents is on average twice the price of insurance sold through a direct insurer.
2. Take out an annual insurance policy if you travel abroad several times a year - it can work out a lot cheaper. If you're planning on staying comparatively close to home, an annual policy which covers Europe only may be better value still.
3. With an annual policy check the geography and cover. If you are only intending to go to Europe you won't need worldwide cover. Similarly ensure you can opt out of winter sports cover if you are not intending to go skiing.
4. Check you're not duplicating cover unnecessarily. Your home contents policy may already cover personal possessions taken outside the home and, if so, you may be able to reduce your travel insurance premium by opting out of cover for lost baggage.
5. If you buy a family annual policy check to see if it covers individual travel. For example Direct Line's annual policy covers children on school/scout/exchange trips so there is no need to buy separate cover and similarly the parents are also covered should they wish to travel independently.
6. Choose an insurance company which individually tailors premiums according to the number of people travelling. This way single parent families are not penalised by having to buy a standard family policy.
7. Be sure to check the terms, limits, excesses and exclusions of any travel insurance policy you consider. A high excess might make you think twice before claiming.
8. Look out for clauses which exclude 'pre-existing' medical conditions. This is especially important if you or a member of your family suffers from a particular health complaint and the condition takes a turn for the worse while you are on holiday.
9. Always check the details concerning the level of medical cover your policy will provide. In some countries, the cost of medical treatment can be exceptionally high. The Department of Health urges travellers to "carry a very high level of cover" when visiting the United States, for example. Direct Line provides up to £5 million medical cover per person.
10. Choose an insurer who will charge you on a daily basis i.e. some travel insurers only offer cover in weekly bands e.g. one week, two weeks, so if you are going on a ten day holiday you may end up paying more than you need to.
11. Opt for an insurer who offers a legal protection service. This entitles holidaymakers with legal costs up to £25,000 to pursue a claim in the event of a valid holiday contractual dispute e.g. misleading brochure descriptions, poor hygiene standards etc. This is in addition to the personal liability cover found under most travel policies.