5 reasons why free travel insurance may not be sufficient

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:

1. If the tour agent is selling the insurance, it may not be in your interests

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 (see point 2).

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).

You can quickly compare between hundreds of travel insurance policies for free, on GoBear.com.

2. The coverage may not be clear to you

Some travel insurance policies, such as TravelProtect 360 by HL Assurance, provide unlimited coverage for medical evacuation. If you need to be flown back to Singapore for treatment, or a helicopter needs to rescue you from a mountain chasm (thus running up a bill that could come to tens of thousands of dollars), you won’t have to fork out a single cent.

On the other hand, some cheaper travel policies only provide a pay out 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 pay outs can vary significantly between each insurer. For example, American Express pays out up to $300 for lost cash, and up to $1,000 for losing your laptop (as well as passport and other important documents).

On the other hand, some policies don’t allow you to claim for lost cash at all, and pay outs for even big-ticket items – like your laptop – may 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.

3. If you buy through the agent, you might miss out on exclusive deals that you could get buying the insurance yourself

If you buy travel insurance from HL Assurance right now, you’ll get free access to the Changi airport lounge, and a wi-fi voucher. American Express policies give you up to $100 in Robinsons vouchers, and Allianz offers up to 40 per cent discounts with a promo code.

You can get these deals by applying through GoBear.com. If you get them via a travel agent, you might get the same policy at the same price, but minus the special rewards.

4. 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.

5. 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 (see point 2), 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, that you could find within minutes of using GoBear.com. Don’t just sign on the dotted line out of convenience – every dollar saved is a little more that can go toward your trip.

This article is kindly contributed by GoBear and is published on ZUU Online.

Choosing insurance and financial products was once a complicated and dull process. It was filled with tricks and different terms and conditions. Andre Hesselink didn’t think that was fair. He thought comparing insurance and financial products should be simple, straight forward and transparent. So, with the help of like-minded people, they solved this problem, leading us to GoBear.

(By Gobear)

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