(Inews.co.uk) - Older travellers could be paying more for their travel insurance than their flights, new research has revealed.
The average price of an annual travel insurance policy increased by around 50 per cent between August 2019 and August 2020 for both European and global cover, according to data from Which?.
This is likely due to insurers needing to add extra medical cover for holidaymakers after the pandemic.
Which? compared quotes from eight major insurers for 11 hypothetical customers, ranging from a young and healthy traveller buying a single-trip policy to France to an older tourist with health issues buying an annual global insurance policy that includes additional cruise cover.
It found premium prices varied dramatically with an elderly traveller with pre-existing health conditions, for example, quoted £451 for a policy covering a single two-week trip to the US – more than the cost of some long haul flights.
In another case, the difference between the cheapest and most expensive quote for the same scenario was as much as £249.
Across all 11 possibilities, the most expensive quote Which? received was, on average, more than double the price of the cheapest.
In six of the 11 scenarios, the most expensive quote was among the least comprehensive, leaving consumers paying significantly more for much less protection.
For example, for a 60-year-old with high blood pressure and cholesterol taking out an annual global policy, including cruise cover, the cheapest quote was £169 for AA’s Silver policy, while the most expensive was £355 for Direct Travel’s Standard cover.
How do insurers choose how much to charge?
Travel insurers charge consumers based on how likely they think it is they’ll end up paying you for a claim.
All insurers base that assessment on the same basic criteria, including age, health and destination but with vastly different results.
The high cost of healthcare means insurers deem the US to be a higher-risk destination than the EU, for example.
However, personal details like age and health aren’t the only factors affecting what you pay.
There are other considerations the insurer might be weighing up behind the scenes, such as how many claims it has recently had to pay out for similar trips.
The Association of British Insurers said: “Pricing decisions are a commercial decision for insurers and will depend on a variety of factors including their appetite for risk and operational costs.”
How can customers save on insurance?
Customers looking to travel abroad are advised to buy travel insurance as soon as they book their trip.
To find the best possible deal, they are advised to shop around to avoid paying over the odds.
Holidaymakers can use price comparison sites to see which provider is offering the best option.
However, travellers are encouraged to read through policies carefully before buying to ensure they have enough cover for what they will need.
This includes making sure they have sufficient cover for the medical, cancellation and Covid parts of their policy.
Most travel insurance policies will cover travellers for Covid-related medical expenses or if they have to cancel their holiday due to testing positive before travelling.
However, other aspects of Covid cover will vary. For example, some insurers will provide cover if a tourist is denied boarding on the way to the destination but it’s unlikely they will find cover if denied boarding while making their way home.
By Grace Gausden
February 14, 2022
