December 22, 2010 - 70% of travel insurance policies deemed worthless - Consumers duped by price comparison websites warns Essential Travel 70% of travel insurance policies deemed worthless
Guerilla marketing by price comparison websites has conditioned UK consumers to believe they save money by searching the entire market to find the cheapest prices. Leading travel essentials provider EssentialTravel.co.uk warns holiday makers this is not always the case and travellers should take care when searching for holiday insurance.
Stuart Bensusan explains “Companies on these so called ‘money saving’ websites are operating under several trading names, so whilst a top ten search gives consumers the impression that they are viewing a range of prices from ten different providers, in reality the ten insurance “brands” on display are actually owned by a small pool of three or four companies. In some cases it’s as few as two separate providers. Where’s the comparison in that?”
A quick search for the cheapest travel insurance policies on Go-Compare reveals its top ten policies are supplied by just two different companies and CompareTheMarket shows only three. This means if consumers were to purchase a policy from inside the top ten results on Go-Compare there is an eighty percent chance that they will have purchased a policy from the insurance provider Drakefield and a twenty percent chance they would have purchased a policy supplied by Citybond insurance.
On CompareTheMarket.com there is a sixty percent chance of purchasing a Rock Insurance policy and a thirty percent chance of purchasing a Blue Insurance policy.
Furthermore, the emphasis on price on comparison websites is leading holidaymakers to select the cheapest option rather than the insurance policy that best suits their needs.
“Insurers can only offer the exorbitantly low prices appearing on these sites by levying extremely high excesses on policies.” discloses Bensusan.
“Consumers aren’t always aware of the level of cover afforded by these cheaper policies; for example, whilst Moneysupermarket.com offers the lowest priced policy at £27, it has the highest excess at £300. A review of our recent claims showed 70% of them were for amounts totaling less than £300, which means that had those customers purchased this particular low cost policy they would have had to stump up the entire cost of the claim themselves. By spending just £28.35 more on their annual travel insurance policy, customers can reduce the excess to only £90 on items such as baggage, where claims tend to be for lower amounts.”
Bensusan concludes “Consumers need to be wary of websites claiming to offer an overview of prices across the whole market. The cheap policies displayed on these sites are inexpensive for a reason and don’t represent value for those that need to claim. We strongly urge holidaymakers to speak with a travel insurance expert rather than relying on misleading price comparison websites.”
Essential Travel was established in 2001 and EssentialTravel.co.uk is one of the UK's leading online travel essentials companies. The core products offered include competitively priced, fully comprehensive travel insurance; airport car parking; airport lounge access; airport hotels; car hire; and car hire excess insurance.
Source: Essential Travel