Two European airlines have been fined for their mis-leading practices in the sales of travel insurance.
Ryanair and easyJet, of Ireland and England respectively, have been fined a total of 1,000,000 Euro by an Italian regulator. They claim that both airlines had unfair practices in the sales of travel insurance, including ‘opt-out’ sales and not providing information about the policies being sold.
“Opt in” travel insurance should be used cautiously
We have written about opt-in travel insurance before, which is an up-selling technique that many booking sites use. As you work through your purchase, you are presented with a very simple way to click a box and buy insurance. The plan is usually a low flat rate, and the total effort is clicking a box and the premium is added to your total.
This is obviously a very easy (and profitable) way to sell travel insurance because there is little effort required. It shows a low price, a check box, and a headline such as “Protect Your Trip With Insurance”. But most travelers who buy this way are not actually reading their policy and understanding what they are buying. The coverage is assumed, and if they need to file a claim there is often a misunderstanding about what is covered.
The other practice we have written about is ‘opt-out’ travel insurance, which is even more dangerous.
In this case, the check box is already selected, and if you don’t uncheck it (opt out) you are buying the plan. The Department of Transportation has made this illegal since 2012, and rightly so.
The best way is to buy separately from a 3rd party
I recommend researching and buying travel insurance from a 3rd party.
This separates the purchase and allows you time to fully understand what you are buying. You will have a better selection of plans, and often get better pricing due to this competitive selection.
Sometimes what you are buying is not actually travel insurance, but another concept called ‘travel protection’. This type of purchase is totally different from insurance, and should be avoided as well.
Chika Adams says
I called Travel Guard for an advice (drive home or stay over night to catch 24-hr later flight) as soon as we knew our flight got cancelled at SFO in June 2014. Insurance rep asked the reason why it got cancelled. We were told by United it’s due to Air Traffic Control (runway construction?) She immediately said “we don’t cover any ATC issues.”
I am reading a lot regarding ATC related travel cancellation/interruption/delay lately. Surprisingly, many insurances try to claim cases as ATC related, even weather issue (due to bad weather ATC gave no-go to airline.)
Can someone please explain about the insurance loophole regarding ATC? If “Air Traffic Exemption” is actually existing, it would be a big headache to many travelers.
Larry Baier says
Save your money, or burn it…but don’t buy insurance from Travel Guard (member of AIG) and save yourself the frustration. Booked a flight in early December 2013, insured by Travel Guard. On the morning of our flight January 7, 2014 I received a call that my mother was gravely ill. She dies a week later on January 13. I sent a copy of the death certificate and an explanation to Travel Guard. Claim denied because the death occurred after the date of the trip. Seriously?
Mary Ann says
Rip off! We purchased airline insurance knowing we may need to change our flight (our bad for not reading the microscopic “fine” print). When we called to file a claim, imagine our surprise when we were told that we could not change a ticket for “personal reasons.” Pardon my ignorance, but why else would one need to change a flight itinerary? PLEASE do not throw away $30.00 to purchase this very lucrative (for the insurance company) scam. We paid good money for this believing we could do what the flashy advertising told us we could do – change our flight without penalty!
This post is the beginning of an all out massive online campaign to discourage others from buying this so-called insurance. Not insurance at all – a total hoax! Please do not fall for it!
Mary Ann says
Ditto. We are going to, and I would encourage those who have been burned by Allianz to set out on a word-of-mouth (or word-of-social media) to let our friends now to avoid this like the plague.
Robert Wayne Lewis (dot com) says
I’ve always wondered about buying insurance from the company who provides the service–it always seems like it’s obvious that they’d take the company’s side in the event of a dispute, not mine. So I think your advice to use a third-party company is great.
Andrew Woronowicz says
Thanks for your blog.
I have recently fell a victime of easy jet insurance practice.The insurance was sold promissing no hassel cancellation refund. My wife fell ill ,and I had to cancel the flight.
It took me one hour to fill papers, send passport copies and other “crap” .
They refunded only 103 euros of 177 paid stating that they do not reinbourse some easy jet charges and insurance fees.SO THINK TWICE BEFORE YOU GET IT>ANDREW
Mary Ann says
Ditto, Andrew. We experienced a similar situation. We gave away $26.50 to make Allianz execs rich. We are going to make sure as many people as we can reach are aware of this scam.