If you’re planning a trip soon, you might be looking into trip insurance options. There are many ways to get coverage but how do you know which one’s the best? If you’re setting up travel arrangements through an online travel agent you might be tempted to buy trip insurance through them. Before you take that route, though, here’s a look at what you can expect.
What is an Online Travel Agent?
Simply put, an online travel agency (OTA) is a web-based marketplace or travel supplier where consumers can research and book travel products and services. When you book your hotels or flights through these sites they may offer you trip insurance or other trip protections for an extra cost.
Should You Buy Trip Insurance Offered by an OTA?
Before you spend extra money on trip insurance offered by an OTA, there are a few things to consider:
OTAS are not Insurance experts. While OTAs certainly make it easier to coordinate and book travel and lodging accommodations, travel insurance isn’t their area of expertise. Very few will have licensed travel insurance experts on hand to answer questions, they’ll have few plans, and the plans they do have are often not backed by legitimate underwriters.
OTAs earn money when they sell travel protection plans. This can be problematic because they may promote only those plans that earn them the most. The monetary rewards for selling travel protection products creates bias, which may mean that the customer is not getting the best level of protection.
Plans offered by OTAs may not include medical coverage. When you buy trip insurance through an OTA, the benefits may involve only trip cancellations and luggage issues. If you’re traveling domestically and relying on your health insurance, this may not be much of an issue. However, it becomes more concerning when you embark on an international trip. Your domestic healthcare will not cover you while traveling abroad. Trip protections offered by OTAs won’t usually include any medical insurance. Travel insurance companies, on the other hand, may include medical coverage up to $500,000 for urgent care needed while abroad in addition to coverage for trip-related expenses like cancellations, lost luggage, or missed connections.
OTA plan coverage may be unreliable. As the trip insurance offered by OTAs is generally limited in scope of coverage, the plans may not be highly rated by AM Best. AM Best is an independent agency that evaluates the quality of a particular travel insurance plan and grades it accordingly. Conversely, if you go through a travel insurance company or a travel insurance marketplace you’ll find most plans have an AM Best Rating of A or higher. This means that the policyholder can reasonably expect to trust the coverage and benefits as outlined in the policy documents.
Trip Insurance through an OTA will likely not include a Free Look-Back Period. A free look-back period is a duration of time in which the customer can review their trip insurance policy and make certain it is right for their needs. If, within that time frame, generally 10-15 days from the date of purchase, they want to make changes to their policy or even cancel it, they can do so free of charge. When you buy insurance through an OTA, there’s no such failsafe. As soon as you purchase it, you can’t make changes or cancel it.
OTAs usually don’t have Cancel For Any Reason coverage. One of the things trip insurance and trip protections through an OTA have in common is that they both offer trip cancellation coverage for certain covered reasons, like inclement weather or death of a loved one. But only trip insurance allows travelers to add extra cancellation coverage called Cancel For Any Reason or CFAR. CFAR allows you to cancel your trip for literally any reason and still recoup certain prepaid travel expenses.
Trip Protections through OTAs do not include independent travel arrangements. When you buy trip protections through an OTA, coverage pertains to only those services and products bought from the OTA. For example if you book your flight and hotel through an OTA, trip protections will extend to your flight and hotel but nothing else. So, if you’ll also be taking a train, staying in an AirBnB, or renting a car, these things wouldn’t be covered. Trip insurance, however, would cover travel expenses you include when calculating your trip cost.
Tips for Avoiding Trip Insurance Scams
Research Your Trip Insurance Options. When you’re in the middle of coordinating all the logistics of your trip, it can be tempting to add on trip protections from the OTA that you’re purchasing a travel service from. However, don’t let the convenience factor sway you from thoroughly researching your options. While most OTAs are not out to scam customers, there may be a few bad actors in the industry, and they’ll make it very easy to purchase plans that may not offer you much protection. Trip insurance comparison sites like VisitorsCoverage are a good place to start your research.
Be wary of trip insurance “deals.” Trip insurance is a state-regulated industry. This means that price standards are fixed across the state. So when you see trip insurance offered for a discount, it may signal a scam.
Read the policy documents carefully. Untrustworthy trip insurance plans rely on the fact that many customers will not read the policy fine print and if they do, the coverage limits and eligibility requirements may be clouded by insurance jargon that the layperson may not understand. So it’s important to read the policy details and reach out to an insurance expert if you do not understand the ins and outs of the plans.
Whether you go through an online travel agent for your trip insurance or purchase through a trip insurance comparison site like VisitorsCoverage, the key is to make sure the policy is right for you. If you have any questions regarding trip insurance you can always reach out to our Customer Success Team for assistance.