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Why You Should Think Twice before Buying Insurance from an Airline

Grace Lower | Oct 24, 2019

An-airplane-at-an-airport

If you’ve ever purchased plane tickets online, chances are you've seen it. At the bottom of the check-out page sits a little box with a tempting offer: purchase travel insurance now, and you could save money down the road!

Unlike other benefits offered at check-out, passengers are usually required to make an active choice before moving on with their purchase. Either click the yes button to protect their investment or click a sternly worded no button and “risk their trip.

Although travel insurance should ideally reduce a passenger’s stress, the plans offered by airlines are promoted in a way that’s pushy at best and misleading at worst. In fact, a recent series of reports, lawsuits, and media coverage has revealed that airline travel insurance offers don’t always prioritize the passenger’s best interest.

So what’s wrong with the travel insurance that’s offered with your flight purchase? And what’s a passenger to do if they want to protect their trip? It all comes down to a few basic issues.

A language of urgency

Haste makes waste” is an old saying, but in this case, it certainly rings true. Snap decisions can leave you with  insurance that isn’t right for you or your trip. 

Imagine you’ve spent weeks monitoring flights for your next big vacation. Once you spot a great deal on tickets, you’ve got to act fast. You log onto the airline’s website, pick your flights, fill out your details, and go to pay — only to be interrupted by a required insurance selection:

Option 1: click “Yes” to purchase insurance. The “Yes” option is pre-selected on your behalf, and it’s accompanied by cheerful messaging: “Peace of mind for your trip is only a click away!

Option 2: click “No” to decline the offer. This option is accompanied by strong language, such as: “No, I will travel without this insurance for my [full ticket cost] trip. I understand that I may be responsible for substantial cancellation fees and delay expenses.

Time is ticking, and you don’t have the energy to read through the details in that tiny “Terms and Conditions” link. You decide that clicking “Yes” is a quick and easy way to protect your trip. 

In reality, it’s best to ignore the urgent airline messaging, decline their default insurance offer, and shop around for the right kind of coverage. Purchasing travel insurance through a dedicated provider like Seven Corners will give you access to a range of options at a variety of price points. With a bit of research, you’ll ensure that you end up with quality coverage.

Higher costs, same old coverage

Airline-provided travel insurance isn’t always the good it seems. In many cases, passengers have been stuck paying higher prices for coverage they could have purchased at a lower cost elsewhere.

Within the past several years, major airlines, including Jet Blue, Delta, and Alaska Airlines, have faced lawsuits for misleading insurance practices. In particular, these airlines have come under scrutiny for receiving kickbacks for each policy sold — and passing on the cost to the customer. 

According to a write-up from Top Class Actions, the suit against Alaska Airlines claims that “unbeknownst to the purchaser, the price of the travel insurance product is materially increased to fund the payment of an undisclosed commission, or kickback, to Alaska.” Similar lawsuits against airlines claim these kinds of kickbacks from insurance providers to the airlines aren’t legal, since the airlines are not providing any insurance-related benefit in return. 

The danger of convenience

Purchasing travel insurance can seem like an intimidating process, especially given the number of companies and plans that are available. Simply checking a box seems like an easy way to secure coverage, but that convenience comes at a cost.

In 2018, U.S. Senator Edward Markey and his office released a report outlining the “questionable travel insurance marketing practices” of airlines and online travel agencies. According to the report, only two travel insurance companies (AIG and Allianz) provide 87 percent of the policies offered via airlines and online travel agencies. That means that a traveler’s options are significantly limited when they purchase coverage through an airline.

What’s more, the airlines reviewed by Senator Markey’s office offered no option for customers to customize their insurance policies. In other words, travelers had no way to select coverage based on their preferences or budget. It was also found that airline insurance doesn’t measure up to the competition. 

Markey’s report ends with an acknowledgement that travel insurance can be a valuable addition to any trip. However, travelers should compare options from a variety of insurance providers to find the plan that’s best for them.

Leave it to the pros!

When it comes to securing travel insurance for your vacation, you shouldn’t leave your coverage up to your airline. Purchasing a plan directly from a reputable travel insurance company is the best way to cut costs and get the coverage that’s best for you.

Insurance companies can offer resources and support to make your insurance buying process hassle-free. For example, with a visit to Seven Corners’ website, you can fill out a quick quote for a recommended insurance plan. Unlike what you’d get from an airline, Seven Corners offers a convenient breakdown of your recommended plan’s benefits, and you can scale your coverage up or down to meet your travel needs.

With a comprehensive plan like Seven Corners’ RoundTrip Elite coverage, you have access to a wider range of benefits than you might receive through an airline. Consider the benefits offered by Delta’s recommended insurance versus Seven Corners’ RoundTrip Elite:

For an $870 roundtrip flight from Philadelphia to London, Delta’s recommended travel insurance includes a number of benefits:

  • Trip Cancellation: Up to 100% of trip cost ($10,000 max)
  • Trip Interruption: Up to 100% of trip cost ($10,000 max.)
  • Emergency Medical/Dental: Up to $20,000 ($500 Dental Coverage max.)

Emergency Transportation Coverage: Up to $30,000

  • Travel Delay Coverage: Up to $300 for a delay of 6 hours or more (subject to daily limit)
  • Baggage Loss/Delay: Up to $300 for loss and up to $200 for delay

The same trip could be covered by Seven Corners’ RoundTrip Elite plan, which includes the following benefits at a comparable cost:

  • Trip Cancellation: Up to $30,000
  • Trip Interruption: Up to 150% of trip cost
  • Emergency Medical/Dental: Up to $250,000 ($750 Dental Coverage max.)
  • Emergency Medical Evacuation: Up to $1,000,000
  • Trip Delay Coverage: Up to $1,500 for a delay of 6 hours or more (subject to daily limit)
  • Baggage Loss/Delay: Up to $2,500 for loss and up to $600 for delay

When you purchase your insurance from Seven Corners, you’ll also have the ability to add extras, like Cancel for Any Reason or Car Rental Insurance. And if you get stuck, you can contact an award-winning customer service team for support. 

You might be wondering if you really need a comprehensive insurance plan for your next big trip. Imagine you’ve booked a multi-stop tour through Europe. A bout of severe storms creates a major delay, and you miss your connecting flight. What’s more, one of your checked bags was delayed by 14 hours. When you arrive in Europe, you only have what’s in your carry-on.

With your airline’s travel insurance, this travel headache is made only marginally better. Your Travel Delay insurance only covers $150 per day — which doesn’t go far in reimbursing your accommodations, meals, and nonrefundable costs from the first day of your tour. Plus, your Baggage Delay coverage doesn’t apply, since the delay was less than 24 hours. 

On the other hand, with Seven Corners Roundtrip Elite, you are entitled to up to $300 per day to cover the costs of your delay. You also have Missed Connection coverage of up to $1,500, which pays for additional transportation costs to help you catch up to your tour. As for your bags, you are eligible for up to $600 to help cover the costs of your essentials while you wait, if your delay is more than 12 hours. 

Travel is full of unexpected twists and turns. Why leave your insurance coverage up to your airline? Buying directly from an insurance provider like Seven Corners is the best way to get the coverage you need at a price that makes sense. All that’s left is for you to sit back, relax, and enjoy your flight

It just goes to show that buying direct can pay off!

 

    Guest contributor: Grace Lower

About the Author

Grace Lower has a love for all things writing and travel. When she's not exploring new places, Grace enjoys teaching English as a Second Language, making terrible puns, and running incredibly long distances at incredibly slow speeds.

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