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Consumers looking for travel insurance often go to a comparison site in order to find a good deal on holiday cover. But how is it possible for insurance providers to offer policies for a lower price on a comparison site than on their own website? In order to keep prices low on comparison sites, insurers may tweak product features and details to keep them economically viable.
- How Much Can You Save with a Comparison Site?
- How Much More Cancellation and Baggage Cover do you get when Buying Direct?
- How do Trip Lengths Differ When Buying Direct?
- Is the Upper Age Limit Different on Comparison Sites?
- How Much Higher is the Travel Insurance Excess on Comparison Sites?
In this article we'll try to explain some of the common differences between plans offered from comparison sites and those bought direct from insurance providers websites, such as cover limits, trip lengths, upper age limits and excess amounts. While the product differences vary by insurance provider, hopefully these observations will help you to understand whether buying direct or from a comparison site is best for you.
How much cheaper are policies bought on a comparison site, anyway? Prices of Annual, Multi-trip travel insurance are typically 40% to 50% lower at a comparison site than from an insurance provider's website, translating into savings of £21, £24 or £26 for policies covering travel to Europe, Worldwide excluding USA, Canada and the Caribbean, or Worldwide, respectively. Significant price savings is one of the reasons many people search for travel cover using a comparison website.
|Average Cost of Annual, Multi-trip Travel Cover||Comparison Site||Direct from Insurer|
|Worldwide excl. USA, CAN, and Carib.||£32||£56|
In order to compensate for lower prices, you typically get less cover on comparison site plans—on average, we found 20% and 30% less cover for Baggage and Cancellation, respectively, on policies bought from a comparison site than policies available direct from an insurer's website. (Emergency Medical—another main category of cover—is generally quite similar regardless of where you buy, but is hard to quantify accurately due to the "Unlimited" cover offered by some plans.)
|Average Cover Limits||Comparison Site||Direct from Insurer|
|Emergency Medical||£14 million||£12 million^|
^ The average Emergency Medical cover for direct plans is understated, because a few direct plans offer "Unlimited" Emergency Medical cover which cannot be reflected in an average calculation but would serve to increase the result above £12 million of cover.
Maximum trip lengths are commonly shorter on policies available from comparison sites than policies bought direct from an insurance provider. Why is this? Shorter trips are likely to cost insurers less in terms of claims, enabling the comparison site plans with shorter trip lengths to be sold for lower premiums.
There are two reasons that longer trips have the potential to be more costly for insurers. First, more days spent abroad simply translate into higher odds that you'll fall ill or be injured while abroad, necessitating an Emergency Medical claim. Second, a longer trip typically involves more pre-booked accommodation or transport costs, which are more costly for an insurer should a Cancellation claim arise. Consequently, reducing the maximum trip length on policies from comparison sites is a way to charge a lower premium.
The upper age limit for any given insurance provider's travel policies is generally 5 to 10 years lower on comparison site plans, versus plans available direct from a provider's website. Younger travellers typically won't be affected, but those over the age of 65 or 70 may find fewer plans on offer from a comparison site.
How does this affect pricing? By restricting comparison site plans to slightly younger travellers, the insurance providers reduce the overall probability of age-related emergency health illness claims. As a result, they're able to offer policies on comparison sites for a lower price point.
The excess on comparison site policies is typically higher than on direct policies—twice as high, in fact. A higher excess means policy holders contribute more towards any claims that arise, reducing the burden on insurers. As a result of the higher excess, insurers are able to offer policies for a lower price on comparison sites.
Finally, you may notice in the small print that some "extras" like Scheduled Airline Failure or Mugging may not be included on a comparison site plan, where it is covered on a direct plan. This is not always the case, however. It's good to check through policy wordings before you buy, however, to make sure that you're getting cover for any categories that are particularly important to you.
Should you buy direct or buy from a comparison site? There is no right answer. Those who want to pay less for their cover and are perfectly happy with the cover limits may prefer the policies on offer from a comparison site. On the other hand, those after certain features or who need higher limits might be more likely to find suitable cover direct from an insurance provider's site.