The travel insurance policy offered by your travel agent may fall short in these 5 ways.
Many Singaporeans don’t think twice about travel insurance, when booking through an agent. We tend to assume that “everything is taken care of”, and we just need to accept whatever policy the agent says to sign for.
Savvy travellers, however, will prefer to buy their own travel insurance policies; and here’s why.
What’s the Difference When You Buy from Travel Agents?
You’ll often be told it’s cheaper, or more convenient, to get the travel policy that the agent recommends. However, this makes several unfounded assumptions. There are some differences when you buy via the travel agent, such as:
- The policy may not be in your best interest
- Independent travel arrangements may not be covered
- Your options are more limited
- Legal complications when the policy is wrongly represented
- You can probably find a cheaper deal with free comparison tools
The Policy May Not be in Your Best Interest
Most travel agents are paid a commission for selling you travel insurance. Some insurers may pay out a higher commission than others, thus prompting the agent to “push” that policy over the others.
However, the policy that has the highest commission for them may not be the best for you. For example, consider pre-existing conditions: if you have suffered a heart attack before, then travel insurance usually won’t cover you for it.
In fact, the only travel policy in Singapore that covers you for pre-existing conditions, at the time of writing, is NTUC Pre-X Travel Insurance.
But even if the travel agent knows you have such pre-existing conditions, they may not be inclined to sell you this policy. They might push you to buy another policy that gives them a better pay out.
For that reason, it’s better to compare travel insurance policies yourself, so you can find one that’s tailored to your needs.
Independent Travel Arrangements May Not be Covered
It’s best to have some flexibility in your trip. For example, you may want to extend your stay by a few days on your own, after the packaged tour ends. Or you may decide to head back early, due to an emergency at home.
If you bought your own travel insurance, you’ll be covered even with your alternative flight arrangements. If you bought a policy from the agent however, this isn’t always guaranteed,
Some travel insurance policies are specific to the agent’s arrangements. That is, the insurance may only apply if you use the exact flights and timings set by the agent. Any deviation from the agent’s plan might leave you totally unprotected.
Your Options Are More Limited
Most travel agents only work with a select group of insurers. Even when they present you with different policies, it’s a limited number; these only comes from the insurance companies that work with your agent.
As you can’t compare with the wider market, you could be missing out on better coverage, higher payouts for delays and cancellations, or simple perks like free airport lounge access.
The more you can compare, the better your chances of finding a good deal. Don’t restrict yourself to your agent’s pool of insurers.
Legal Complications Could Arise From Misrepresentation
Say the agent tells you the policy pays out S$50,000 for medical evacuation. Due to some bad luck, you actually are required to be medically evacuated during the trip (e.g. brought from a ski lodge to the nearest hospital by air).
Later, you find out the bill for the evacuation is S$30,000 – but the insurance policy, despite what the agent claimed, only pays out S$15,000. This leaves you having to pay the remainder.
What can you do next? In such a situation, you probably cannot fault or sue the insurer – it was the agent who misrepresented their policy. But even if you want to take legal action against the agent, the tremendous amount of time and effort involved, as well as the legal fees, may give you pause.
It’s safer to be in direct contact with an insurer, whom you pick yourself.
You Can Probably Find a Cheaper Deal with Free Comparison Tools
Two policies can offer the same payout and coverage, but have significantly different prices. If you use free comparison tools, you can compare rates between all the top insurers. That ensures you can get the best coverage and payouts, at a better price.
You can now compare Travel Insurance on SingSaver! Find the best deals and save money when you buy travel insurance policies for you and your loved ones. Check it out!
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By Ryan Ong
Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.