Travel insurance benefits may not be worth it, says Senator

Travel insurance benefits - airport
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Senator Edward J. Markey from Massachusetts released a report casting doubt on the coverage.

Democrat Senator Edward J. Markey of Massachusetts issued a new report focusing on travel insurance benefits and whether or not they hold value. In it, he examined the travel insurance industry as a whole within the United States.

According to Senator Markey, travelers aren’t getting the coverage they think they are.

According to Markey’s report, travelers from the United States “get much less coverage…than they are led to believe.”

This conclusion was based on an investigation Markey’s office conducted into several major airlines across the country. The airlines included in this research included United Airlines, Southwest, Delta, American, JetBlue, Frontier, Alaska, Sun Country and Spirit. It also included an examination of online travel agency data from: Expedia, Orbitz, Hotwire, CheapOAir, Priceline, Cheaptickets and Travelocity.

The travel insurance benefits data collected regarding the airlines and online travel agency data spanned from March through May 2018.

The report looked into several components of travel insurance benefits and regulations in the industry.

Key points from the travel insurance policy report included:

• The online travel agency (OTA) and airline ticketing process places pressure on the consumer to buy travel insurance. Of the 16 total companies examined for this report, 15 prohibited travelers from purchasing their tickets online if they declined to purchase the recommended policy and did not already have travel insurance.
• OTA and airline websites sell only minimal coverage products referred to in the report as “barebones travel insurance plans.” Those policies exclude a long list of potential perils.
• OTA and airline websites consistently overstate the flexibility of their policies and use the fine print to make exclusions to coverage less obvious.
• The market is dominated by two travel insurers, which currently hold 87 percent of the OTA and airline website market: Allianz Global Assistance and AIG Travel Guard.

Travel insurance benefits - airportThe senator’s travel insurance benefits report concluded that travelers are being exploited as “an easy revenue generator.” Markey’s office went on to conduct an additional survey over the phone. It involved a subset of airlines. It determined that for every travel policy sold, the airlines receive a portion of the premium paid.

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