District 7190 Conference of Clubs 
May 3-5 2019
Russell Hampton
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Nov 13, 2019
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Let The Buyer Beware

Let The Buyer Beware


Do travellers know what cover they’re getting – and not getting – for their euros, dollars and pounds? Insurers and industry bodies tell David Kernek that improving consumer awareness could cut dispute costs and brush up the sector’s reputation for fair play

One of the things the Romans did for us that wasn’t mentioned in Monty Python’s Life of Brian was provide astute advice to purchasers: Caveat emptor – Let the buyer beware. Based on the probability that the seller knows much more than the buyer about the product they are selling, it leaves the purchaser to accept the risk that the merchandise might not be flawless or everything the vendor claims it to be. It’s a conundrum that remains with us 2,000 years later, and nowhere more so than in a travel insurance market that often presents buyers with a T&C document that, at 37,000 words across 60 pages, can be twice as long as a Shakespeare play.


The scale of the consumer awareness problem was highlighted starkly in the findings of a Quantum Market Research survey commissioned by Australia’s Insurance Council (ICA) and the Australian Government’s Department of Foreign Affairs and Trade (DFAT) and published in July 2018. Researching the behaviours of Australians travelling to South-East Asia, it reported that:

  • 65 per cent engaged in risky activities, from excessive drinking and water sports to riding motorbikes and horses.
  • Of those with insurance, 58 per cent did not know for sure if their cover included motorbike and moped riding.
  • One in five travellers with pre-existing conditions had not checked to see if their insurance cover was adequate.
  • 52 per cent of insured travellers were not ‘very confident’ that they had chosen the best policy for their needs.
  • Of those whose destination had a ‘high degree’ travel warning on the DFAT’s Smartraveller website, only 39 per cent checked to see if their policy would cover them.

Kim Murchie, Co-Founder of Go Insurance in Australia, talked to ITIJ about a range of indicators that flag up low levels of consumer awareness. “The most obvious one is at point of claim. It usually manifests as disappointment or frustration expressed at the lack of policy response to the claim, when the response is limited by sub-limits or when elements of the claim fall outside the scope of cover provided. Unfortunately, some policyholders read the policy only at the time of making a claim or after they have had a claim denied. In such cases, although at the time of purchase they confirm having read, understood and agreed to the policy terms, they admit to not having done so.”


Murchie said her company also sees a lack of awareness at point of sale, but that in the initial phase of the customer journey they have the opportunity to explore the customer’s requirements, answer questions and explain the scope of cover provided. “Often we experience an increased volume of queries following events such as extreme weather and terrorism which might have been widely reported in mainstream media,” she said. “In such cases, we see spikes in consumer enquiries around how our policy might or might not respond to these types of events. These questions come from both prospective customers and existing policyholders, so in the case of the latter, this supports the notion that they either haven’t read the policy or have perhaps failed to understand it.”

Organising travel insurance is hardly the most exciting part of planning a holiday

She says that if a policy isn’t able to respond to claims involving urgent medical treatment overseas or repatriation, some customers turn to social media to vent their disappoint or set up crowdfunding initiatives, or both. “A lack of consumer awareness regarding standard travel insurance provisions is often evident in these forums, with the insurer being unjustly vilified for not honouring the claim. Lack of awareness can also be seen in the number and type of referrals to external dispute resolution forums. Disputes are increasing, and there is consistency in the type of disputes being referred – denial of claim due to pre-existing medical conditions, for example.”


She points to a number of reasons why consumers might not be aware of what they’re buying: “In some cases, there is general apathy towards reading insurance policies to assess the cover. Organising travel insurance is hardly the most exciting part of planning a holiday and some travellers just take the chance a policy will provide adequate cover. Some consumers consider all policies are more or less the same or don’t understand the specific risks which attach to their destination, health status or planned activities. Some just don’t appreciate what can go wrong and how they might be affected.” Others are intimidated by the size of an insurance policy and how it is worded, explained Murchie.


To read more of this excellent article from the International Health and Travel Institute Journal click here