Is it safe to buy travel insurance online? Well, the answer is that is yes, with a caveat that you do some basic due diligence before purchasing. In fact you can expect to make significant savings buying travel insurance online.
Travel insurance falls under the General Insurance category, and companies selling general insurance in Australia need to have Australian financial services (AFS) licence which is administered by the Australian Securities and Investment Commission (ASIC), which affords the consumer some level of protection against fraudulent or misleading activities. However, often the company actually selling you the insurance is not the main insurer but rather an approved representative of a licenced insurance company. This is fine and also common, but if a representative company does not have an AFS license then they cannot provide advice or guidance to you on a financial product such as insurance, other than general non-specific advice. This is fine in most instances the representative is only selling an existing product from a licensed insurer. But if you need specific advice, or have a non-standard consideration for your travel insurance, it’s best to deal directly with the licensed insurance company.
As with all internet purchases verify the web site you are intending by verifying that the website is run by a reputable company, which is easy enough to do through sites like Better Business Bureaus (Click here to check an Business or Company)
As mentioned above many companies selling insurance are just insurance resellers, in other words they are an approved representative of the insurance underwriter. The company underwriting the insurance policy should be identifiable, either on the travel insurance website, or in a key document such as the Product Disclosure Statement or on the Insurance Policy. Try to stick with travel insurance policies underwritten by a mainstream underwriter that you likely will have heard of.
Examples of underwriters for travel insurance with a major presence in the US market are:
This is just a real short list there are many other insurance underwriters and reinsurers in the US. Just be sure to check that the underwriter is reputable. This is easy enough to do using the National Association of Insurance Commissioners database. If the insurer exists in the NAIC database then you can access key information about insurance companies, including closed insurance complaints, licensing information and key financial data. (Click Here to check an Insurance Company)
Important aspects of travel insurance policies were covered in The Midlife Man article “Travel Insurance Policies - What to Look For” , suggest you check it out if you have not read it. Many of these important considerations will automatically be covered in the online application process, such as age, destination, travel duration, high risk activity sports. The application process should also typically prompt you for variable components, such as excess, amount of coverage required for valuables and baggage etc. If not, be sure to read the policy Terms and Conditions or Product Disclosure Statement to understand what is included/exclude and amount of coverage for each line item.
Unfortunately with insurance policies of any kind you never really know how good an insurance company is until you need to make a claim. And in many instances it is not the fault of the insurer, often disputes are caused by policy takers not reading the policy to fully understand what is covered and what is not. Be sure to do your own due diligence and you will be fine
There are plenty of travel insurance comparison sites on the web, be sure to check the above issues before choosing a policy.
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