Senator Markey releases new report that details questionable travel insurance marketing practices for policies that overpromise and under-deliver
Washington (August 21, 2018) – Senator Edward J. Markey (D-Mass.) today released a new report on his investigation into the travel insurance industry that reveals that air travelers are subject to heavy pressure to purchase travel insurance that offers minimal coverage despite extensive promises. After reviewing the websites of nine major airlines and seven frequently-visited online travel agencies (OTAs), Senator Markey found that travel insurance is being aggressively pushed onto customers, that offered travel insurance fails to provide promised coverage, and that the airline industry is exploiting travel insurance as an easy revenue generator. In his report “Flyer Beware: Is Travel Insurance Worth It?”, Senator Markey explains that some travel insurance policies are so deficient that if a traveler had postponed a trip due to the recent Zika virus scare in the Caribbean or the flu virus in the United States, the traveler would not have coverage.
Major findings of the report “Flyer Beware: Is Travel Insurance Worth It?” include:
Senator Markey also makes a series of recommendations as a result of his investigation, including calling on customers to know the risk against which they want to be insured and to carefully read the terms and conditions of any travel insurance policy before purchase. He also recommends that airlines return to charging fair prices for services such as ticket changes and cancellations, as well as to be more transparent in the sale of travel insurance policies.
“The only thing skimpier than airplane legroom are these travel insurance plans,” said Senator Markey. “Consumers are pressured to buy plans that promise extensive or even total coverage, but in reality offer very little, leaving them without the security they thought they bought and oftentimes without their money. These plans are just another way for airlines to charge passengers more to get less. It is time the airlines return to fair ticket pricing so that travelers don’t feel pressured to buy these travel insurance plans to cover outrageous fees.”
A copy of Senator Markey’s report “Flyer Beware: Is Travel Insurance Worth It?” can be found HERE.
Senator Markey’s investigation collected and evaluated information for major airlines Alaska, American, Delta, Frontier, JetBlue, Southwest, Spirit, Sun Country, and United Airlines, as well as online travel insurance agencies CheapOAir, Cheaptickets, Expedia, Hotwire, Orbitz, Priceline, and Travelocity.
Of the 15 airlines and companies that sell travel insurance on their websites, twelve contract sale of policies through just two insurance providers, AIG Travel Guard and Allianz Global Assistance. Because none of the airlines contacted by Senator Markey’s office was willing to disclose details of its financial relationships with AIG or Allianz, Senators Markey also is querying the companies to learn more about the financial arrangements they have with the airlines and online travel agencies.
A copy of the letters to AIG and Allianz can be found HERE.
Last year, Senators Markey and Blumenthal reintroduced the Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act, legislation that prohibits airlines from imposing fees, including cancellation, change and bag fees, that are not reasonable and proportional to the costs of the services provided. In fall of 2017, Senator Roger Wicker (R-Miss.) joined the two Senators in introducing the FAIR Fees amendment, which was included in the Senate Federal Aviation Administration (FAA) reauthorization bill. As modified, the Senators’ provision would ensure that change and cancellation fees are reasonable. It would also direct the FAA to establish standards for assessing whether baggage, seat selection, same day change, and other fees are reasonable and proportional to the costs of the services provided.