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MONEY COMMENT
Going Away? Don't Overpay!

By Cliff D'Arcy
March 30, 2004

Easter is almost upon us: Good Friday is a week on Friday (9 April) and Easter Monday is on the 12th. Many people celebrate the most important event in the Christian calendar by going away over the four-day weekend, with millions of us choosing to go abroad.

However, before you pack your suitcases and buy your holiday currency, stop to think about travel insurance for a moment. Although most of us put a great deal of thought into choosing our holidays even those last-minute bargains we do very little to avoid being ripped off when buying holiday cover.

We buy millions of travel insurance policies every year, but six out of ten of us buy them from travel agents and tour operators. This is a BIG mistake: independent market analyst Defaqto calculates that we'd save 250 million a year by shopping around for this cover!

After ranking over five hundred policies from 165 providers based on their price and cover, Defaqto produced a list of ten Best Buys last May. These policies are around a third of the price of those sold by major travel agencies. In the worst cases, some agents charge ten times as much for inferior cover!

Thanks to its fat profit margins, many travel agents employ high-pressure sales techniques to sell their own-brand travel cover - including refusing to take bookings unless customers buy it on the spot or provide proof of alternative cover! Sadly, many salespeople aren't worried about our health and wellbeing - they're only thinking of the fat commissions they earn from selling these policies! Agency staff are given demanding sales targets for travel cover, which helps to explain why travel agents and tour operators sold around 425 million of travel insurance last year.

I think this approach is scandalous you are not obliged to buy travel insurance from your travel agent or tour operator under any circumstances. If they try to pester you into buying their cover, turn it down flat and threaten to walk out this should warn them off!

It's important to note that you have a fourteen-day cooling-off period after buying a travel policy, so you can cancel an over-priced policy and replace it with a cheaper policy within a fortnight. However, don't be tempted to give in and buy the travel agent's policy, with the aim of replacing it later. What's more likely to happen is that, in all the excitement, you'll leave it too late or forget about it, and end up being lumbered with a duff policy!

Defaqto also warns holidaymakers that policies from high-street travel agents and big-name tour operators offer relatively poor levels of service, so these policies could leave you in the lurch, as well as costing an arm and a leg!

Finally, if you take more than two holidays a year, you may save money with an annual travel policy.

Check out these travel-related articles:

Whatever your plans over Easter, have a great break!

More: Track down bargain cover in our Insurance Centre.