Last updated: December 28, 2014



Avoid tripping up on insurance trap

discount air travel

Make your money fly further with the right travel insurance cover. Source: National Features

AUSSIES holidaying offshore are paying up to four times more than necessary for their travel insurance.

A mystery shopping study by financial comparison website has found consumers who fail to shop around often pay for cover they don't need and get slugged hefty commissions.

Mozo director Kirsty Lamont says buying insurance through airlines and travel agents is generally the most expensive, with Qantas adding a 53 per cent commission to policies.

"The price differences really are staggering - travellers are paying up to four times too much for their insurance," Lamont says.

"The difference between prices can be as much as $579."

Mozo studied prices for a family trip to the US, a couple visiting Europe and a backpacker heading to Asia. It set a minimum level of cover required with a $100 excess.

"Some are selling Rolls-Royce policies that you may not need. For example, $30,000 of personal effects cover when for most of us $10,000 would be ample," Lamont says.

"You are paying for cover you just don't need.

"The message is to shop around. Don't treat it as an afterthought."

Lamont says she has never heard of a smaller, cheaper insurance provider being unable to pay out on a claim.

"A lot of them are underwritten by bigger insurers but they operate these low-cost online brands," she says.

Of 7.8 million Australians who went overseas last year, an estimated 30 per cent left home without travel insurance.

Consumer group Choice recently examined 21 travel insurance brands and found a wide variety in policy costs.

"There can be high commissions and you can avoid those by buying directly," Choice spokeswoman Ingrid Just says.

"If you are going to use a travel agent it's better to negotiate with them - they may give you a discount.

"Some credit card providers offer complementary travel insurance to cardholders.

"It's generally pretty basic cover so have a look at what might be covered."