Long-term travellers face different challenges when buying travel insurance. Most companies will only insure people for a round trip and for a set time period. This isn’t much good for multi-year travellers.

We recently interviewed Graham Kingaby, the insurance director for specialist travel insurance company World Nomads. Of course, he was all for buying insurance and he also had some interesting things to say about what to look out for in your policies. We followed that up with our thoughts on finding good travel insurance and some important questions to ask.

While we can’t afford to insure ourselves for our whole trip (approaching 3 years of full-time travel) we are careful to pick up insurance during “high-risk” times, such as long-haul flights and extensive overland journeys through areas with dodgy infrastructure.

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One in seven? Those are pretty high figures. I did rely on my EHIC card while travelling in Europe and figured that it’d be cheaper to buy a budget airline ticket if flights were even cancelled…maybe that has something to do with it as you suggested in the post.

There was recently a current affairs spot on TV here about young people (I think I still fit into that travel-style!) who bankrupted their parents because they ran into trouble overseas and had no insurance. It made me start thinking about it much more closely.

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Travel firms now have to be regulated to sell Travel Insurance. The Financial Services Authority (FSA) is warning UK travel firms that sell Connected Travel Insurance (CTI) that they should have authorisation before new regulation comes into force on 1st January 2009.

The change means consumers will no longer be able to buy insurance when they purchase a holiday unless their agent, tour operator or online retailer acts as the appointed representative of an insurer or insurance broker.

If they can’t offer it, make sure you get it elsewhere as soon as you book your holiday, if not before. Many are annual policies that are renewable.

It is always a a good idea to check your policy suits your own needs before you purchase. For instance, if you are self-employed or sadly if can’t travel due to a family medical complication (some exclude close family members and only those that are traveling), or if you fall pregnant and can’t travel 9 months after booking! I believe policies are worth reading before you click a box online to agree to purchase.

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I expect (I’m not sure) they will have to say they are an appointed representative of XYZ Insurance Company and give a registered number which has been given to them by the FSA this number can be checked on the FSA website at http://www.fsa.gov.uk.

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It would be interesting to hear from a travel agent in response to your assertion that they will not be advising customers to book travel insurance.

In addition can you explain why it is “costly” for travel agents?

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Cost? I really don’t know, not much I expect, about £1pound a policy. Maybe an agent could tell us. 30 mins of your time and phone costs plus admin work for a £1 pound commision?

@ “cost” – ABTA is concerned because not all their agents know about the change. There was a survey of 1,500 ABTA agents which suggests only one in five either do not understand the changes or have done nothing to prepare. Well that’s ABTA agents for you.

Holiday makers want everything cheap or cheaper than cheap. Many just rely on their credit card cover used to book with if it has a minimum travel insurance included, only then to find out to their cost of the policy exclusions when they need to claim. Read the small print.

Some travel websites will act as introducers and have a link which will take you to a FSA registered insurance company site. I would do that and then compare. Personally I have an Sainsbury policy and at the moment they are offering 10% online discount for new customers.

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You do not have to buy the travel agents or tour operators insurance, or the one they suggest, or recommend you purchase. Shop around, but get it as soon as you book.

I’m still not sure what the ABTA quote about cost means.

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This cost bit refers to the FSA requirement, that a travel agent should be as qualified to sell a travel insurance policy as someone who acts, say, as a full blown financial advisor. It’s an all or nothing scenario; additionally one would have to train all staff to such a standard – unless one works a la supermarket selling booze.

I do not know the exact figure per person, but when I Iooked into this it, it was a very siginificant amount – and ongoing. Now, agents are/were a bit hacked off with this as they have been flogging travel insurance since Thomas Cook was a boy and so did have some inkling about what it was all about.

In certain quarters, a while ago, the price of insurance was racked up (mainly by multiples) but many agents sold it at a margin of about 35 to 45% but some multiples were pushing 200%.

That said, the argument that it is sold at a rip off price is now so last century as all this changed many moons back. It was the only “financial” product agents sold (in the sense of financial services, so to speak).

There was a move, a few years ago, by ABTA to arrange certification through testing about key matters but this (why, I know not) proved not be enough for the FSA. Forgive my cynicism, but the FSA is not exactly the bees knees for financial protection given the pisspoor state that banking et al. have manged to get themselves into.

(Yeah, yeah, I know, not their fault, something unusual, wrong sort of money on the line, blah, blah. They were supposed to protect… and didn’t. Period) I digress, so back on topic. I remember doing the self cert. it was not rocket science and most of the questions were pure common sense.

The FSA, one could say, being an organ of the state, naturally decided that they could get a good screw from agents, er… I mean, needed to make sure the public were properly protected.

Why? Agents, as I say, had been selling travel insurance for a very long time and were, all told, very good at it and knew a lot about it. Many, er, issues came from the Public.

People on cheapo two week holidays in Benidorm who suddenly own two Cartier watches and a diamond tiara, people not telling about the triple bypass operation they had last week, or swearing blind that they did not know that Grandma, who had been at deaths’ door for some weeks, was going to fall off her perch.

You have never had to book your insurance with the agent that booked your holiday, never, ever. We were obliged to tell you that you had to do something about it, but what you did was your affair though an operator could refuse carriage if you could not show that you had done something about it.

Indeed, nowadays, it is more the Easyjets of this world that try to, shall we say, positively persuade you into buying their insurance than anyone else, with their “click to remove” and then (much) further down the page, making you click again (and certain other outfits adding it back on the q.t.)

So, Julia, it’s not “ABTA agents for you” it’s that they are hacked off about being told how to suck eggs. ABTA (and TTA etc) agents have to put up with a lot, mainly from egits who now expect to be able to get a first class round the world ticket for £1 and regard agents as a source simply for free advice.

Many agents are dedicated people (they have to be, given the flack they get) who get paid relatively small amounts to take an awful lot of responsibility and are expected to know everything from Australian’s needing transit visas for Slovakia to your not being able to take bicylcles on the 06:15 Manchester to Hull, let alone all international air schedules, to where you can get a cup of tea at 03:00 in a small remote Nepalese hillside village or the hotels at the better end of Palma Nova (is there one!!) off the top of their heads. So, back off, Julia.

In fine, agents find that it is too much both financially and in terms of general hassle for too little return to sell travel insurance… it’s much easier just to put a affiliate travel insurance link on one’s website.

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Murray, your tone is rather aggressive (@back off). We all can post our views without making personal attacks.

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@julia @murray and, of course, @darren

squabbling aside, i suspect consumers will unfortunately be none the wiser after reading this post, which is a shame.

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Darren

Simple put the cost to an average travel agent to join the FSA directly is just over 100% of what they make gross on selling a travel insurance policies. So yes they will pay for the privilege of selling insurance. A lot of agents have chosen to become an Introducer or an appointed agent for an insurance company. These means they are Hand out leaflets or like Tesco just take money.

The other thing as I already posted is the also effects Financial Failure Insurance as agents can not now sell these, which means more customers money unprotected. When asked for a comment the FSA said they did not realise this (after 5 years of investigations) also another comment was that % wise travel agents get less complaints than FSA members. So they had a very good case to bring us under the rules, we made them look bad.

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Accepted, but pray note that the origin of my ire was the remark about “That’s ABTA agents for you” which, as an ABTA agent, one also finds less than constructive. Such original remark seems to have escaped Darrens rebuke…. Sauce for the goose, as they say….

Nick, I am not too sure what you are on about! The point about the joining fee is good – I thought that it came out about that, bit like selling airline tickets, now that airlines want to charge agents for GDS bookings!! Not too sure I fully understand what you mean by the financial failure bit though. BUT No-one seems to able to answer – Why should there have been any need to include the sale of travel insurance under the FSA in the first place? Agents had a good and thorough understanding of the subject – more so than the FSA, it would appear and were well placed to advise on the subject and indeed, to work out if an application or claim needed to be signed in green ink. Interesting point – the largest ever claim for medical on a travel policy was around £250,000 (unless the record has been broken) so if you have 1 mill or 10 mill, its a bit academic. The crucial things for me are – 1. Adequate cancellation cover (cheaper policies may only cover a holiday cost of, say £300 a head, which does not go very far) 2. Adequate medical incl. repatriation (ever bearing in mind it is the insurance company (after taking professional advice), not you, that decides about repatriation) and 3. Airline failure (!) and, of course, a clear telephone number. I don’t worry too much about valuables, if you do own the crown jewels what are you doing with them in Malaga? Leave them locked in the safe….. In many cases really valuable stuff is often covered under home contents. Oh! And be really honest about any pre-exisiting medical conditions….

It may not be in the best interest of agents to advise clients financially but no-one works for nothing and if the client mis-interprets what is said, for want of a better expression, in this American “if something happens to me it must be someone else’s fault” culture the cost could be very high. The whole subject had been best left alone, it wasn’t broken (basically) and did not need fixing…….

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