The insurance regulators for two of the U.S.’s major vacation rental markets – California and Florida – have issued statements against using opt-out sales practices to sell travel insurance.
Within the past couple of months, both the Florida Office of Insurance Regulation and the California Department of Insurance issued statements stating that online travel agencies that sell travel insurance by using opt-out methods are in violation of state law.
In Florida, this practice violates the state’s Unfair Insurance Trade Practices Act. It advises that the practice of automatically charging consumers for ancillary travel insurance – unless consumer takes action to decline coverage – does not comply with the state’s requirement of “informed consent”.
A similar statement was issued in California regarding “opt-out” sales practices to sell travel insurance. The department also noted that the California Insurance Commissioner can enforce pre-sale travel insurance disclosure requirements by imposing fines and suspending or revoking the license of any limited lines travel insurance agent.
Purchasing travel or trip insurance is often recommended, especially for expensive trips, but isn’t a requirement.
If you are purchasing your trip through a booking site, travel insurance is often available. While purchasing insurance at this time may seem convenient and hassle-free, this type of insurance isn’t necessarily the best option for you. In fact, many insurance experts recommend purchasing travel insurance through a specialist agency who can construct the best policy for your needs.
However, booking sites still include the option to purchase travel insurance. Until recently, many of these sites, would offer “opt out” travel insurance. This feature meant that insurance (selected by the booking site) was included in your package unless you specifically checked or unchecked a box during the purchasing process.
As you may suspect, many individuals missed this option and ended up buying travel insurance that they either didn’t want or need.
To help stop this practice, the Department of Transportation rewrote the rules regarding full fare disclosure that ultimately banned “opt out” provisions in any travel-related advertisement. As of September 2012, the practice of “opt out” insurance has been illegal for booking sites or other travel companies such as airlines.
Unfortunately, just because the practice was made illegal does not mean travel services providers stopped doing it. As a precautionary measure, it is recommended to carefully go through all booking forms to make sure you are not signing up for anything you don’t want – including email newsletter, extra baggage charges and insurance.
It is also important to remember where the booking site is based out of, as overseas providers don’t have to follow the same rules and regulations.
Insurance offered through booking sties may satisfy your insurance needs – or they may not. In many cases, the insurance offered through bookings sites are either overpriced, offer less coverage or a combination of both.
As like any other type of insurance, travel insurance should be carefully selected. Individuals should take into account their destination, age, health, activities they may partake it and duration of trip. Once you take all of these factors into account, you may realize that checking a box for standardized insurance isn’t the best option for your needs.