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Is Travel Insurance a Scam?

We see this question asked all the time, all over the internet. There is a genuine belief that travel insurance is some kind of scam, so we have decided to share some numbers.

We run a travel club with a few hundred members. Our most valued benefit is that all our members are on our group travel insurance policy.

This means that we have claims data on all our members. So today we finally took a look at 2 years worth of data and this is what we found out.

In terms of the number of claims

Sickness 30%
Bad/Heavy Weather 27%
Mechanical Breakdown 20%
Accident/ Accidental damage 10%
Loss / Theft 10%

To put that in perspective 40%  of all our claims by frequency of claims are for accident or sickness… but it will never happen to me right?

The majority of that 40% is sickness, which surprised me. We can imagine getting hit by a bus, but not getting sick. In reality we are far more likely to get sick.

47% or almost half of the claims by frequency were for delays or cancellations caused by bad weather or mechanical breakdown

What does this mean in terms of value?

OK so we went further let’s look at our biggest claims by category

Our biggest Claim by far was for sickness and cost US$12,982 we had another claim that was over US$5,500

The next biggest claims after sickness were for delays and cancellations. Our policy pays US$100 / hour for every 6 hours of delay and the biggest claim was over US$800

It won’t be a surprise to learn that medical related claims were 70% of the total value of all the claims over a 2 year period.

Remember that Travel Insurance has very broad coverage and some of the more unusual items could end up being very expensive.

What would you do if you had your passport, or your laptop stolen? It’s literally just happened to one of our members.

Other things that our policy covers include: –

  • Repatriation of children in the event of parents being unable to travel
  • Emergency Dental expenses
  • Compassionate Visits
  • Personal Liability – what happens when your golf ball hits someone in the head?

Of course as a travel club we do a lot more than travel insurance: –

All our members get a free lounge pass – so that when that inevitable delay comes (almost half of claims by frequency) you have a refuge to go to. we also provide an ongoing discount in case it happens more than once

Connectivity is almost a basic human right and yet when travelling it can be a nightmare. So everyone who joins gets a Flexioam X SIM solution which works in over 180 territories. You literally never need to buy another SIM card

Our Members also get a smart bag tag, which stops your luggage getting lost when you check it in. This is a higher risk on connecting flights, and Thousands of bags go missing every year. So even if you don’t join you should think about getting one of these.

We have just launched a Bookings page, which allows members to book flights, hotels, cars, and attractions at the lowest “all inclusive” rates that we can find. Be careful if you go comparison shopping as many of the big name portals will add extra fees at check out for taxes and services. We also have a tie up with BLAST Experiences if you want to do something really special, perhaps for a big birthday celebration ,or a team tour.

Once you understand that Travel Insurance makes sense, the other services should be a no-brainer, so long as they aren’t costing any more. We believe our  entire membership package will stack up competitively against just an annual travel insurance plan – but why don’t you take a look

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