Is it cheaper to buy travel insurance through an airline or travel agent?

Matthew Chapman By Matthew Chapman

When booking holidays you are bombarded with add-ons. Would you like to pay for hold luggage? Yes please. Do you need to hire a car? No thanks. Would you like to buy travel insurance? Why not.

There is nothing simpler than booking travel insurance with an extra click of a button, but travellers should tread warily when cover is offered when you book your tickets.

While at first glance the prices and cover may seem reasonable, it is worth digging a little deeper. Click on the links to jump down to our EasyJet, RyanAir and British Airways travel insurance reviews.

Even the Foreign & Commonwealth Office recommends that you should shop around.

Shopping around should not simply mean you buy the cheapest policy. Such a strategy can prove a false economy because it may result in your cover not stretching far enough or you being forced to pay through the nose in excesses.

You can use our guide to travel insurance to find out our top 10 policies.

One of the most important thing to consider when buying holiday insurance is the level of medical cover it offers.

If you are injured or fall ill abroad, bills can spiral out of control quickly. On top of of the treatment costs there are additional expenses to think about, including specialised transport back to the UK and paying for a close relative or friend to accompany you home.

The tale of London doctor Sebastian Kola-Bankole shows how forgetting to buy travel insurance risks leaving you destitute.

Kola-Bankole required operations on his spine, ears and arteries and a specially arranged flight back to the UK after being hit by a lorry in Las Vegas.

Fortunately for Kola-Bankole his friends managed to raise £200,000 for his medical costs through a crowdfunding campaign.

Experts say good quality travel policies should cover medical costs of at least £2m, but policies with more than £10m of cover may be excessive.

The FCO’s research found that in 2013 the average medical claim was £914 and the average Post Office travel insurance personal injury claim was £7,500.

To put this in perspective, it costs in the region of £100,000 to be treated for an infection in a Californian hospital with return flights, while a fall resulting in a broken hip and treatment in a Spanish hospital with return flights costs around £15,000.

When booking a week’s holiday in Greece during May with EasyJet the insurance offered with the flights includes a whopping £15m in medical expenses cover.

The cost of this single-trip insurance premium for someone in their late 20s is £15.07, which compares well with some rivals but is not the cheapest.

For example, for the same trip M&S offers £10m of medical cover, £4,000 of cancellation cover and £2,500 of luggage cover with a £50 excess for £25.96. But an AA policy with £10m medical cover and similar luggage and and cancellation limits costs £11.77 and an ERV policy with £15m medical cover and no excess costs £12.18 for the same trip to Greece.

EasyJet’s insurance is provided by Allianz and insurance policies from all other airlines and travel operators are underwritten by other consumer-facing insurance providers.

The exception to the rule is Ryanair, which is underwritten by a broker called UK General Insurance Limited.

British Airways’ provider is Preferential Direct, Rock Insurance provides policies for both Monarch and Jet 2, Flybe uses AIG Europe, while Thomson’s is provided by AXA and STA Travel’s insurance also uses Allianz.

Ryanair’s insurance is significantly cheaper than EasyJet’s – its cover for a trip to Greece on the same dates is £8.70.

This offers medical expenses of £2.5m, which should be more than enough, and other benefits include £1,500 of personal belongings cover and up to £3,000 for a cancellation.

However, Ryanair requires a £75 excess compared with EasyJet’s £50 excess and EasyJet offers up to £2,000 for personal belongings and £5,000 for cancellation.

It’s very important to make sure you’re paying for the parts of a policy you really need. This works both ways – £15m of medical cover may come with a higher price tag but you’re unlikely to ever need that much, however, you could regret getting a cheaper policy if you actually have to claim and find it doesn’t cover all of your belongings and there’s a high excess.

Find out how to get the right balance of price and quality with our guide to travel insurance.

EasyJet travel insurance review

EasyJet's travel insurance is available when you're buying tickets from the airline and on a separate white label travel insurance site. The price and level of covers on the two sites may differ slightly. Allianz underwrites its policies.

It has five cover options. Cancellation provides £1,000 of cover if you have to cancel before the trip begins and Cancellation Plus adds up to £2,000 of cover for your luggage and possessions. Both of these policies are rated 1 Star out of 5 by independent financial reviewer Defaqto.

Its main policies are Essential and Essential Plus, it also offers separate winterports cover. Defaqto says Essential is a 2 Star policy and Essential Plus offers 3 Star cover.

A Star Rating indicates where a product or proposition sits in the market based on the quality and comprehensiveness of the features it offers.

A 3 Star rated policy “has an average level of features and benefits” while a 2 Star rated product has “below average range of features and benefits”.

RyanAir travel insurance review

RyanAir travel insurance is available when you're buying tickets from the its website. UK General underwrites its policies and Intana is the claims handler.

It offers Travel and Travel Plus policies. Both are rated 3 Stars by independent financial reviewer Defaqto. A 3 Star rated policy “has an average level of features and benefits”.

You can compare the 10 best travel insurance policies here.

British Airways travel insurance review

British Airways offers single, multi-trip and winter sports cover from a travel insurance section of its website. Preferential Direct underwrites its policies.

For single and multi-trips it has a Value and Deluxe option. Value offers £4,000 of canellation cover, £750 of personal property cover and has a £75 excess. Deluxe offers £10,000 of canellation cover, £2,000 of personal property cover and has a £50 excess.

Both products are rated 3 Stars out of 5 by independent financial reviewer Defaqto. A 3 Star policy “has an average level of features and benefits”.

It's worth checking whether your policy includes Scheduled Airline Failure Insurance - this pays out if your airline or agent goes bust. Interestingly EasyJet's policy doesn't include it. Not all policies do but the Post Office's travel insurance has a clause that says it will cover "irrecoverable sums paid in advance in the event of insolvency of the Scheduled Airline...".

The variations in pricing are highlighted by comparing premiums offered by an airline when you’re buying a ticket against an equivalent policy direct from the airline’s white-label insurance site.

As well as offering insurance during the checkout process, EasyJet also has a separate insurance website run by Allianz.

The ‘Essential’ policy from EasyJet’s travel insurance website costs £17.01 for the same trip to Greece and offers significantly less generous benefits than the £15.07 premium offered at checkout as an add-on to EasyJet flights.

Perhaps more damningly if you check the £17.01 price against a premium for the same trip on Allianz’s own website you discover the EasyJet premium is more expensive and provides less comprehensive cover than Allianz's £16.35 Gold Limit policy despite the excess on both being the same.

An EasyJet spokesman told Bought by Many: “Thanks for bringing this to our attention - we’ve investigated with Allianz, our insurance provider and on a small amount of occasions it is possible for there to be marginal differences in product prices through the Allianz white-label site.

“For a fast, easy transaction we recommend customers book at the same time as booking flights to benefit from our lowest rates for all customer groups.”

There is an even bigger difference in prices when you compare Thomas Cook’s cover against that of its insurance provider Holiday Extras.

The cheapest insurance premium for the week in Greece offered by Holiday Extras was £12.25, compared with Thomas Cook’s least expensive premium costing £20.04.

Meanwhile, the most expensive premium from Holiday Extras was £18.75 – still less than Thomas Cook’s least expensive premium and significantly cheaper than Thomas Cook’s £28.63 Gold premium.

Thomas Cook did not respond to request for comment about the price discrepancies.

Cheaper deals can often be found elsewhere if you look beyond the airlines, travel companies and their white-label insurance providers. Learn more about the best providers with our guide to the top travel policies.

Research from Money Saving Expert found a worldwide annual family policy with winter sports cost £335 from Thomson, while its top pick for similar cover costing £65 with HolidaySafe Lite is almost six times cheaper.

Care must also be taken with the limitations on the policies. For instance, Thomas Cook’s policy requires the traveller to start and finish the trip in the UK or Republic of Ireland.

Although it isn’t a travel operator, Columbus insurance offers insurance in many airports. It has even developed a self-service, ATM-style terminal where you can buy a policy.

One of our colleagues used the machine and found you couldn’t opt out of the cancellation option, which is practically worthless if you’re buying insurance in the airport. So you’re paying for something you can never use. We’ve covered why it’s worth buying insurance early so that you can use the cancellation clause.

There is no denying the convenience of buying insurance from an airline or travel company. Anything that encourages you to book insurance immediately after your flights is a good thing because you are then covered for cancellations.

However, taking a few minutes to shop around means you could make an instant saving and a bit more legwork will let you rest assured you have the best cover.

And afterwards all you have to focus on is making sure you enjoy your well-earned break. Bon Voyage!

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  • by David Woodfield