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Financial Advice New Zealand - Membership Advisory Committees

Travel insurance premiums show it's worth shopping around

Canstar has done some research which shows a large variation in the cost of travel insurance. "Premiums will differ but always make sure that the cover you get is right for you.  Research thoroughly, make sure you know what your policy covers, and make sure it's right for you and your trip," says Jose George, Canstar general manager. There is a comparative table in this article on Stuff.co.nz.

Having said that, it isn't all about price, but as ever, the media stay anchored to it. To be fair the following quotes were included: 

"Obviously insurance products vary greatly in the nature and level of coverage they offer. It's not possible to make any meaningful comparison with the policies you mention without being very clear about the nature of cover each of them offers."

Insurance Council chief executive Tim Grafton said one of the main reasons policies differed in price was because they offered different coverage, limits and benefits. 

"We encourage people not to compare on price but to decide what protection they need and look into what each policy is offering." 

But no actual example of the policy difference was mentioned. Why is that?

  • Is it because there was no adequate benefit to illustrate the point? In which case its the insurer's inability to defend their value proposition - and that in itself would have been worth some reporting on. 
  • Is it because the insurers did explain their value proposition and the journalists left the example out, in which case, consumers deserve better reporting

Obviously, I am biased by the fact of my involvement in Quality Product Research Limited, but I think this underlines that price comparison alone is insufficient to provide a meaningful basis for a decision. 

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