Students
looking to take time off with a gap year could between them shell out £59m* more
in travel insurance than is necessary, warns Brian Wright, Managing Director of
Karmainsurance.com
Karma
sourced worldwide travel insurance costs for a 19 year-old (leaving in August
and returning July 2009) and found the difference between its quote of £160.25
and the highest, £455 from specialist student travel agent STA Travel, was a
staggering £294.75, nearly three times more expensive. ‘Student-friendly’ insurer Endsleigh quoted
the second highest premium at £444.50.
Brian
comments: “It’s predicted around 200,000 post A Level students and graduates
will pack their bags this year and Government statistics reveal around a quarter
will have no insurance. Given the
sky-high premiums being offered by the majority of gap year insurers, I’m not
surprised.
“I
award insurers a D minus for their profiteering. Cover should be accessible to
all and we will only do this by making premiums more affordable. The average cost of a gap year is around
£12,000 and studies from banks show only one in five students saves to fund
their trip. Parents are left to foot the
bill for the remainder and I worry, that in the current economic climate,
insurance could fall off their radar with so many other financial
commitments.”
Traditional
gap year providers offer cover for cancellation, missed departure, curtailment,
medical expenses, personal liability, cash and baggage, but this says Brian, is
outdated and not enough. “Policies
should reflect the growth in popularity of sports termed as extreme or hazardous
and cover accordingly. Equally, they
should recognise that people may be visiting remote regions and provide search
and rescue cover, plus protect the cost of trips that are independently
arranged.”
Karma’s
insurance includes some 240 general, extreme and hazardous sports, such as;
trekking in remote or mountainous areas, white water rafting, canoeing or
kayaking, trail running and riding, snow surfing, tobogganing, bungee jumping
and the latest water sport, wakeboarding.
It
provides a search and rescue facility, either via the local emergency services
or funded privately through the insurance, and offers complete traveller
protection against failure of an airline or transport provider, hotel or
accommodation supplier or car hire firm to honour a pre-booked agreement. Vital if there are no bonded travel
agreements in place which is usually the norm for gap year
students.
Brian
continues: “Online insurers do not have the traditional overheads, so there’s no
excuse for not passing on their savings to customers. Also they should be broadening their horizons
and offering more substantial cover.
South America is a popular destination, yet it‘s one of the most
dangerous, so why do so few providers offer search and
rescue?
“I
fear students are getting ripped off – especially those who are misled into
buying their insurance from round-the-world ticket providers. They may feel they’re saving money on their
ticket, but this cost is usually offset by exorbitant insurance prices and
probably a big commission.”
Brian
concludes: “The long-held theory ‘pay
more and you get better quality’ no longer rings true and our research proves
this. Insurers need to move up a gear,
take less profit to make insurance accessible to all and design products that
better meet the needs of gap year students.
If I was Ofsted investigating their products, I would place them in
‘special measures’.
*
Difference between cheapest and most expensive quote - £294.75 x 200,000 (the
predicted number of students taking a gap year) = £58.95m.