What is the Equality Bill?
At the end of June 2008, the government announced a new Equality Bill that will be debated in the House of Commons in August. The bill covers a variety of equality issues, but its main aims are to close the gender divide on pay, allow a degree of positive discrimination towards minorities in the recruitment process, and to eliminate age discrimination in a variety of areas. If the legislation comes into force, many businesses (including travel insurance companies) will no longer be able to charge those who are over the age of 65 more for their services, and will not be allowed to refuse older customers products or services because of their age.
Why does travel insurance cost more for over 65s?
Over 65s can find insurance for their holidays abroad, but it usually isn’t cheap; travel insurance for older travellers usually has to be purchased through specialist providers, and typically costs significantly more than standard insurance policies.
Travel insurance companies charge over 65s higher insurance premiums because they are regarded as higher risk clients. Statistics show that, while over 65s are not significantly more likely to claim on their travel insurance while on holiday, when they do claim it costs travel insurance companies on average 10 times more than usual, usually due to the longer period of time older clients spend in hospital.
What will change in the future?
The new legislation is of obvious benefit to older travellers who struggle to find comprehensive and cheap travel insurance. However, there is a danger that insurance premiums will rise for all customers. Travel insurance companies have been able to provide good cover at low prices precisely because they have been able to adapt their prices to the estimated level of risk of the client. The increased cost of insuring older travellers may end up being passed on to everyone who buys travel insurance.
One possible solution that has been suggested is that potentially higher risk insurance customers (such as the over 65s) should be individually assessed to see if they should be charged higher premiums. However, while this may help to provide a fairer way of assessing customers for their insurance costs, it could spell the end to quick and simple online booking. With the volume of clients clamouring for travel insurance assessing individual customers may be a logistical nightmare - and a costly one as well!
It remains to be seen how the travel insurance industry will be affected if the new Equality Bill comes into effect. Whether prices go up, assessment becomes the standard or online booking becomes the exception rather than the rule, it looks like things are going to change - and the days of cheap travel insurance could well be numbered!
Patrick Chong is the Managing Director of Journey’s Travel. Their commercial travel insurance website, Insuremore, offers cheap travel insurance for families, couples and singles with a quick and easy online claims feature.
Article Author :Patrick_Chong
Last 5 posts in travel insurance
- All About Swiftcover Car Insurance Policies - August 29th, 2009
- Travel Insurance - A Real Need Or a Waste of Money? - July 18th, 2009
- Reasons For Purchasing Insurance Covering a Holiday With the Mother-in-Law - July 18th, 2009
- Health Insurance Coverage While Traveling - July 18th, 2009
- This Travel Insurance Review Will Give You an Education - July 16th, 2009
Tags: cheap travel insurance, travel insurance