Is there a market for a domestic travel insurance product?

[Bletchleyite]

With the discussion on travel insurance on the disruption thread, I wonder if there could be room in the market for an insurance policy to cover domestic travel disruption? If the likes of Trainline sold it it could get big quickly.

It might cover things like:
- Taxi or hotel when stranded (they would seek to reclaim from the TOC for you, or pay it themselves if they could not)
- Connections between modes where they typically aren't protected, e.g. between trains, buses/coaches and domestic flights, including where a car breakdown meant a transport mode missed
- Luggage theft or damage
- Lost hotel nights if applicable

How much might such a policy need to cost? I am sure I recall National Express used to sell a basic policy for a quid.

 

[Alex365Dash]

If the likes of Trainline sold it it could get big quickly.

Trainline already sell a domestic travel insurance policy. The price is variable depending on the length and price of the journey, and sometimes the option won’t come up. I’ve seen differing prices between £0.90 - £3.

Seeing how it does compared to your list:

It might cover things like:
- Taxi or hotel when stranded (they would seek to reclaim from the TOC for you, or pay it themselves if they could not)

The travel insurance covers a taxi or hotel when stranded. If it’s a taxi, you’ll need to reclaim from the TOC first before trying insurance, but this doesn’t apply to hotels.

- Connections between modes where they typically aren't protected, e.g. between trains, buses/coaches and domestic flights, including where a car breakdown meant a transport mode missed

The travel insurance covers both public transport connections (including flights) and also car breakdowns. However, if your connection is after your insured journey is complete (how far you’ve booked with Trainline), then that’s not covered.

- Luggage theft or damage

This is covered under the travel insurance (apart from gadgets), with an excess of £50.

- Lost hotel nights if applicable

This is not included.

It also includes a refund of your train ticket in the event of an emergency.

Of course, though, as with any insurance policy, it does have exceptions!

 

[Helvellyn]

Many people with an Annual Policy (including from packaged bank accounts) might already have domestic travel covered but be unaware.

There could be a market for a per trip policy, but it would depend on the price and what is covered (plus any excesses).

 

[Bletchleyite]

Many people with an Annual Policy (including from packaged bank accounts) might already have domestic travel covered but be unaware.

Almost always there's a requirement for booked hotel accommodation or two nights away for it to apply (or both) though. You can as easily get stranded on a day trip.

 

[PhilipRdNGauge]

With the discussion on travel insurance on the disruption thread, I wonder if there could be room in the market for an insurance policy to cover domestic travel disruption? If the likes of Trainline sold it it could get big quickly.

It might cover things like:
- Taxi or hotel when stranded (they would seek to reclaim from the TOC for you, or pay it themselves if they could not)
- Connections between modes where they typically aren't protected, e.g. between trains, buses/coaches and domestic flights, including where a car breakdown meant a transport mode missed
- Luggage theft or damage
- Lost hotel nights if applicable

How much might such a policy need to cost? I am sure I recall National Express used to sell a basic policy for a quid.

You might get an insurance company to offer such a policy for a couple of years, but once the claims start coming in the premiums will rise dramatically or the policy will be quietly dropped.

In the last few years a number of insurers have become driven by marketing & dreams of making a fast buck. The last "get rich quick" scheme was cyber insurance. Marketing people at various insurers saw an opportunity, convinced underwriters who had no idea of the risk & started selling cheap cover to businesses & households for losses due the cyber crime, ransomware attacks etc. A few massive claims later & cyber is a very dirty word in the insurance industry.

You might persuade an insurer they can make millions selling a policy to cover you for delays & cancellations in the UK even on day trips, but if customers of Avanti, LNER, Northern buy it then the claims experience will kill it in a year. Think how much the average rail user could claim for disruption in a single year, if they had such a policy. Many insurers start pleading poverty if their nett loss ratios* go over 50% on a fully delegated authority scheme. Sure you can have UK disruption cover, but at £1000 a year plus 20% IPT (higher rate because it's travel), do you think you'll get many takers.

* Nett Loss Ratio is how much the insurer pays in claims vs their premiums after they've paid broker commissions (with delegated authority, the broker does all the administration, including claims management).

 

[cactustwirly]

By the time you've paid up the excess, you may as well just use your credit card. The likelihood of actually needing insurance is slim.

 

[stuu]

You might persuade an insurer they can make millions selling a policy to cover you for delays & cancellations in the UK even on day trips, but if customers of Avanti, LNER, Northern buy it then the claims experience will kill it in a year. Think how much the average rail user could claim for disruption in a single year, if they had such a policy. Many insurers start pleading poverty if their nett loss ratios* go over 50% on a fully delegated authority scheme. Sure you can have UK disruption cover, but at £1000 a year plus 20% IPT (higher rate because it's travel), do you think you'll get many takers.

Such insurance products already exist. They don't pay out until the delay is significant, several hours or overnight or whatever. The average rail user doesn't suffer those sort of delays very often, unless they are extremely unlucky

 

[61653 HTAFC]

I think the word "travel" needs to be in the thread title. "Domestic Insurance" (sic) sounds like what you have to protect your home from things like flooding, fire, and burglary.

 

[Blindtraveler]

Simple answer, if a policy like this were to be sold I would buy it, on an annual basis preferably

 

[AM9]

Simple answer, if a policy like this were to be sold I would buy it, on an annual basis preferably

Depending on the premium demanded presumably?

 

[Bletchleyite]

I think the word "travel" needs to be in the thread title. "Domestic Insurance" (sic) sounds like what you have to protect your home from things like flooding, fire, and burglary.

Good point. Edited.

 

[AM9]

It might cover things like:

- Luggage theft or damage
-
How much might such a policy need to cost? I am sure I recall National Express used to sell a basic policy for a quid.

Most decent domestic home insurance policies include all possessions worldwide including luggage, laptops, phones and jewellery.

 

[Bletchleyite]

Most decent domestic home insurance policies include all possessions worldwide including luggage, laptops, phones and jewellery.

Premium ones do have "all risks" but they are very much at the expensive end and not massively worth it if you don't have much expensive stuff. Whereas near enough all cheap travel
policies provide that sort of cover albeit often not domestically.