Why is my single-trip insurance quote more than annual?

wake6

Hi

I have tried searching for this and could not find previous discussion. Please forgive me if this has already been covered.

I have just been getting some quotes for a 16 night holiday to Florida in Oct 2015 for my wife and I. We are in our fifties and I declared all our pre-existing conditions, crumblies that we are!

We got four quotations, and each company quoted us for single trip and for annual, with apparently the same cover (cancellation, medical costs, baggage) and the same excesses. But for some reason the single trip was more expensive than the annual. Does anyone know why this should be? It is counter intuitive to me.

Thank you

PeacefulWaters

You might want to change your title.

Annual policies attract fewer claims (customers are more careful, perhaps because they're more experienced travellers) and the policies have better customer renewal rates which increases margins for the insurer over time.

wake6

Thank you

(I have altered the erroneous "multi" to "single" in the title - is that what you meant?)

SW17

wake6 wrote: »

Thank you

(I have altered the erroneous "multi" to "single" in the title - is that what you meant?)

I think PeacefulWaters probably meant that your title says single is less than annual, when it should say "more".

tomtontom

You'd need to check the annual policy covered a 16 night stay, some are limited to 14 nights. I'd assume they will as you had entered your trip details, but best to double check.

daveyjp

Also check the cover is the same. Keys areas of a single may not be in an annual.

wake6

Doh! Title altered. Thank you everyone for your replies.

InsideInsurance

The above may be true but often it isnt that.

The annual policy will be set to auto renew itself in 12 months time, the insurer therefore isnt looking at just 1 premium but potentially many years of premiums coming from you. With single trip they've had to pay advertising fees etc to win you this time and would have to do the same again next time you travel, with annual their acquisition costs are pretty much done now and next years premium will give them a lot more cash.

Many people with annual policies will keep them "just in case" they decide to go on holiday, take a short trip to the continent etc. There are certainly some who may have a policy for one or more years where they dont actually travel but given you are typically looking at less than £50 its seen as an easy safety net that avoids the hassle of having to buy insurance each time you decide to go anywhere.

paddyrg

Plus of course auto-renewal isn't always at the most competitive price - insurers are notorious for increasing premiums each year to way above what they charge new customers! The total opposite of no claims discount!!

Maybe just keep an eye on what they'd charge you new each year, and if they start increasing premiums too much, time to change :-)