The Australian Competition and Consumer Commission has welcomed a move by Virgin Australia to abolish its practice of pre-selected online travel insurance for customers booking flights with the airline.
According to the ACCC, Virgin’s previous opt-out model inadvertently lead customers to pay for undesired travel insurance without their knowledge.
“The ACCC will continue to work with other domestic airlines to end the practice of pre-selecting optional extras in the booking process, including baggage allowances, seat selection and travel insurance,” said ACCC Chairman Rod Sims.
Virgin Australia joins Qantas in ensuring its consumers are no longer required to opt out of travel insurance plans when booking airfares, giving them the choice to select insurance with the airline only if they choose to.
The move comes in the wake of a New Zealand ban on the opt-out practice following the successful “Ditch the Ticks” campaign lead by CHOICE and Consumer NZ.
Budget carrier Jetstar was forced to dump its opt-out travel insurance policy in New Zealand following the campaign, but the airline continues to operate the practice in Australia.
The ACCC believes the New Zealand policy proves that consumers are capable of making their own decisions on travel insurance, and has called on other domestic airlines to adopt a similar policy to Virgin and Qantas.
“We’re certainly hopeful that they will make changes voluntarily in the short term, to the benefit of their customers, or the ACCC will explore other options,” said Mr Sims.
Consumer advocacy group CHOICE has also weighed into the ‘pre-ticked’ travel insurance debate, calling for the remaining opt-out airlines Jetstar and Tiger to cease their practice of ‘tricking’ consumers.
“Pre-ticked optional extras can see travellers paying up to 40 per cent more for things they don’t want, when all they’re trying to do is book a flight,” said Head of Media Tom Godfrey.
Research from CHOICE has found that consumers may be better off steering clear of the big airlines for their travel insurance altogether, finding it cheaper for consumers to book their insurance through a specialist insurer.
Mozo data supports these findings, as our comparison calculator shows a jet-setter travelling to Bali for a week over Christmas would pay just $20.50 with a specialist insurer like fastcover, compared to $78.50 through Virgin Australia.
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