More travel insurance
Selling travel and selling travel insurance go hand in
But in recent years, travel agents have become hesitant when
it comes to offering travel insurance, because they believe
that legal restraints have put them in a peculiar and
With a better understanding of the legal pitfalls, travel
agents can confidently go about offering travel insurance.
“We must start with the fact that travel agents have a legal
obligation to recommend travel insurance to clients. Nor
does the legal obligation stop at handing over the travel
insurance “product disclosure statement” (the new name for
an insurance policy application) to clients, it goes
further” explains specialist tourism lawyer Anthony Cordato.
Under the Department of Foreign Affairs and Trade (DFAT)
Charter for Safe Travel, for which AFTA was first signatory
on 11 June 2003, agents are committed to “encourage
travellers to take out adequate travel insurance”. The
process isn’t always easy.
To ‘encourage’ travel insurance, the travel agent must
provide advice – what cover is recommended, what are the
requirements, what are the exclusions, to fit the client’s
circumstances and the travel destinations?
To give comprehensive advice on travel insurance, ASIC
requires the travel agent to hold an Australian Financial
Services (AFS) licence or be an authorised representative of
a licence holder. Many agencies have one person who has
trained and is an authorised representative. But most travel
consultants are not authorised representatives. How does the
travel consultant ‘encourage travellers to take out travel
Cordato, author of the book “Australian Travel & Tourism
Law”, says that the Insurance Ombudsman Service (IOS) has
recently solved this dilemma. In May this year, it published
a “Start Holiday” brochure. The brochure is a guide to
travel insurance prepared with the assistance of Australia’s
four major travel insurance underwriters. It can be ordered
from the IOS or downloaded as a PDF file on [link]
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Note: this was the second in a series of five interviews
in which specialist tourism lawyer Anthony Cordato discusses
issues of vital importance to travel agents.
Published with the kind permission of e-travel blackboard,
where the article was first published in August 2007, and
with the kind permission of Peter Needham.