Package Tour Insurance:

Insurers should inform consumers of the insurance coverage and receive a written consent from the consumers.

 A recent study found that consumers failed to be informed of coverage of tour insurance, to which a package tour operator insured consumers at a time. Also, it was found that procedure of receiving a written consent from the consumers was neglected. There is an urgent need to address the issue.

 This is based on an analysis on 65 consumer damage cases due to package tour insurance, filed to the Korea Consumer Agency (President: Dae-pyo Jung, www.kca.go.kr) during 29 months from 2010 to May, 2012.

 ※ Percentage of consumer complaint by type of consumer damage: ‘Injuries’ (41.5%)> ‘Theft’ (27.7%)>‘Food-poisoning (disease)’ 18.5%> ‘Insufficient explanation’ (12.3%)

In general, package tour operators (insurer) take out tour insurance included to package tour for consumers (the insured) en bloc. Yet, insurance premium is paid from consumers’ payment for package tour. However, the insurance company gives explanation on coverage and limit of compensation only to the tour operator, not to consumers, becoming the cause of consumer complaint. Also, the procedure of receiving a written consent of the insured (consumer) is neglected, the potential for the insurance contract itself to be ‘nullified’.

 Also, although the tour operator should be liable for any damage caused due to the tour operators’ deliberate attempt or fault, separately from the package tour insurance, a number of the operators are found to compensate the loss for the consumers, including the insurance money paid by the insurer.

Based on this, the KCA asked the Federation of Supervisory Service to reinforce management and supervision over package tour insurance to let insurers provide sufficient explanation on the insurance coverage and receive a written consent from consumers, advising consumers to check compensation limit and payment detail of travel insurance when signing a contract for package tour.