I'm making a travel insurance claim. Do I get my premium back?
January 25, 2016 12:45 PM   Subscribe

The policyholder is Allianz. Just wondering if I include the amount of the original premium in the cost to be reimbursed. I've heard it both ways--just wondering what the standard is. Thanks!
posted by eggman to Travel & Transportation (4 answers total)
 
Best answer: I doubt it. I work in adventure travel and none of the companies we've used ever reimbursed you for the premium. You are covering the cost of your travel package. Just like an auto claim - you bash the car, you get reimbursed for the work to unbash the car but don't get the premium back. It's the cost of the service.
posted by HeyAllie at 12:49 PM on January 25, 2016 [4 favorites]


Best answer: Nope. You exchange a known, controlled loss (the premium) against protection against a much larger loss. So, rather than either losing $0 (trip was fine) or $1000 (trip cancelled, non-refundable) you will lose $20 (the premium) but if you come up snake-eyes, you don't lose the $1000.

You still lost the premium, regardless, but on this deal, the policymaker lost (you bet ~$20, they're paying you out much more than that.) The art of insurance brokering is making sure that the total sum of the premiums is more than the total sum of the payouts. Insurance companies that fail at this over the long haul go broke.

Insurance companies that fail at this in the short term (like when a hurricane hits?) This is why they have reinsurance, so if there's a sudden payout hit, they're covered. Of course, they pay a premium for that as well, and they lose the premium regardless as well.
posted by eriko at 1:03 PM on January 25, 2016


Response by poster: Thanks to both of you . . .
posted by eggman at 1:05 PM on January 25, 2016


The art of insurance brokering is making sure that the total sum of the premiums is more than the total sum of the payouts.

Which should tell you that when an insurance company rewards a behavior with a premium discount (seatbelts, etc.), it's because the behavior works.
posted by John Borrowman at 1:29 PM on January 25, 2016


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