Air NZ automatic insurance ripoff

I am a huge fan of Air NZ – the people that work there are great, the experience on the ground and in the sky is superb and they were deserved winners of a number of awards this year. However as customers we owe it to them to be ever-vigilant in helping them maintain their passion for delivering great journeys. So on to insurance we go:

I was checking out flights today on Airnz.co.nz, looking to fly to Queenstown:

Ouch – that’s expensive, but at least it is a relatively simple process.

The next screen made me angry though:

Air NZ has added an unsolicited $10 in Domestic Trip Insurance to the bill. They tried this a while ago, and it is back.

There are 3 things about this that turn this happy customer into an unhappy one:

1: It’s deceitful. The quoted price on the search results page did not include the $10, while the second page price did. I’ve  purchased unwanted insurance at least twice recently as a result.

2: It is painful. Before this change I just scrolled to the bottom of the page and clicked ‘continue’. Now I need to look out for the insurance scam and click it off. When I forget then I have to email customer support, who, though they know my Frequent Flyer number and the flight number, insist on asking for a confirmation number as well. This all takes energy and time, on both sides, and is certainly not improving my mood. Meanwhile I cannot set this as a preference in my frequent flyer options.

3: It’s an unnecessary ripoff. The insurance does not cover business travel, where you did not pre-book accomodation, where your travel provider goes insolvent or if the military take over. While the last one isn’t likely soon in New Zealand, I rarely book accommodation and almost all of my travel is for business.

The policy also does not cover electronic equipment, including Laptops and ‘personal electronic devices’, which I am going to take includes phones.

Finally with the ticket class I am buying it’s so easy to change a flight for free on the day (at the airport), and just as simple to to transfer it to another day for just $15. So why would I need insurance for that?

In short the $10 insurance is worthless to me – I am most likely to require insurance after I lose or break some electronic gadget while flying on business to a place where I have not pre-booked my accommodation. I will never get benefit from this so called insurance, and nor will most of the travellers that buy tickets. The high value business travellers in particular are really ill-done by this product which seems to belong in the 1970’s.

I’m sure this is a good money spinner for Air NZ, but it just feels wrong. It is not giving customers what they want. This automatic pre-selection of insurance went away before, and it should go away again and forever. Meanwhile the insurance product itself is of no value to most customers, and needs a serious upgrade.

<update – I just got a reply from AirNZ to one of my customer help enquiries. They now have my feedback.

“I have forwarded your concerns about the insurance your query to our insurance partnership manager, who has confirmed that we are currently undergoing some testing on our New Zealand website where the insurance may be automatically ticked during the process. This is however only a on a trial period at the moment to gauge passenger feedback, and a decision will be made by senior management at the end of that period whether to keep this on an ongoing basis.”>

About Lance Wiggs

@lancewiggs
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15 Responses to Air NZ automatic insurance ripoff

  1. Daniel says:

    I daresay your post here might have some influence on that senior management decision.

    I’d even prefer an extra page after you select your flight that forces you to explicitly answer yes or no to the insurance than I would the auto-addon. Not that that should be considered a good alternative, but it is less deceitful while retaining the annoyingly aggressive sales.

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  2. J Loman says:

    I tweeted this to @flyairnz when they first started doing it. I was first ignored then told that the insurance had been a feature for a couple of years…not sure they understood what I meant when I mentioned that it was “automatically ticked”. A few others tweeted it too, but got the same reply. I agree with you, it’s not very good business practise!

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  3. rgoodchild says:

    this happened me to me last night. At the moment I’m booking 2-6 flights a week over the next three months. I don’t want to be paying $10 a flight extra- like you it’s all business so cancellations are not covered anyway.

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  4. Andy says:

    Mate, couldn’t have said it better myself. Again I’ve had the response that insurance has been around for 2 years. It is totally deceptive policy that I have come to expect from other airlines but not Air NZ. Let’s hope it is a trial that they learn from – regular customers HATE this option.

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  5. Ian Simpson says:

    It’s the start of a downward spiral. I’ve had the dubious pleasure of booking some flights within Europe lately – have ended up with one flight each on Aer Lingus, Spanair, Easyjet and Flybe (fortunately haven’t had to stoop to Ryan Air).

    In every case the flight itself was less than 20 Euro (booking for two people so 40). Two of them I even managed “free” seats. So 0-40 Euro is $0- $70 NZ.

    When the charge came through on my credit card they all came to between $150 and $160, so more than doubled.

    Extra charges included airport taxes at both ends, government taxes (esp for “international” flights), luggage (only one suitcase between us, plus carry-on), “Service Fees”, Credit Card charges (10 Euro on a 72 Euro fare – ~14%!), etc.

    They also tried to push a host of extras down your throat (insurance, rental cars, hotels, exit row seats, priority boarding, lounge access, …).

    It was fantastic to book a flight on Air NZ a week or two after. The price quoted on the first page was exactly what I paid, and I didn’t get assaulted with dozens of extras.

    Jetstar etc are slowly heading this way too. I really hope Air NZ don’t follow suit.

    As a slight aside the travel insurance is redundant for me for another reason! If I pay >50% of my costs with my credit card then I get free travel insurance anyway.

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  6. Rob says:

    It is basically all marketing, as they want it to appear cheap, when you are probably paying no less than before. These days often the flight cost is the cheapest part, even less than the taxi, it is all the other associated fees and upselling of unneeded services where they make their money. No different from buying a PC from a toaster shop, and then the shop upselling you on an extended warrenty, antivirus software, other unneeded software and hardware, delivery and setup costs. The make the money on the upselling products, and not always on the product itself.
    Same applied to domain names, buy a domain from Godaddy, and they try to upsell you on everything.

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  7. Pingback: AirNZ Insurance Scam

  8. For an extra $10, they are causing havoc! One thing I loved is NOT having to double check everything with them because I TRUSTED them.

    Totally stink buzz.

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  9. James says:

    Agree Lance its a total scam and devalues their product.

    For pure ease of booking alone I am prepared to pay a little bit extra for a ticket with Air NZ than go through the JetStar/Pacific Blue booking process.

    Guess we could always use mixnmatch or even build a simplified booking engine either of which is the last thing Air NZ would want!

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  10. Rob says:

    Interesting they haven’t replied on here. Maybe if they think they ignore it, it will go away.

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  11. Ken says:

    Perhaps they havent been on here because they dont know about it – I only happened on this blog because the previous blog was about telecommunications. Anyways, I used to work in the contact centre at Air NZ (have left) and the number of bunnies calling up because they had a problem and needed insurance (after the fact) would absolutely amaze you. They would always go off at us when we pointed out that they had had a chance to purchase insurance (used to be a pop up that you had to tick yes or no on, and probably should have retained). Also had lots of people that received their money back for claims that were not supposed to be covered, and no reasonable person would expect to be covered, so I always recommended they contact the underwriter regardless of whether they thought they could claim. I know one lady went to Wellington to meet a group of friends and go cycling and they couldnt because the weather was too wet and she was covered. Business reasons are not covered, which really means if your business plans change. If you go on business and break your leg for instance or get sick, or your family gets sick and you trip is therefore extended, shortened or delayed you would definitely be covered. Hope this helps :)

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    • Rob says:

      If they are using social media tools such as twitter properly, then they should have seen it, as it was linked to in there. Plus seeing lance writes stories for the main stream papers too, I would find it impossible to believe that not one single staff member of such a large organisation wouldn’t have seen the story.

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  12. Linsay H says:

    I too hate this, and will book with other airlines until it goes away.

    But they’ve been doing the old “quote then add” with international travel for years. Try booking an international flight; you get quote a price and after that they add on airport and government costs. Its all a crock! I can’t see why it shouldn’t be mandatory to quote final costs, after all you can’t opt out of the airport and government costs.

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  13. mark says:

    Further to the waste of money.
    – the insurance only pays for the fare that is lost – you have to pay for the difference.
    If you’ve booked in advance and got a good deal, then a few days before find you need to delay only a few days and the price for new flight gone up significantly, then you pay the significantly – no more cheap flight you booked last month.

    Also the clause in QBE says
    QBE will not pay any costs that relate to:
    •travel connected with your business, employment or contractual activity (except costs you pay due to a weather disruption or for a personal reason, for example, when an employee is unable to travel because of sickness or a death in the family)

    I was going on holiday but business/employment requires me to delay a few days. My point is travel is for pleasure (not connected to business) which does not satisfy this clause. But the reason for not travelling is due to business.
    I could argue but alas it takes 5 days to process claim by which time my flight will have gone and I would loose all if not successful. My option is to reschedule business and piss off employer.

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  14. Pingback: Air New Zealand–Please Sort out Your Insurance Partner | The Diversity Blog - SaaS, Cloud & Business Strategy

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