Virgin Australia to stop adding insurance to airfare bookings

VIRGIN Australia has agreed to make a major change to its online booking over concerns passengers were being inadvertently slugged with unwanted extra charges.

Virgin Australia is making a change to its online bookings. Picture: Liam Kidston

VIRGIN Australia has stopped automatically adding travel insurance to online airfare bookings following concerns customers were being slugged with unwanted extras.

Following talks with the consumer watchdog, the airline has changed its online booking format so customers no longer have to “deselect” travel insurance if they don’t want it.

The change brings Virgin Australia in line with Qantas, which does not automatically add travel insurance to passengers’ purchases.

Virgin Australia’s budget carrier Tigerair, and Qantas’ Jetstar, continue to do so.

ACCC chairman Rod Sims urged other domestic airlines to follow Qantas and Virgin Australia’s lead.

“The ACCC has been concerned that the ‘opt-out’ model means that a number of consumers inadvertently end up paying for unwanted ‘pre-ticked’ extras,” Mr Sims said.

“The ACCC will continue to work with other domestic airlines to end the practice of preselecting optional extras in the booking process, including baggage allowances, seat selection and travel insurance.

“Experience overseas, including in New Zealand, shows consumers are more than capable of making purchasing decisions themselves. There are better ways for airlines to highlight the availability of these extras to consumers.”

Last year, the New Zealand Commerce Commission called for domestic companies to end the use of “opt-out pricing”. Air New Zealand voluntarily agreed to stop the practice.

A representative for Virgin Australia told AAP the change brought travel insurance in line with other opt-in features, such as extra baggage and premium seat selection.

It follows a Choice investigation in October that found add-on travel insurance offered by domestic airlines was significantly more expensive than the stand-alone polices offered by insurance providers.

Choice compared 30-day, worldwide insurance deals offered by Qantas, Virgin Australia and Jetstar with independent policies offered by each airlines’ insurance underwriter.

While Qantas’ travel insurance rated well, Choice said families could save hundreds by getting insurance independent of Jetstar and Virgin Australia’s add-on deals, partly because both airlines calculated costs per person for each traveller, including children.