A report released by Sen. Ed Markey (D-Mass.) Tuesday on travel insurance offered through airlines and OTAs found insurance is being "aggressively pushed onto customers" and "fails to provide promised coverage" and that "the airline industry is exploiting travel insurance as an easy revenue generator."

"Flyer Beware: Is Travel Insurance Worth It?" is based on the senator's review of nine airlines (Alaska, American, Delta, Frontier, JetBlue, Southwest, Spirit, Sun Country and United) as well as OTAs CheapOair, CheapTickets, Expedia, Hotwire, Orbitz, Priceline and Travelocity. It specifically calls out AIG Travel Guard and Allianz Global Assistance, which provide insurance on 12 of those OTAs' and airlines' websites.

"Because none of the airlines contacted by Sen. Markey's office was willing to disclose details of its financial relationships with AIG or Allianz, ... Markey also is querying the companies to learn more about the financial arrangements they have with the airlines and online travel agencies," according to a release from the senator's office.

The letters to Jeff Rutledge and Mike Nelson, CEOs of AIG and Allianz, respectively, were sent on Tuesday, the same day the report was issued. They ask a number of questions, including whether the companies have contracts with airlines and OTAs and their role in marketing insurance, and seek data on policies sold, premiums collected, claims made and more from 2007-2017.

Daniel Durazo, director of communications for Allianz, confirmed Tuesday afternoon that he had received the letter. Allianz will evaluate the letter and decide how to respond, he said.

Richard Aquino, vice president of sales for Allianz, said Allianz was not contacted during the investigation that resulted in the report. He also said he believes Allianz's products provide benefits to travelers.

"It would have been nice if the senator's office would have contacted us, because I see a huge benefit in our product portfolios, and if it wasn't so successful, then I don't think that we would be growing at the rate that we are," Aquino said. "Even with the airlines, we have artificial intelligence that actually works with the system that looks at the traveler and puts the best product in front of the traveler. So I really think it's a value add to the journey."

Like Allianz, the U.S. Travel Insurance Association (USTIA) said the senator's office did not contact its officials.

"USTIA is not aware of Sen. Markey or his staff having contacted us or anyone in the travel insurance industry while they were compiling this report. As such, we found that the report did not match [the] industry's experience with its customers, and we would be glad to share that experience with the senator," the association said in a statement.

The group said it recommends consumers fully understand insurance before purchasing it.

"As with homeowners and auto insurance, travel insurance has some limits and conditions, and therefore, travelers should thoroughly review the terms and conditions before -- and after -- purchase," the association said. "The purchase of travel insurance is voluntary."

In a statement, AIG said, "Each year, travel insurance plans provide millions of travelers with protection for their financial investment and valuable travel assistance services. We ensure that a thorough description of coverage is available to our policy holders at all times."

Markey's report found that airline and OTA websites "offer only bare-bones travel insurance plans with little coverage and a long list of exclusions that leave customers stranded," and they "commonly overstate" the flexibility of the policies. The details, the report contends, are buried in fine print.

Insurance is often encouraged, too, with the 15 or 16 companies requiring consumers to either buy or decline insurance before enabling the purchase of airline tickets, according to the report.

"Consumers are pressured to buy plans that promise extensive or even total coverage but in reality offer very little, leaving them without the security they thought they bought and oftentimes without their money," Markey said in a statement.

With regard to a promise of extensive or total coverage, the senator's report calls out five OTA websites that have named their international travel insurance a Total Protection Plan. The plan "in fact provides limited coverage," the report states, pointing to coverage limitations applied to trip cancellation or interruption or a plan promising lost-baggage reimbursement that requires a consumer to click to the policy to see there are monetary limits to that reimbursement.

As a result of the report, the senator made a number of suggestions. Travelers should weigh the risks they want insured and find a plan that fits their needs, read the policy's terms, evaluate other insurance options using a comparison site and save receipts and cancellation notices.

Airlines "should return to charging fair prices for services expected," the report states, enabling travelers to cancel or change flights without excessive fees. Markey also said airlines should treat insurance like other add-ons and not require travelers to purchase or specifically have to decline insurance, and airlines and OTAs should be more transparent about travel insurance policy sales and their relationships with travel insurance companies.

The senator said insurance companies "should make information related to travel insurance claims public." 

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