Good News for Consumers – DOT New Advertising Regulation

The United States Department of Transportation has established new rules governing advertising that go into effect on January 24, 2012.  The new rules establish higher standards for how airlines, tour operators, and travel agents advertise airfares.  Here are some highlights:

  • Airfares will now have to be advertised inclusive of all fees including taxes.
  • Post-purchase increases in airfares are prohibited unless they are due to changes in taxes or other governmental fees.
  • Baggage fees have to be itemized and listed in conjunction with airfares.
  • Opt-out options will no longer be allowed.
  • Violations can result in a fine of $27,500.

How will this impact travel insurance?  Currently many airlines, tour operators, cruise lines, and travel agents automatically include the price of insurance in the final price.  In order to remove the price of insurance a traveler has to “opt-out” by unchecking the automatically included option.  The new regulation will change this practice to an “opt-in” practice where the cost of insurance will not be automatically included unless it has been shown separately and the traveler has specifically requested that it be added.   

Is this good for the travel insurance consumer?  In the opinion of this writer yes.  Many unsuspecting travelers will now be able to shop for the best travel insurance for their needs rather than having a third party decide what is best for them.

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