However, if you bought the policy as a 'wholesale' policy, the $20 administration cost reduces down to maybe $1 or less, which means that the $5-15 of actual risk/benefit coverage increases up to $25-35 – more than double the coverage, compared to a 'retail' policy. If at all possible, you want to be buying a wholesale rather than retail cover.

What is the difference? A retail policy is where you fill out a special insurance application form, and send off a payment to the insurance company, and get a certificate of insurance back from them.

A wholesale policy (which also is sold through travel agents) is where a tour operator or wholesaler groups together many insurance sales. You still get the chance of buying insurance along with the rest of your travel arrangements, you pay the premium along with the rest of your travel costs to them, and simply get a pre-printed generic policy document and perhaps a voucher from the tour operator.

This way the insurance company has almost no administrative overhead – it simply gets a statement once a month from the wholesaler listing the people that they have sold insurance to and sending a check for the net premiums; all the insurance company has to do is bank the check (well, at least until you make a claim!).

'Real insurance' or Supplier's Self-insurance?

If you are buying insurance that ultimately comes from a travel insurance underwriter, that is a 'real' insurance policy. But some tour operators and cruise lines will offer their own 'house' insurance policies. Often, all these policies protect you from is from that company's own cancellation fees if you cancel your travels. This type of insurance can be very limited in its coverage, and while it might be less expensive than a comprehensive policy, it is rarely a good value.

Mexico Travel Forum