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Thursday, May 30, 2013

Travel Tip : Travel Insurance

Travel insurance - to buy or not to buy?

Many people have this question in their minds when are are planning their travel or vacation. The quick and short answer is - BUY!

Since this is a really important subject, I want to take a few minutes to explain what travel insurance is and why you should get it. 

Travel insurance is something you will need when you travel. You never know what could happen, and most health insurance plans don't cover you overseas. Not only does travel insurance cover any injuries or illnesses but it also covers the stuff you take with you, any accidents that might occur, or cancellations that might arise. Hence, it is a worthy protection that you need to have.

And for just a few dollars a day, there's absolutely no reason not to get it. I never go anywhere without getting travel insurance. Whether it is a short shopping and eating trip to Bangkok or a long vacation to Europe, travel insurance is always there to cover all unexpected incidents, even the need for doctor visits and medicine. 

Travel insurance was there when my wife did not find her luggage when she arrived at Stockholm after two flights from Singapore. The luggage eventually arrived at her hotel more than 12 hours later and in spite of that she was able to claim about $800 USD from her travel insurance.

In another incident, my son went for a 5-day skiing trip in Chamonix Mont Blanc, French Alps. On the third day, he had an accident - he fell and had a 9 cm cut on his left thigh. Fortunately it was not serious and the rescuers warded him in a nearby hospital. He had surgery and was warded for 2 nights. Fortunately, he bought insurance which cost him GBP33. His medical bills at the hospital came out to be about EUR5000 which was all covered by the insurance. 

Travel insurance has more than proved its worth many times.

You never know what can happen and not getting travel insurance is just dumb. It's the kind of thing you will be very thankful for when you need it but hope you never do. After all, you don't want to end up like my friend who didn't have travel insurance when her computer was stolen and had to pay out of pocket for a new one. 

To get affordable insurance with great coverage, follow this advice: 

First, make sure the plan has a high coverage limit on your medical expenses. Most good travel insurance companies provide up to $100,000 USD in coverage care, though more expensive policies will cover you for higher amounts. The maximum coverage limits you can find is around $1,000,000 USD, which is more than you will need anyway. High coverage limits are really important when you go for long vacations because if you get really sick, injured and you need serious attention and have to be treated for a while, you want to make sure your high hospital bills are covered. The worst thing you can do is go cheap and get a policy with a $20,000 coverage limit, break a leg, and use that limit up in a surgery. Don't be cheap with your health. 

Secondly, you want to make sure your policy also covers any emergency evacuation. For example, if you are hiking out in the woods and break your leg, your insurance should cover your emergency evacuation. If a natural disaster happens and you need to be evacuated to somewhere else, your insurance should cover you. This protection usually covers an expense of up to $300,000 USD. This also means repatriation from the hospital to your home country. Standard emergency evacuation usually includes this provision but it's important you double-check your insurance company will cover the cost of your flight back home if needed. 

Next, a good policy should have ALL the following elements:
  • Cover most countries in the world (especially all the ones you visit).
  • Cover your electronics.
  • Cover injury and sudden illnesses within the country and abroad.
  • Have twenty-four hour emergency services and help.
  • Cover lost, damaged or stolen possessions like jewelry, baggage, documents, etc.
  • Cover cancellations such as the trip, hotel bookings, flight, and other transportation bookings.
  • Cover emergencies, strife in the country visited, etc. that cause you to head home early.
  • Policies should include personal accident coverage.
  • Cover any legal expenses if incurred.
  • Financial protection if any tour company you are using goes bankrupt and you are stuck in another country.
 One thing to remember is that travel insurance is NOT a health insurance substitute. Travel insurance is meant to be there in case of emergency. It's not meant to replace your health insurance so you can go get your yearly physical in some foreign country. A lot of people assume that. It's not. It's there for accidents you hope never happen.

So what doesn't travel insurance cover?

The majority of insurance companies won't cover you if you injure someone on the road (called third-party liability). Travel insurance policies do not normally cover alcohol or drug related incidents, or carelessness in handling your possessions and baggage. You won't get reimbursed if the problem happened because you were reckless. How "reckless" is defined is up to the insurance company. I once heard the story of a traveler whose bag was stolen at a train station. The bag was next to him and someone came up, grabbed it, and ran off. The insurance provider said he was at fault because he had left the bag unattached. But typically "reckless" means something a sane person with common sense wouldn't do. 

If you make a claim, remember that any travel insurance company, no matter how good, is there to make money and will try to avoid paying out as much as they can. They are, after all, an insurance company and they don't make money by paying out to every Tom, Dick and Harry. In order to ensure that you do get paid your claim, make sure you have all your receipts and necessary forms. Be prepared to wait to receive your money because even the best companies drag their feet. Be sure to keep a copy of all the money you paid so you can have proper documentation. Receipts, police reports, and official letters - all of it will help make your claim go through a lot quicker. 

There are a lot of companies out there. Travel insurance is a billion dollar industry and everyone wants their hand in the cookie jar. Make sure you can compare various plans and get one that suits you.

Finally, travel insurance allows you to travel with a peace of mind.

Happy travelling!

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