They say that if you can’t afford travel insurance, you can’t afford to travel.
Right about now, you might be asking yourself… Is travel insurance REALLY a must?
Because what are the chances that something horrific is going to happen to ME?
Do I really need it?
Let’s just say this. In our time as an insurance brokerage, we have assisted with thousands of travel insurance claims; that’s hundreds of claims a year. I think that says enough.
There are various reasons as to why you should purchase travel insurance whenever you travel. Let’s cover off a few worst case scenarios, which could happen to anyone! These will help you understand why travel insurance is a non-negotiable.
Imagine if…
1. You’re in L.A. and you’ve rented a car… someone crashes into you.
You’re driving to Hollywood to take in all the sights and someone crashes into your car. You experience severe injuries to both of your legs and torso. The ambulance shows up straight away and the next thing you know you find yourself at the closest hospital. Fast forward one week later and you’re still in hospital with a medical bill amounting to $106,896 and counting…
2. Your mother becomes ill… you’ve spent $9,622 on your upcoming trip.
Your mum becomes seriously ill as a result, you have to cancel your 2-week family holiday to Kenya, which has cost you a total $9,622 in accommodation; what happens to your non-refundable deposits and pre-payments amounting to this sum?
3. You’ve arrived in Munich… 2 days later you find yourself with a court order.
You decide to go out one night with your friends to a local club. It’s 11PM and a fight breaks out, where you’re caught in the middle. To add to the chaos of it all, you see that a fire has started within the club. The next thing you know, you’ve been caught on camera and are being blamed for reckless behaviour and for starting the fire. The legal proceedings are estimated to cost you an approximate $29,823…
As you can see, the implications of NOT having travel insurance can not only be very serious from a personal liability standpoint but also, from a price point.
Now, travel insurance can be a little overwhelming to understand as there are various aspects to it. So, when you’re taking out your policy, there are a few essential aspects you’re going to want to look out for.
What do you need to look for in your travel insurance policy?
First of all, let me explain that travel insurance is basically like a binding contract between you and your insurer.
As well, it’s important to note that travel insurance policies can differ… a lot. So, it’s imperative that you clearly understand what’s covered under the policy you decide to select.
Now, there are 5 key parts to travel insurance.
1. Medical Emergencies & Evacuation
As demonstrated in the example above, hospital costs can be very dear. Let alone, emergency transport costs home for treatment, which can exceed $100,000.
Now, in terms of what you need to look out for when it comes to your policy, you’ll want to pay special attention to the following key areas:
- Emergency evacuation – what’s covered?
- What are your limits on medical expenses?
- Are you covered for emergency dental work?
- What are the general exclusions?
2. Trip cancellation
As highlighted in the example above, the need for trip cancellation insurance is real as this can happen and does happen, often.
So, what would you want to look out for specifically when it comes to your trip cancellation coverage? Here are a few key pointers:
- You need to purchase your travel insurance when you’re booking your tickets – not the week prior to leaving
- Does the policy cover trip cancellation?
- Does the policy cover non-refundable, pre-booked costs?
3. Baggage & personal belongings
It’s interesting to note that more often time than not, people purchase travel insurance with the intent to cover themselves for any potential lost or stolen belongings. But the truth is that this kind of protection is one of the least important reasons you should take out travel insurance; after all, a camera can be eventually replaced whereas your health cannot.
Things you want to look out for in your policy:
- What are your policy benefits?
- Check your coverage descriptions carefully for limits and exclusions relating to high value items and cash
Many insurers will expect you to take ‘reasonable care’ of your items and to not leave them unsupervised in a public place like your hostel shared room or car for instance. So make sure you understand what these expectations are when it comes to your baggage and personal things.
4. Personal liability
Personal liability travel insurance covers third-party insurance claims. In other words, this insurance pays for the cost of any damages, loss or injury to you or your property that you or a member of your travelling party is personally responsible for causing.
It’s important to note that personal liability does not cover intentional harm.
What to look out for:
- Would your legal expenses be covered should you need to settle / defend a claim against you?
- What’s the limit on the payment of compensation if you commit an act of negligence?
5. Coming home early
Nine times out of 10, a travel insurance policy ceases after you arrive home.
So even if you’ve taken out a policy for 12 months but you decide to come home after 5 months, you are not entitled to a refund on the seven remaining months.
In some instances, you can however resume your trip on the same policy; you just won’t be covered for the time you’re at home.
So, let’s get clear on what you’ll want to look out for:
- What’s your period of coverage?
- Check details around when you may be covered for expenses relating to “medical evacuation”, “trip interruption” or “curtailment” for details on when you may be covered for expenses if you have to return home early
At Insurance House, one of our specialties is travel insurance. The beauty of working with us is that you won’t need to sort through your policy with a fine toothcomb as that’s our job as your direct broker. We’re here to make things as easy and clear for you as possible. You tell us what you want and we’ll sort out the rest so that you can get back to planning your dream holiday.
Extract from http://www.insurancehouse.com.au/blog/no-travel-insurance-don-t-travel/
