Just like packing one’s wardrobe, travellers should consider whether they just need one piece or everything.
It’s easy to assume you’ll never need travel insurance. After all, the weekend trip to Bali or the long trip home over the summer seems really safe, and the company usually pays for insurance for corporate travel.
When you do unexpectedly get hurt in a car accident or stuck in an airport because of a volcano eruption, though, you will need help. Thousands of travellers stranded in Europe after the volcano in Iceland erupted actually did have to pay lots extra for accommodation. And people do run into trouble even on those short weekend jaunts to Phuket and Siam Reap. That’s when you don’t want to have to worry about whether you can afford medical care or a hotel; and travel insurance can make the difference.
Many travel insurance policies here also cover unusual situations like terrorism and “acts of God,” such as a flood or volcano eruption. Each policy is different and insurers’ practices vary, though, so you’ll need to check whether these situations are covered. And practices can change, too. Some insurance companies specifically covered volcano eruptions and others decided not to right after one actually happened in April, while still others changed it to an extra-cost add-on.
Travel insurance is actually a little more complicated than it sounds, since it has multiple components. Just like packing one’s wardrobe, travellers should consider whether they just need one piece or everything.
One part is medical insurance. Whether you need it depends on where you’re going and whether your existing insurance covers medical expenses while you’re traveling. If you already have an insurance policy with worldwide medical coverage, there’s little reason to get a separate policy. If it doesn’t cover some countries, especially the US, then you may need extra insurance.
And look for whether it covers emergency evacuation, too. Rare as it sounds, evacuation can cost a lot if you ever do need it. A friend relates how it cost him over US$50,000 when his daughter had to be evacuated out of China for special medical care.
A second part is trip cancellation. More and more online travel sites and travel agents offer insurance just in case you cancel your trip, often at a cost of 4 to 6 percent of the ticket price. It sounds great − until you read the fine print, since it often only covers very limited situations. If you’re sick or there’s a natural disaster, for example, you’re usually covered. If you’re too busy at work to travel, change your mind or are worried about street demonstrations in another country, the insurance often doesn’t apply.
The third part is for personal items like your clothes and camera. If your baggage is lost or your phone is stolen, you may get reimbursed for your missing “personal effects”. However, this type of loss may already be covered by another policy you have for your personal items, so you’d want to check whether your existing policy covers you while you’re enroute to the destination.
If you do decide to buy travel insurance and figure out which types to get, then there are several steps:
One is to look at whether you’re already covered through your credit card. Some credit cards, especially platinum ones, offer travel insurance when you use your card to buy the ticket for your trip. If that insurance is enough, you can save yourself the cost of buying a separate policy. Just check online or call your bank.
The next is to figure out what coverage you actually need. If your medical insurance covers health care or your home contents insurance covers your belongings even when you’re abroad, then you may need less insurance and can pay less money. If they don’t cover you while you’re traveling, then you’d want more insurance.
After that, you should decide whether to get an annual policy or insurance for each trip. If you only travel once or twice a year, single-trip insurance is usually better. If you’re a regular traveller, then the annual policy will be most cost-effective .
Once you’ve considered all these options, plenty of companies offer insurance and most of the details are online. You can compare all the options at AIA, Aviva, AXA, NTUC Income and other companies that offer travel insurance to get the type that suits you best. You can also often buy insurance through your bank, travel agencies and online travel sites as well.
It’s easy to decide to save the money and not buy insurance. Most times, you’ll be okay – just like you won’t usually have a fire in your house or get hit by a car. Just in case the unexpected happens, though, it’s better to follow the Boy Scout motto and “Be Prepared"!
Richard Hartung | 25 August 2010
