5 common misconceptions about travel insurance debunked
By James Yeo
As 2017 comes to a close, many people are travelling overseas to bask in the festive Christmas and New Year mood.
As such, buying travel insurance is one of the few key things you should bear in mind, especially when you are planning a trip in a group.
This is because insurance can cover a lot of things, such as losing your luggage at the last minute, flight delays or cancellation, and any medical emergency that occurs during your trip.
According to a 2017 report by AIG Singapore, there is a higher chance of any of the following high-impact situations occurring today as compared to three years ago:
Severe weather conditions
Socio-political atrocities like terrorist attacks, or
Medical issues, including outbreaks of epidemics.
None of these incidents can be predicted ahead of time and they can be damaging on a very large scale.
With that, we are going to cover five common misconceptions when it comes to travel insurance:
1) Travel insurance is for long trips only
Many people harbour the misconception that travel insurance is meant for long trips, and thus you do not need it if you are on a short trip, such as to Malaysia.
It is important to realise that no matter how short the distance, you wouldn’t want to forego coverage on important things like medical expenses, international SOS assistance, or loss of hotel use.
2) Coverage only includes baggage and flights
Another misunderstanding about travel insurance is the coverage it offers.
Many people believe that it only covers loss of baggage, or flight delays and cancellation, but this is not true. In addition to security coverage and any inconvenience caused during travel, travel insurance policies can also include:
Repatriation services
Emergency medical evacuation
Medical or dental cost related to accidents
Personal accident coverage
Rental of motor vehicle
Therefore, whenever you buy a travel plan, make sure you research properly and go through the list of benefits to see what each package covers.
3) Travel insurance covers anything and everything
While such policies cover more than you might think, you should understand that it doesn’t cover everything, as every policy has certain exclusions.
To get proper detail about the exclusions, you must read the terms and conditions of the insurance policy. This is especially so if you are going to attend any special event or are travelling for a high-risk sport, such as mountain climbing, driving, bungee jumping, etc.
This brings me to the recent volcanic eruption of Mount Agung in Bali. People who bought travel insurance policies after 15th September 2017 would not be covered for any out-of-pocket expenses incurred as a result of travel service disruptions/cancellations. It is because that’s the date where the Indonesia’s government released news of Mt Agung’s possible eruption.
In addition, it is important to understand that these insurance packages do not cover any illnesses that are pre-existent.
4) Travel insurance is cheaper to buy from flight booking sites
When you visit a website to book your flight, you will likely have seen various travel insurance packages available to sign up concurrently. Many people have the misconception that these packages offer the same benefits at relatively cheaper cost.
Unfortunately, these add-ons usually have very limited insurance coverage and offer plenty of condensed benefits – which explains why many of them are relatively less costly.
One way to overcome this is to get the travel insurance from your current financial planner. Although the cost may be slightly higher, they have vast experience in handling even complex cases.
5) Medical expenses are not covered after you’ve returned from the trip
Many people believe that travel insurance plans do not cover medical expenses related to illnesses caused by the trip once you are back.
The good news is that you certainly can claim such expenses if it is associated with the travel experience. However, do note that you can only make the claim if you visit a doctor within a defined period of time as mentioned in an insurance contract.
Lastly, as per any insurance policy, it pays to focus on the fine print of the policy, especially when it comes to claiming conditions and general exclusions. Not only will it reduce the room for misunderstanding, but can also assist you in finding your suitable travel insurance plan.
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