H. Travel Insurance
A. Overview
Travel insurance is designed to cover unforeseen losses incurred while travelling. Subject to the coverage of a travel insurance policy, a policy usually covers flight delays, trip cancellation, loss of money and possessions, accidental death, medical expenses, lost/damaged luggage and third party liabilities, etc.) which are aimed to meet travellers’ needs. Certain policies also provide ancillary services (e.g. evacuation services) to handle emergency needs during the trip. Premium varies depending on the scope of cover and amount of indemnity.
In general, you may purchase travel insurance to cover yourself and your travel companion.
B. Common insurance covers
Generally speaking travel insurance comprises different forms of insurance cover:
1. Death and disablement
A common form of protection a travel insurance policy provides is an indemnity (usually at a fixed sum) for the unfortunate event of death or disablement of travellers. Regarding the claim of disablement, the indemnity is usually confined to permanent disablement and that the prescribed amount of indemnity is set for each and every prescribed forms of disablement.
2. Medical expenses
This form of protection generally covers two main items: (i) bodily injuries sustained during your trip and (ii) sickness/disease contracted during your trip. The form of indemnity varies across travel insurance policies. Common forms of protection are reimbursement of medical expenses for medical treatment (in-patient or out-patient, or both) in respect of your injury sustained during your trip, and payment of cash allowance benefit which is generally restricted to hospitalisation during your trip.
Subject to the terms and conditions of the policy, travel insurance may also provide emergency assistance services to travellers for serious medical conditions. Some travel policies provide 24-hour worldwide telephone medical advice services and emergency evacuation and repatriation services. These ancillary services are usually provided by contractors engaged by the insurers. Travellers should check the terms and conditions of the policy carefully and understand the scope of services and consider whether any additional charges may be involved (e.g. fees for international telephone calls or upgrade of air ticket class for repatriation).
3. Personal liabilities
This cover provides protection against your potential legal liability for bodily injury to third parties, or loss or damage to properties of third parties as a result of your negligence. Reasonable legal costs and expenses are also covered, subject to the limit of indemnity.
4. Loss, damage or stolen luggage
Travel insurance not only provides indemnity to you for luggage lost or damaged (whether by an accident or theft) during your trip, but may also extend the cover of your household contents lost as a result of burglary when you are absent from your residence for travel. Luggage and certain electronic devices (e.g. laptops and mobile phones) may be specifically named in the policy to be subject to different limits of indemnity and conditions for indemnity.
5. Flights delay and trip cancellation or curtailment
Subject to the terms and conditions of the policy, allowance or compensation may be payable to you for flights delay, trip cancellation or curtailment. This cover is often subject to certain specific conditions. For example, allowance or compensation is only payable if the flight delay exceeds a specified number of hours. Trip cancellation or curtailment may only become eligible for claim as a result of bodily injury or sickness of serious nature. Certain travel insurance policies may extend coverage to provide indemnity for trip curtailment or trip cancellation due to serious bodily injury or sickness of the insured person’s immediate family member(s).
6. Loss of money, possessions and travel documents
Coverage in travel insurance always provides for loss of money, other possessions and travel documents arising from theft, robbery or burglary during the trip.
7. Special covers
Hiring a car for travel is very popular nowadays. Some travel insurance policies provide cover for liability arising out of the use of a hired car.
Another example of special cover is hole-in-one insurance for golf competition or event. This is a type of prize-indemnification coverage to eliminate your potential expenses (e.g. offering any special gifts to the players in the same golf course if you are extremely lucky to score a hole-in-one).
C. Matters for attention when choosing travel insurance
When choosing travel insurance, consider what financial loss or other matters you want protection against and find out whether a particular insurance plan is suitable and sufficient for your needs. While premium for travel insurance is cheaper than most of other types of insurance (e.g. medical insurance), it is still important that you understand what is covered and what is not covered.
1. Coverage and territorial issue
You should choose a suitable travel insurance plan taking into account your travel destination(s) and the duration of your journey. In doing so, you should always consider whether a specific travel insurance plan provides the protection you want and pay close attention to the exclusions (where there may be common and also different exclusions applicable to each cover). For example, if you are planning to engage in certain adventure activities or extreme sports, such as skydiving, mountain climbing, hot air balloon and bungee jumping, please note that some travel insurance policies do exclude coverage for accidents arising out of these activates or sports. If you want protection against accidents arising out of any of these activities or sports, you do need to make sure the travel insurance plan you purchase would provide such protection or the activities or sports you are planning to engage in are covered with an optional rider. It would be prudent to consult your insurer or a licensed insurance intermediary before your purchase.
As travel insurance is designed to cover unforeseen events while travelling, losses or expenses incurred as a result of a pre-existing condition (e.g. your pre-existing health condition) would be excluded. For the same reason, suicide would be excluded for cover too.
2. Premium, excess and limit of indemnity
While travel insurance policies can always be purchased at a relatively low premium, it possibly consists of a higher amount of excess (i.e. the initial amount of the claim that is borne by you) or a lower limit of indemnity. It would be prudent to review the policy terms holistically to ensure the insurance plan meets your needs.
3. Emergency assistance services
You should have a copy of the policy and the contact details of your insurer’s 24-hour emergency service hotline number with you while travelling so that you can contact your insurer when necessary.
4. Claims handling process
While making a claim is unlikely to be at the top of your mind at the time you purchase travel insurance, you should review the policy and consider what documentation you need in case you need to make a claim. For example, if you make a claim for loss of personal money or other possessions, you are usually required to file a police report obtained in the location where the loss is identified. If you make a claim for damage to baggage or flight delay, you are usually required to submit a certificate issued by the relevant airport or air carrier in support of your claim. If you make a claim for medical expenses reimbursement, you would be required to submit receipts together with signed medical reports indicating diagnosis and date of attendance.
Many insurers require originals of receipts and other relevant documents in order to process a claim. Therefore, you should always ensure that you bring back originals of receipts and other relevant documents from your trip and retain a copy of them after your claim is submitted to the insurer.
It is also important that you are aware of the timing of making a claim so that your claim is not denied for late notification or submission.
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