Monday, December 10, 2012

How important is travel insurance?

Most of us realise that we need to get travel insurance when we travel.  Indeed some destinations require appropriate travel insurance before they will issue you a tourist visa and almost all guided tour groups require adequate travel insurance.

However, I think because we often see it as a requirement of travelling (just like a visa) and not a product with pros and cons, we often go for the cheapest option and not the one which is the most appropriate.

Why is travel insurance so important

There are several well know and documented reasons for having travel insurance however there are some areas of coverage that you may not know about (which actually come in useful)

  1. It covers your hospital bill in the event that you get sick overseas
    • This is the one that everyone knows is important
    • Hospital and medical cover for citizens is normally subsidised however tourists and foreigners normally cop the full hit.  This is definitely the case in Australia where citizens and permanent residents pay virtually nothing for hospital treatments however tourists get charged thousands of dollars for the same operation
    • This alone makes travel insurance worth it - it is not worth penny pinching on travel insurance (or on a provider that may not pay out) when there is the risk that you may get sick overseas
  2. It often covers lost or stolen property
    • Most people know that it covers stolen property however are unaware that they need to do certain procedural things (like file a police report in the place that the items were lost or stolen) before they can make their claim
    • The best thing to do is to carry a copy of your policy along on your holiday so you can work out exactly what you need to do in the event that you want to make a claim when you go back home.
  3. If often covers the cancellation costs of your tickets and tours if you need to cancel your holidays
    • I did not realise that this was a common form of insurance coverage - and it was one that I personally had to use
    • If you have to cancel for any of the prescribed reasons in your insurance policy (e.g. you get sick before you go, you fail your exams and need to stay back to sit supplementary exams - I'm not kidding - that is actually a prescribed reason on many policies) then the insurance policy will pay out the non refundable amount on your ticket and tours
  4. It covers accommodation / living costs if you get stuck
    • Invariably things go wrong on holidays and if you are stuck beyond a certain period many insurance policies will cover a certain amount of your costs
Given it is important - make sure you go with someone that WILL actually pay out when you need it

As I have said several times before, it is no good getting the cheapest insurance if they are not going to pay out on your policy if you really need it.  At the same time, paying a premium for someone that will pay out versus someone else that will pay out is just silly.

The best thing to do is to get recommendations from family and friends who have actually had to claim on their travel insurance.  Do not just ask who they used - if they never had to claim then their information will be useless.  

I used Cover-More travel insurance and they refunded my money (after submitting all the required forms etc) without a problem so I personally can recommend them as I had quite a good experience with them.

I have always been tempted to use the free travel insurance that comes when you pay for your ticket using some credit cards however given how important the insurance is and I've never found anyone that has had to claim this insurance, I have never actually done it.  If you have please let me know - it would be interesting to hear your experience

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