A Review On Travel Insurance - Do You Need It Or Not?
Personally I think it would be very foolish not to have some sort oftravel insurance, especially if you are flying abroad. People sometimes
make the mistake in thinking that their local insurance policies will
cover any losses and have a big shock when they come to make a claim.
Besides, if you have the right policy, it takes all the worry out of
your trip.
You should always be offered insurance, by your travel agent, when you
arrange your trip. If not, ask, because it will be on your own head if
anything goes wrong.
A Cheap Policy or Not?
When a travel insurance policy is issued there are a number of
allocations if the premium, agents commissions, administrative costs,
some goes towards profit and what's left over goes towards the actual
insurance coverage. So, you can see, if it's a cheap travel insurance
policy, something is going to miss out and you can bet it will be the
level of coverage.
If you buy a regular travel insurance policy, that is, you fill out a
form and send it to the insuarance company with your remittance there
are a lot of costs involves. A better way would to get a wholesale
policy (which travel agents do sell) where the administration costs are
dramactically reduced, meaning more money is spent on the actual
coverage.
Some tour operators and agents provide an "in-house" travel insurance
policy and, often, all it covers is their own cancellation fees and
little else. It may be cheaper but will not give you much travel
insurance coverage.
Another way to reduce costs, which depends on the level of travel you
are going to do, is to purhase an annual travel insurance policy. This
is buying in bulk and is likely to be much less expensive than the
one-off trip policy.
Primary or Secondry Travel Insurance Cover?
These 2 types of cover determine the way the payouts are made. The
primary travel insurance cover means that the company will "Pay First",
that is the payment will be paid to the claim maker. The secondary
travel insurance cover means they will pay only after you've have
claimed as much as you can from other insurance cover that you may have.
So, you can see that the primary cover is a lot better than the secondry
cover.
What Type Of Coverage Will You Need?
It's fair to say the 2 biggest risks that are covered by most travel
insurance policies are the costs of changing your travel plans and and
any medical care and emergency assistance that is required while you are
away.
Most travel insurance policies will include a few hundred dollars for
baggage/loss/damage/delay, loss of travel documents and other small sum
for flight delay or interuption. Some will also cover for someone to fly
out to you if you are to be hospitalised for more tha 2 or 3 days.
Another major cost, and I must admit I never thought of this one before,
can be supplier bankruptcy. Many time the supplier of your travel
insurance policy are unable to have the policy to cover thier own
bankruptcy. This would be another good reason to have an independant
policy from the company arranging your travel.
Most travel insurance policies include a large ammount of air death
insurance, but surprisingly, it's of very low value item about 25 cents
for a $100,000 cover. I suppose this indicates how safe air travel is.
Some travel isurance policies will also cover car rental risks and this
may be an important thing to consider as car rental insurance policies
are extremely expensive.
Trip Cancellation/Change Coverage
To understand the possible costs that you may need if you have to change
your itinery or cancel the trip, if you have pruchased an unrestricted
first class ticket there may be not any costs associated with changing
the ticket as this is usually covered in the purchase price.
It may seem strange but the the cheapest ticket has the most risk
attached to it as far as cancellation/change is concerned. It can cost a
heap more to change the cheap fare to return home on a different flight
than the original purchase price of the ticket.
You will have to be aware that when some travel insurance policies state
that they will cover 'your total trip cost' you may think that the full
charges are covered, but this may not be so. Let's say that your
discounted fare cost $590 and you have a package that actually costs
$895 and you have to change you may find the return trip will cost more
than the whole package. Maybe you will have to pay another $1120 to get
home on a no advanced one way return ticket.
I had this experience a few years ago when I had to rush home for my
Father's funeral. Because of time restrictions I had to buy a
non-discounted ticket. After not feeling well all day, when I finally
arrived at the airport I succumbed to a middle ear infection. So with
all the vomitting and the different air pressures that come with flying
there was no I could get on a aircraft. But, as I had purchased a full
fare, there was problems in changing my flight to the next morning. Goes
to show that you can't always control your circumstances.
The more restictive travel insurance policies may exclude circumstances
that are deemmed 'under your own control', and perhaps this may include
work related issues. Let's say you are about to leave work and you are
told there is an issue that has to be solved and that you leave has to
be deffered. There's a very good chance that this type of travel
insurance would no pay out because of this reason.
Medical Care and Emergency Assistance
Some people mistakenly think that their home medical insuarnce policy
will cover all costs wherever they are in the world. They may find that
that it doesn't cover at all, or the deductions will be much higher or
perhaps their medical costs are covered but not any related transport
costs.
You may be on a cruise and you need some medical attention by the ship's
doctor. There is a good chance that their services are charged for as
with any other doctor. You may have to be flown home on a stretcher and
this will involve blocking out nine seats, can you imagine how much that
would cost. You should make sure that you have travel insurance of at
least $10,000 or more to cover these emergencies. Let's imagine you are
in a remote area and you break a leg and you need to be lifted out by a
helicopter, this is what good travel insurance is all about.
To Summarise
Imagine your worst case travel mishap scenario and decide whether you
need travel insurance. This may be the cancellation of the whole trip
coupled with the associated cancellation costs or some emergency medical
mishap that will require medivac and local care. I know these are
horrible thoughts but if you can't afford to self-insure the expenditure
of around $100 on travel insurance will give you the piece of mind and
one less thing to worry about.
