This is why travel insurance is a must

Travel insurance is often seen as an additional expense that can be altogether avoided if travellers are careful.

Rene Brits, commercial underwriter at Garrun Group Insurance Brokers, disagrees and is perplexed by how travellers are willing to spend thousands on airline tickets and hotel accommodation, but they don’t take proper precautions in case disaster strikes.

Brits is responsible for evaluating insurance risks and she’s been working at Garrun Group for the last 15 years.

She explains, “Your medical aid might cover the cost of the medical bills received in foreign currency, but it might not cover the extended stay or the expenses of changing flights, also payable in foreign currency, because a traveller is not fit to return home after a medical emergency.”

“What about an upgrade to a business class seat because of a broken leg due to a skiing accident or stolen passports and loss of currency when a wallet is pick-pocketed? Who will provide assistance when your bag with passport and cash has gone missing on a train ride to Spain and you cannot buy a meal or even make a phone call? Travel Insurance is the most important part of the trip,” she adds.

Brits believes that travellers who cannot afford travel insurance should reconsider travelling at all because there are too many risks involved.

Some of the consequences of travelling abroad without travel insurance includes being stuck in a foreign country because you cannot afford to pay your medical bills, being restricted to your original travel plans when there is an emergency back home, and being left without accommodation when your flight is delayed.

“If you are involved in a serious accident and you don’t have medical cover in place, you might not receive proper medical care and you could die abroad, which will then (if you travelled without travel insurance) leave your family with the cost of returning your mortal remains,” says Brits.

She suggests that before travelling abroad, people need to consider the following:

• What is the medical limit on the travel insurance policy and is this adequate?
• Is the cover period limited to a certain number of days only?
• Does your travel insurance policy include cover for pre-existing conditions?
• Are there any age restrictions?
• Do you require additional cover for a hazardous pursuit such as cycling, skiing or even swimming?
• Are you travelling to dangerous countries at war?
• Does your travel policy cover acts of terrorism and what is covered i.e. medical costs or also cancelling or curtailing your journey as a result of acts of terrorism?
• Is a travel insurance policy a requirement when applying for a visa?

Limit is too low

In some cases travellers are covered for their medical expenses, but they are limited to an unrealistic figure when considering the exchange rate.

“Cover of R1 million to R2 million for emergency medical expenses is simply not enough,” says Simmy Micheli, marketing and sales manager for Travel Insurance Consultants (TIC).

“For example, we had a recent claim in Switzerland where a client fell ill with pneumonia and passed away – the total claim amounted to R1.4 million.”

In another incident, a traveller on a business trip to China collapsed with a cerebral haemorrhage during a conference and fell into a coma. Her bill, including her return to South Africa, reached R4.5 million.

And a traveller in Canada was involved in a serious car accident. Fortunately both parties were covered and the claim amounted to R5.5 million.

Travellers also need to be cautious when relying on automatic credit card insurance for travel purposes.

According to Annelie Smith, executive head at Risk Benefit Solutions (RBS) Insurance, “They have limited cover because they buy a one-size-fits-all policy, with very limited options or cover extensions.”

Emergency contact number

She believes that people look at price instead of the cover that they will receive for that price, and they are often unaware of the advantages of travel insurance.

“The main benefit is the fact that you have a central point to call for assistance and they will help and guide you through any traumatic situation you find yourself in,” says Smith, who has 28 years’ experience with insurance.

“When you buy travel insurance you’re given an emergency number. If you call it, a person calms you down and tells you exactly what to do according to your policy. The same person will also speak to the hospital, arrange for the money to be transferred, and ensure that everything goes smoothly,” she explains.

“All travel insurance companies have an international network that provides support behind the insurance companies. A critical part of that centre is to help you through that whole process. They are worldwide and they can ensure that doctors in foreign countries assist you,” she adds.

Kidnap and ransom insurance

Another concern when travelling abroad is being kidnapped and held for ransom, especially when someone represents a large company or if they are known to be wealthy.

“If you go into a dangerous environment, I would suggest that you get kidnap and ransom insurance, just because of the possibility of something happening,” says Smith.

This interactive map, published by International SOS and Control Risks, shows which countries are considered high or low risk areas in terms of medical risk rating and travel security risk rating.

“On travel policies you get very little cover in terms of ransom situations or kidnappings – maybe R1 million. However, the cost for a negotiator per day could be in excess of R1 million and that’s why most families cannot afford to employ a negotiator to assist them with the process,” says Smith.

Are you covered for extreme sports?

According to Konrad Laker, CEO of Cape Town based travel company Gold Travel, standard exclusions apply to travel insurance.

“If you go overseas and you want to go skydiving, a normal exclusion will apply. But standard sports, like scuba diving and skiing, are included on condition that you do it with a licensed person,” says Laker.

“Something else, that is very rarely used, is that with travel insurance you’ve got personal indemnity cover as well. So if you are liable for the injury to another person and you’re being sued by that third party, you would be covered for that,” he says and adds, “The little fine print does not always go against the traveller!”

Ultimately, it’s important to take out travel insurance with a reputable company and beware of going for the cheapest option as it’s not always the best option for you and your specific travel needs.