While one is on vacation, accidents and tragedies can happen. Should you get travel insurance, asks DEEPAK GILL?
WHILE vacationing in Vietnam, you suddenly step on a landmine and are rushed to a hospital that’s understaffed and ill-equipped. You could end up crippled – what do you do?
Luckily, you’ve bought insurance, and your travel insurer steps in and flies you home in an air ambulance without any cost. Situations like these may be rare but you had better be ready for them.
Many seasoned travellers live by the motto ‘Be prepared!’. When on the road, things can happen that you haven’t accounted for, but you can take precautions. One of them is by purchasing travel insurance. Some people think it is unnecessary, others think it’s a must. But it seems certain many Malaysians don’t know what travel insurance is all about.
The ignorance is surprising and the take-up rate is still low, but it is climbing.
You can purchase your insurance from a travel agent or an insurance broker. Filling in the form takes just two minutes or so. Some international airports have counters selling insurance; others even have insurance vending machines.
What’s the deal?
Travel insurance covers situations that might arise while travelling, such as emergencies, medical evacuation, loss/theft of money and personal belongings, flight cancellations and delays. For a small premium, you can be covered for up to RM300,000 in medical expenses (all figures based on Aviva Insurance’s policy, TravelRight).
Premiums are from RM30 for five days, depending on the destination. Periods of insurance tends to be between five and 31 days, with additional weeks options. Once you are insured, there is always a 24-hour reverse-charge service line to take your calls. Credit card companies often offer free travel insurance with ticket purchase, but the coverage is usually not adequate.
Any overseas trip should, by right, be insured. Hospital admission in Europe, for example, would be beyond our means. There is no free hospitalisation there, and this is where insurance policies are a godsend.
Some Personal Accident (PA) policies may cover medical bills, but not necessarily outside the country. And the free travel insurance offered by some companies cover only loss of luggage and flight problems.
Check the terms of your PA and other policies to ascertain if you need short-term travel insurance. Such a policy would, among other things, reimburse lost deposits should you cancel your trip due to illness, a death in the family, and some such thing. Bear in mind that travel insurance tends not to cover ‘hazardous activities’ like rafting, rock-climbing, jet-skiing, hang-gliding, and sometimes even riding a motorcycle.
If so, it’s best to take additional coverage.
“A rider policy can be customised for such individuals,” says Lorraine Chan, a financial and investment planner.
“This is a specialised personal accident one, not a travel policy. But it would cover you for hazardous activities while overseas too.”
Chan says the premium will depend on the activity.
Activities like jungle trekking, hill treks and cycling are normally covered by travel policies. If you get hurt, your medical expenses are covered, but not your flight home if you have to miss it – you should inform the airline and see about a postponement.
As far as personal items and luggage go, most policies allow you claim up to only RM5,000. And only if the loss is not due to negligence, i.e. it has to be stolen. And stolen from you personally. If your room is burgled, you get nothing, unless the items were in a safe.
Misplacing items, being negligent or ‘mysterious disappearance’ are not claimable instances.
You’re also entitled to claim RM200 for every eight hours of flight delay and RM600 for luggage delay of eight hours so that you can purchase essential items. Conditions include reporting to the airline and keeping receipts. But luggage delay is normally not claimable if you’re on the return journey home, whether or not there’s transit.
Certain insurers offer reimbursement for legal expenses if you need to engage a lawyer, up to RM50,000. Most cover acts of terrorism. Note that if you buy the policy in Malaysia, certain insurers will not cover your trip if you leave for your destination from elsewhere – via Singapore instead of from Kuala Lumpur, for example.
In an SOS
If you get hurt in an accident, the insurer’s contractor or ‘ground handler’ will be the ones to deal with over the phone, such as International SOS (ISOS; www.internationalsos.com). Its representative will assess the situation and report it to the insurer. If the victim can be treated locally, he will be required to stay on.
The final decision whether or not to evacuate a person rests with the insurer. Some of the factors weighed include the victim’s medical condition, injuries, the facilities available locally, and whether he is fit to fly.
In a recent bus accident involving Malaysian tourists in China, Aviva Insurance flew some victims home for treatment “as this was in their best interest”, says assistant general manager (business services) Bernard Ong. Sometimes what they do is fly a family member to the victim.
Bodies will be flown home up to a maximum expense of RM5,000.
“Based on Aviva’s record, we have one emergency medical evacuation every year for a Malaysian and the cost per event ranges from RM10,000 to RM200,000,” says Ong.
Insurers offer hospital allowances too – from RM150 to RM350 per day, for each day you’re hospitalised. If you require follow-up treatment in Malaysia, you’re normally covered for 30 days, capped at RM30,000.
Claims are normally a straightforward affair, assuming the insurer is satisfied. “We approve legitimate claims within seven working days upon receiving fully completed claim forms and relevant documents,” assures Ong.
For some losses, a police report needs to be lodged within 24 hours of the incident. The most common claim is for the loss of luggage, followed by missed flights and trip curtailment.
“Most claim disputes are on the quantum of claims or because the claimant did not understand the extent of the insurance coverage,” reveals Ong. “We have a feedback and complaints system for our customers.”
Aviva CEO Song Yam Lim says, “Sometimes we give the benefit of the doubt to the claimant.”
The governing authority on insurance-related disputes is Bank Negara, via its Financial Mediation Bureau (% (03) 2272 2811).
One of the exceptions to claims is if you were under the influence of alcohol. Does this mean if you get hit by a falling crate after a beer, your policy is not valid?
“A beer would be fine!” says Song. “It depends on whether it had any influence over your situation. If you were hit by a car while crossing the road drunk or stoned, the insurance could be void.
If you’re able to make a full claim against another party, e.g. the airline for lost luggage, you can’t claim again from the insurer. However, if you feel the claim ceilings are too low, you could buy an additional policy from another insurer, which will effectively double the coverage.
Note that in most cases, you’re only entitled to the actual loss you suffer, not the maximum claim.
“You should not seek to profit from a travel policy,” says Song. Probably the only time you can hope for money without actually incurring expenditure first is upon death or disablement (up to RM200,000).
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