Don't leave home without insurance

Experts offer five tips for those planning a holiday, no matter how short or near home

The shocking events in Paris are a harsh reminder that travelling overseas can suddenly become very complicated, with unseen danger lurking in unexpected places.

They are also a warning that adequate travel insurance is just as important as our passports when heading out. These policies cover the usual risks such as loss of baggage and medical expenses for accidents and illness but, as the Paris attacks show, things can take a drastic, unexpected turn.

It is vital to ensure your coverage is valid even if you are caught up in events such as terrorism.

Travellers may want to cancel trips at the last minute, or they might get stuck abroad - in which case a travel policy that offers the option of extending the cut-off date would benefit them.

Ms Koh Yen Yen, head of Tenet Sompo's personal insurance division, recalled that in the past, terrorism would typically be a standard exclusion in travel plans.

BE FULLY PREPARED

In the light of events such as the Paris terror attacks, do look out for policies that provide full terrorism coverage - chemical, nuclear and biological.

MS KOH YEN YEN, head of Tenet Sompo's personal insurance division, on buying travel insurance

Today, most comprehensive travel plans include terrorism as part of their main offerings.

However, the terrorism cover in some plans may exclude losses related to nuclear, chemical or biological events.

In the light of events such as the Paris terror attacks, do look out for policies that provide full terrorism coverage - chemical, nuclear and biological, says Ms Koh.

Experts advise travellers to consider this and other issues carefully when looking for a policy.

The good news is that it does not cost an arm and a leg to buy travel insurance. A three-day travel plan to shopping destinations such as Thailand, Hong Kong or Taiwan, for example, starts at $33.

Here are the top five tips when shopping for travel insurance.

BENEFITS AND COVERAGE OF YOUR PLAN


Whether you are going skiing, taking a road trip or enjoying a novel experience, you should prepare for every type of possible holiday mishap and buy the appropriate insurance cover. PHOTOS: REUTERS, SWITZERLAND TOURISM

It is important to know the cover you need and ensure it is included in the plan you choose, says Mr Derek Teo, General Insurance Association's executive director.

In some policies, for example, the territorial definition of Asia is very limited, and some have an age limit or restricted benefits beyond a certain age.

Tenet Sompo's Ms Koh says it is prudent to select a plan that suits the trip's activities. This includes ensuring there is winter sport coverage if you are going skiing and a rental vehicle's excess cover if you are on a self-drive trip.


Whether you are going skiing, taking a road trip or enjoying a novel experience, you should prepare for every type of possible holiday mishap and buy the appropriate insurance cover. PHOTOS: REUTERS, SWITZERLAND TOURISM

Some people take advantage of complimentary travel insurance offered by credit card companies when they pay for their flights with plastic.

Mr Brandon Lam, head of insurance products, consumer banking group at DBS Singapore, says that while such plans can be helpful, you should check what they cover as they may not be comprehensive. Also, they may only offer personal accident coverage for any resulting death and disability.

OVERSEAS AND LOCAL MEDICAL EXPENSES, EVACUATION AND REPATRIATION

This covers medical expenses incurred overseas and follow-up treatment once back in Singapore, including hospitalisation. Some insurers even cover treatment by traditional Chinese physicians.

The cover would typically include expenses incurred if the initial treatment was not sought overseas but was administered within five days of the return date and for up to 30 days.

Ms Koh warns that in Asia, medical treatment could cost up to 10 times more in a foreign-run hospital or clinic than one run by locals.

She also suggests that you consider a higher medical expenses cover when travelling to places like Japan, the United States and Europe.


Whether you are going skiing, taking a road trip or enjoying a novel experience, you should prepare for every type of possible holiday mishap and buy the appropriate insurance cover. PHOTOS: REUTERS, SWITZERLAND TOURISM

Note that evacuations are costly because they include conveyance, an accompanying doctor and nurses, medical supplies as well as third-party costs to move you back home or to a hospital better equipped to render the treatment.

If a person dies on a trip, there is also cover for the expenses of returning the remains to Singapore. In addition, it covers the expenses of a relative or friend travelling to the scene if assistance is required with the arrangements for repatriating a person's remains.

Medical expenses top the list of claims for both AIG and Tenet Sompo. In fact, about 40 per cent of claims are medical-related expenses at these two firms.

An AIG-commissioned travel survey in April found that claims for lost or damaged baggage came next on the list, at 28 per cent; travel delays made up 17 per cent; and baggage delays 13 per cent.


Claims for lost or damaged baggage, travel delays, and baggage delays featured in a travel-related survey commissioned by AIG this year. ST FILE PHOTO

One of the highest claims Tenet Sompo had resulted from an elderly couple who met with a road accident while on vacation in Haikou, China. Both sustained multiple injuries and were immediately operated on. Unfortunately, there were complications after the surgery and one died after being evacuated from Haikou to Singapore.

The claims for medical-related expenses and evacuation came to $175,000, and a sum of $250,000 was paid to the family for death and permanent disablement.

KNOW THE EXCLUSIONS

Common exclusions include pre-existing illnesses, self-inflicted injuries, radioactivity from nuclear materials, war, travel to specific countries such as Afghanistan and engaging in hazardous/ military/sport activities.

Riots and civil commotions are usually excluded, although most policies may cover travel delays and trip cancellations resulting from such incidents.

BUY TRAVEL INSURANCE AS SOON AS YOU BOOK YOUR TRIP

Ms Anita Tan, head of AIG Travel at AIG Asia Pacific Insurance, says most people buy insurance only in the last few days before travelling.

"It is advisable to buy travel insurance when you book your trip, so that you are covered for unexpected incidents that arise even before you start your trip," she adds.

For example, if you have to cancel your trip due to an illness or if your tour operator suddenly goes out of business before your trip, travel insurance can cover you.

Mr Teo says a claim over the insolvency of a travel agency is payable only if cover is purchased for a period of time before the commencement date of the trip.

AIG's travel insurance survey highlighted that about one-third of Singaporeans believe insurance is not necessary for holidays of under three days or for travel to a neighbouring country.

In reality, travel mishaps can happen anywhere and at any time. For instance, AIG paid a $75,000 claim last year for hospital expenses and emergency medical evacuation from Thailand to Singapore.

AIG customers made more than 7,500 claims when travelling to destinations like Thailand, Hong Kong and Taiwan in the 12 months to Oct 30.

TYPES OF TRAVEL PLANS

If you make multiple trips in a year, it is worthwhile considering an annual policy instead of a single trip cover as it is more economical and convenient. In addition, there is no need to worry about forgetting to get insured, Mr Teo says.

If you are travelling by yourself, you should opt for individual cover. And if you are travelling as a family with children below the age of 18, choose a plan that offers family cover, Mr Lam advises.

A version of this article appeared in the print edition of The Sunday Times on November 22, 2015, with the headline 'Don't leave home without insurance'. Print Edition | Subscribe