How to survive an insurance claim

Best way is to get an agent to simplify the legalese for you at the point of purchase

Filing an insurance claim can be unpleasant. Nobody buys insurance hoping to make a claim. Rather, the idea is to take a sensible precaution.

Sometimes, insurance claims get denied. That's probably a favourite factoid of people who "don't believe" in insurance.

But the conclusion here is not that you should shun insurers altogether. Nor would it make sense to buy blindly into every form of coverage you're tempted by.

My guess is that a fair number of inconveniences with claims departments arise from misunderstandings at the point of purchase - mistakes that could easily be avoided.

To foolproof your coverage, it's not enough to glance over your policy and feel like you understand it. You have to pay attention to ambiguities in language and check, perhaps with the help of an agent, if your interpretations are actually correct. At least, that's what I've learnt from experience.

My father was knocked down by a motorcycle in Ho Chi Minh City recently while there on business. He tried to cross the road at Ben Thanh Market, and right as he stepped off the kerb, he was flung into the air.

When he landed, his ankle was dislocated and fractured.

Some members of the public lifted him into a taxi.

Using his smartphone, he found the address of a private hospital and showed it to the driver.

He then informed our family and my mother flew to meet him.

Upon her return to Singapore, my mother braved a storm of paperwork, making copies of documents and personally turning in my father's claim form at the NTUC Income office in Eastpoint Mall.

He had bought a policy called "Personal accident/infectious diseases insurance" from NTUC Income online a few years back.

My parents sought to claim two items from Income: "daily hospital income" and "weekly cash".

The insurer rejected their application for "weekly cash", which confused them until we read the policy again, closely.

Although one of the benefits listed on the policy cover is "weekly cash", the details are in the pages carrying the policy conditions: "If you are given medical leave by a medical practitioner or a relevant authority asks for you to be quarantined, confined or isolated because of an infectious disease you contract, we will pay you a cash benefit as shown in the schedule."

The next paragraph lists what NTUC Income does not pay for.

It won't pay you if your medical leave or confinement is for less than seven days in a row. It won't pay you if your quarantine was self-imposed.

Can you claim weekly cash if you were placed on medical leave as the result of an accident?

The answer is no: "We have assessed this portion of the claim and given it much consideration. As the medical leave is not due to an infectious disease, your claim is outside the scope of cover and hence not payable."

Bummer. Be good to read more carefully next time.

To allay all doubt, however, the best idea would be to get an insurance agent who can simplify the legalese for you and answer all your questions.

But at least the lesson didn't cost us.

My parents' hospital income claim will be approved, although it is taking a while because NTUC Income asked to be provided with a copy of my father's flight itinerary - a request that was not on their claims form checklist.

More importantly, my father had bought travel insurance from another provider before his trip.

The claim limits for travel plans tend to be higher than most personal accident plans, so my father's medical expenses were adequately covered.

The AIG Travel Guard Superior also covered his airplane ticket upgrade to business class for emergency medical evacuation and follow-up medical expenses incurred in Singapore.

Of course, you would be covered by your personal accident insurance even when you are overseas but there is an argument for travel insurance.

The cost of treatment overseas is higher and you would want to match that with higher coverage. Some personal accident plans cover emergency medical evacuation but not everything.

Where the coverage for travel plans and accident plans overlap, such as reimbursements for medical expenses, the rules are that you cannot claim reimbursement twice. So you would have to make sure to submit your claim to the policy with the higher claim limit.

Benefits, however, like "daily hospital income" and "weekly cash" to tide you through your downtime, can be claimed from more than one insurer.

The weekend we got Income's rejection note, I went online but couldn't find much on Income's "Personal accident/infectious diseases insurance". I later found out from my friend Sarah, who is an independent financial adviser at Financial Alliance, that NTUC Income had since upgraded its plan to PA Assurance, which pays weekly cash upon accident.

"But we were not informed," I said.

My father had bought the NTUC Income policy from a telemarketer in 2010 and renewed it every year since.

It would have been nice if someone had told him there were new options, or just mentioned it in his annual letter discussing policy renewal.

"That's why you need a consultant," she said.

Of course she'd say that. But she had a point.

I asked Sarah how to select a good personal accident plan.

It's actually not difficult. In fact, accident plans are one of the simplest types of insurance, she said.

Basically, you want to check that the medical expenses reimbursement is paid out per accident, not per year.

Many plans also offer reimbursement for traditional Chinese medicine (TCM) expenses.

Then, check if the payouts for these and other items are high or low compared with what other insurers are offering.

Compare the premiums too, to make sure the plan as a whole is cost-effective. Decent plans can be bought for as cheap as $107 a year.

Check against two to three other insurers before making a decision. A good consultant can do it for you too if you have no time.

A responsible consultant should also help you through the hardest part of all - making an insurance claim.

We were lucky because our AIA consultant Elida helped my mother with this, including explaining to the AIG officer who had asked for a police report that this information was not relevant because traffic accidents in Vietnam don't work like that.

As for my father, he will be on crutches for a while. He has developed a fear of crossing the road but is otherwise the same guy.

One day, when we were in a crowded lift, a small girl in a flouncy dress noticed his bulky walking boot and gasped: "Wei shen me? (Why?)"

He told her he was Iron Man.

To foolproof your coverage, it's not enough to glance over your policy and feel like you understand it. You have to pay attention to ambiguities in language and check, perhaps with the help of an agent, if your interpretations are actually correct.

A version of this article appeared in the print edition of The Sunday Times on September 10, 2017, with the headline 'How to survive an insurance claim'. Subscribe