A travel insurance policy offering comprehensive protection is crucial for a sense of security to consumers when on holiday. But consumers often tend to focus primarily on the amount of compensation from the insurance, and the extent of protection cover the insurance, much to the neglect of the vast variations that exist in respect of the claim requirements, the scope and definition, and the demand for the insured to provide supporting information and documents for insurance claims. In a survey on 18 travel insurance schemes, the Consumer Council has found a very high threshold set by the insurers in processing insurance claims, with varying standards in compensation payments and cumbersome procedures. Consumers are advised to compare and familiarize themselves with the terms and conditions so that should anything goes wrong during the journey, they can respond accordingly in obtaining the necessary supporting documents while abroad. Otherwise, regardless of the extensive insurance cover and the size of the insured amount, consumers may still end up without a successful claim.
In April this year, the Council approached 24 insurance companies for the survey and 16 firms responded accordingly, offering details on a total of 18 insurance schemes. The survey found individual schemes have different methods of calculating the premium, on the basis of such as the travel destinations and the duration of the trips. For the 18 schemes involved in the survey, a total of 44 choices at various benefit levels were found. A 7-day Japan tour, for example, the premium could range from $48 to $400, a substantial difference of 7 times. Among the schemes with the highest premium, their scope of protection and insured amount were found to compare unfavorably with the cheaper schemes, applying a more expensive scheme may not be good value for money.
The survey focused on claims arising from some of the common insurance covers – medical expenses, property damage, theft and robbery, travel delay and cancellation of trip, etc. The insured must adhere to the strict rules required for claims. For instance, in cases of accidental loss, robbery or theft, the insured must lodge a report with the local police within 24 hours. The claim application must be attached with the police record, outlining the incident in detail, the loss items and the total value, and if what has been described is not deemed to be covered in the insurance, the claim may not be processed further.
In respect of medical protection, the insured amount for the 18 schemes varied from $250,000 to $1.5 million. Again, consumers must pay attention to the terms and conditions for medical expenses claims. Should an illness or accident occurred during the trip, the insured is required to see a local qualified medical doctor for an initial consultation, and obtain a medical report as documentary proof. In the past, there have been complainants who suffered a skiing accident in Japan, and due to language barrier, the therapeutic service turned out to be provided by a physiotherapist. As the initial consultation was not conducted by a doctor, the insured’s claim for compensation was turned down in the end.
Further, consumers should pay heed that medical reports are needed in support of insurance claims that may involve fees and charges. In the survey only 1 insurance scheme would cover the cost of acquiring such supporting medical report; the rest require the insured to bear the cost themselves. As an example, the public hospitals in Hong Kong would charge each medical report close to $900, and as each travel destination and hospital has varying charges, the insured may need to bear such cost themselves.
Though claims related to property damage are common, the survey found that to successfully file a claim consumers are faced with often cumbersome conditions. Also almost every type of claims would require supporting documents for processing for approval. Some of these documents may have to be produced and completed locally. If one miss the chance to do so on the spot and cannot reproduce them, your claims for compensation may cease to go any further.
For instance, with regard to damage of baggage while travelling, the insured are required to produce photos showing the extent of the damage, the sales memos of the baggage, and also attach the property damage report issued by the transportation authorities. Before leaving the airport, the insured should therefore inspect the baggage and if any damage is discovered, immediately to file a request to the airline for compensation or to provide a proof of the damage. Only when the airport refuses to do so will the insurer accept related claims. On the other hand, if the journey involves train, ship or bus, and in the event of damage to luggage, the transport companies may not be willing to issue a loss report, and the insured may not be able to file an insurance claim.
In addition, the majority of the insurance schemes would request the insured to produce the baggage warranty certificate, or even an inspection report and a price quotation on the repairs by the commercial agent of the baggage. In the event that the insurer chooses to replace the baggage rather than repair, all the schemes will not bear the costs of the inspection report and repair price quotation incurred.
The Council again reminds consumers that although in general, travel insurance schemes are quite similar in their covers, the fine details in the policy may have different restrictive implications. Take the example of the personal money (cash) loss protection in the 18 schemes, with premium payments from $1,000 to $5,000, 11 insurers state that accidental loss of cash is not covered in the insurance. Though nearly all will cover loss of cash due to robbery, should the loss is defined by the police or the insurer as an offence which is not included in the insurance cover, the insured may stand to lose without compensation. For instance, during a trip to London, the insured was stopped and searched by a thug impersonating as the police, and later found the cash in his wallet missing. However, the insurer held the view that the case was a fraud, and not robbery, and therefore refuse to make compensation.
The survey found also that different insurers have different definitions for the insured items that may affect the chances of the insured’s claims. For instance, though all schemes accept claims for compensation relating to journey cancellation on account of specific incidents such as serious illness or serious physical injury, 5 of which have no definition on “serious”. The remaining 13 schemes require doctors certifying they are unsuitable for travel, among them 12 even require the doctor to certify that the life of the insured is in grave danger before qualifying for claims. Another scheme requires the doctor to certify the need for hospitalization of the insured.
In addition, all 18 schemes allow the decease of immediate family members as the reason for cancellation of travel and claims. But vast variation exists in the definition of “immediate family members”. All schemes include parents, children, spouse and parents of spouse in the definition for immediate family members. But some have imposed harsh terms that exclude brothers and sisters in the definition. The more broadly defined schemes will include not only siblings but grandparents and even grandson-in-law and granddaughter-in-law in the definition for immediate family members.
Consumers should be aware that such items as mobile phones and computer tablets which you carry around may not be included in the cover. Among the 18 schemes, only 7 offer handset protection while 3 would offer only such protection on condition of high premium payment. The insured amount is generally lower between $2,000 and $3,000. 9 schemes specifically do not cover computer tablets and 6 others exclude portable laptop computers. So choose carefully if you need to insure such electronic devices.
Flight delay is common in travel and is an important item for insurance cover. Generally, compensation will only be paid for delay more than 5 to 6 hours, and 1 scheme will offer cash allowance for delay of 8 hours or more. As a rough estimates from the statistics on the 495 flight departures from Hong Kong on May 1, close to 70% (332 flights) have experienced delays but in only 1 flight the delay was more than 5 hours, reflecting the low possibility of consumers ever receiving compensation for flight delay.
Even though the insurers’ claim adhere to the conditions for compensation with required documents, they should also note the period for claims and the related computation. As for the limitation period for claims, among the 18 schemes surveyed, 13 commence the claim limitation period from the day of the incident while 5 others from the day at the end of the trip. Between the 2 schemes with the most variation, one sets 21 days after the incident to file the claim while the other within 31 days on completion of the trip. In the former, the insured’s trip was to last 3 weeks and if unfortunately the incident occurred right at the start of the journey, the insured will have little time left during the trip in preparation for his claim.
Consumers are reminded that although travel insurance premium usually does not involve a big sum, consumers should not take the insurance lightly. They should read carefully the terms and conditions for a clear understanding of the insurance cover and the definitions. Before departure on your trip, download the relevant information on to your mobile phone, or other on-the-go electronic devices, and keep the insurer’s hotline phone number handy for easy reference of the claim requirements should the need arises. Furthermore, follow with due care the claim procedures and the need to prepare and obtain the necessary documents and information, to ensure your chances of success for compensation.
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