Too many people think that all travel insurance is the same. It's not.
Vast differences exist between the claim-paying philosophies of the insurer, the selling practices of the distributor (or agent), not to mention the emergency assistance companies and global networks that support the industry. Thinking that it’s all much-of-a-muchness, 98% of customers don’t read their Product Disclosure Statement (PDS for short) until the moment of truth at claim time, to discover whether or not they’re covered!
But I just need a policy that covers…
Many people think, reasonably but incorrectly, that the ‘best’ travel insurance is the one that suits their immediate problem. For example, if I’m going skiing, I might check that the policy I buy covers skiing accidents. If I’m pregnant, I want to be sure I understand what cover I do and don’t have, and if there are any exclusions. If I’m going scuba diving, or renting a moped, those can be ‘special’ activities with limited or no cover in some policies, or require the payment of an additional premium.
People who take lots of ‘stuff’ on their trips want to be sure their policy has cover for luggage and devices. A few who do this submit fraudulent claims to either recoup the cost of their premium, get a new smartphone, or both. “I accidentally dropped my phone.” “I mistakenly left my iPhone behind at the bar.” No proof of loss, no police report – nothing but the word of the customer. If this type of cover is ‘best’ for you because you want accidental losses covered, then read your PDS carefully – not all policies cover these types of losses!
To confuse you further, most travel insurance policies pile on a heap of additional benefits so it can also seem like you’re getting more from them. The problem is that no one really understands what these benefits cover until claim time. For instance, nearly all travel insurance policies offer a ‘return of mortal remains’ cover. But no one buys travel insurance thinking they’re going to die while they’re away! So no one reads this section…until someone does die. Same is true for the ‘accidental death’ benefit. Accidental death cover is included in some policies, but it’s unlikely to be the reason you choose to buy that travel insurance. Although, if you’re in your 80’s or 90’s and going overseas, return of mortal remains cover may be more important, and something you want to consider.
Does anyone really care about “hijack cash”? The world has moved on, but policies have not.
What should I look out for?
Travel delay cover and the limits for travel delay benefits is often overlooked. Before March 2010, travel insurers didn’t worry much about volcano-caused delays because they hadn’t really been a problem up to then. With the growth in global aviation, and 15+ hour flights, the whole world was seemingly interconnected within a decade. So when the Iceland volcano caused Heathrow and other major northern European international airport hubs to shut down, the ripple effect was felt globally. Thousands of travellers found a way out of the UK via any means other than a plane, to get to France or other southern European airports that were not affected by the Iceland ash cloud. Many travellers racked up huge bills due to extended stays in hotels, meals, and transport costs to get to another airport, and then buy a new ticket (because the old one certainly hadn’t been refunded yet).
To avoid a catastrophic loss across a travel insurance company’s portfolio, lots of companies limit cover for travel delay to $1,500 or $2,000. In my view, this is wholly inadequate to cover any delay of longer than say 2 days. It’s critically important cover in this day and age of erupting volcanoes, natural disasters, and climate change events throughout the pacific rim, but its importance is lost on most…until it’s too late.
The best travel insurance policy is…
The ‘best’ travel insurance policy, in my opinion, is the one from a company that proactively manages your case from the outset. They pay your bills for you whenever possible, and have already prepared to ‘rescue’ you long before you’ve departed. In other words, they’ve planned your rescue in advance. They’re the ones that say “Call us first” before you call the hotel doctor, or wander down to the local foreign clinic to navigate a foreign healthcare system all on your own – “a stranger in a strange land” engaging with a strange system. Buy the ‘best’ travel insurance from a company that doesn’t want you to embark on that journey without help, more importantly without local help, because healthcare in every country is different. Cultural differences abound!
Another ‘best’ feature of a great travel insurance company is one that can communicate with you via a wi-fi connection like Facetime video with a doctor from back home, quickly, easily, and for free. That early advice can be the difference between getting scammed in a corrupt foreign healthcare scheme vs. being directed to a trusted clinic. (Check out ‘Unnecessary surgery scams‘ for more about this).
The ‘best’ travel insurance company is the one that knows who is going to rescue you, before ‘it’ even happens!