Darren Reilly, Commercial Adviser at IOOF Insurance Brokers, discusses practical travel insurance tips and traps for the coming holiday season and how to ensure your holiday really is covered.
Every year many of us travel domestically or abroad and mostly it’s a relaxing and pleasant experience, however, things can go wrong. Sadly, it’s often at this point people often discover they haven’t properly protected themselves from the financial repercussions of an accident or mishap.
In this article, we look at common travel insurance traps for the unwary as well as some handy tips that could save you money.
Medical costs can be very high
The largest potential costs you are likely to face if something goes wrong on holiday are medical. In Australia, our public health system means many people have no idea how much medical care can cost in other countries. A night in a hospital in the United States will cost over $2,000. If you have to be transferred to hospital from somewhere like a ski resort using a helicopter the costs can be extremely high. Of course, at a time of medical emergency, the last thing you or your family will be concerned about is the cost. The costs incurred will be non-negotiable and it’s very likely there will be no choice when it comes to selecting a healthcare provider or ambulance service.
Medical coverage tip
Using an insurance broker means you can have your insurance tailored so you’re still protected from certain pre-existing medical problems. As you would expect, the premium is likely to cost more but it means travel is still an option even if you have had medical problems.
Medical coverage trap
Non-tailored insurance will normally exclude a wide range of pre-existing medical conditions. This could mean you are left unprotected because you had no idea you had a pre-existing medical condition. Heart conditions often fall into this category because the condition may have been present but undiagnosed.
‘Free’ travel insurance with credit cards – potential trap
Many financial institutions now offer travel insurance bundled with their credit cards. This type of promotion is popular, but the terms and conditions need to be checked carefully as in some cases you are required to buy almost everything on your credit card. This may not be a problem as a credit card is often a suitable and convenient way to purchase flights and accommodation. Do not expect the coverage to be particularly comprehensive especially in terms of medical coverage. Check what level of excess you are required to pay because the excesses may be so high there is little point in claiming for lower value losses or expenses.
Hire car tip
If you buy a travel insurance policy via an insurance broker, many of these polices will also cover hire car excesses. This means you don’t have to pay for the supplementary insurance to reduce your excess to zero – potentially saving you around $30 per day. You will still need to pay for the car’s regular insurance, but this is normally bundled into the hire cost and can’t be removed in any case. Being covered by your travel insurance means you can avoid the supplementary insurance, saving you around $30 per day.
Hire car trap
Unfortunately, some rogue operators have given car hire companies a bad name because they charge customers for damage they didn’t cause. People often only discover this has happened when their credit card is debited days later by the hire car company. The solution to this trap is now much easier thanks to improvements in phone technology. Use the camera on your phone to record a video of a quick walk round the car before you start using it. Pay particular attention to damage, even little things like scratches on the hub caps. If your camera doesn’t record the date, place a copy of that day’s newspaper in the video of photo to prove the date. Generally, you will be recording this video in the hire car company’s car park, giving you another proof point that it was the first time you drove the car.
Loss and theft tip
If you lose items or have them stolen pay careful attention to the conditions in your policy as they can be very strict. Generally, a loss must be reported immediately to your hotel or the transport company you are using if you are on the move. A theft must be reported to the local police. This is where things can get complicated, especially if you are leaving the area or the country imminently – often the case when on holiday. The nearest police station could be many hours away if you are staying somewhere remote. Obtaining a police report may well take some time and is likely to be in a foreign language. The insurance company will expect you to follow-up and organise to get a police report, even if you have since left the area.
Having the most appropriate insurance for your travel adventures means you can relax and enjoy your holiday more. Remember to find out what your policy conditions are before you set-off, so you know exactly what you need to do to make a successful claim. Lastly, don’t neglect quality medical insurance as these types of costs can be non-negotiable and extremely high.
General Insurance Adviser Darren Reilly started his career with AMP General Insurance working in a number of roles including underwriting. He joined the Wenck Group in 1991, becoming a partner in 1996 and participating in the 2008 merger which formed Shadforth Financial Group, subsequently rebranding the insurance business to IOOF Insurance Brokers. Darren is a Senior Associate of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and has had strong industry involvement through serving as Chairman of the Australian Burglary Insurance Surveyors Association (QLD) and as Vice President of AFMA in 2004 and 2005. He has been involved in large portfolio transfers with underwriters and negotiating terms of business. He is currently NIBA committee representative. Darren specialises in providing tailored insurance programs to protect assets, mitigate personal and professional liabilities and other personal risks for businesses, farms and corporations in Australia, New Zealand and the Pacific Islands. Contact Darren at [email protected] or connect via LinkedIn
Disclaimer: This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document you should assess your own circumstances or seek advice from your financial adviser.