Understanding Insurance – Travel Insurance

Many Malaysians view travel insurance as a luxury and not a necessity. This could be due to a lack of understanding of what it actually is and what is the coverage. We hope this will help you understand better its importance and why we strongly feel that it as one of the policies that everyone should consider purchasing.

Travel insurance, what is it and what does it cover?

Like any other insurance, the purpose of travel insurance is to cover you against risks and to compensate you for losses. Some of the risks that travel insurance in Malaysia covers are as follows but keep in mind that there may be others. The coverage may vary from one insurance company to another.

1. Travel cancellation
2. Flight delay
3. Personal belongings
4. Medical expenses
5. Emergency medical evacuation
6. Repatriation service
7. Personal liability

1. Travel cancellation and curtailment – In the case you cannot start or continue your travel

If you suddenly have to cancel your travel plans or have to come home early from your travels due to unforeseeable emergency situations, travel insurance will help you cover some of the costs. Emergency situation can be events such as you falling sick before your flight, a death in the family, or a relative that fell critically ill. Depending on your insurance cover, the policy will pay you for any cost that you could not get refunded after you have canceled your hotels, flights and tours.

2. Flight delay – In the case where your flight is delayed

The number of hours delayed for you to be compensated vary according to insurance company. Some may state 8 hrs as the condition for compensation, others may be 12 hours. Again the reasons of delay may vary according to insurer. The travel insurance will help you pay for additional meals or hotel costs that you had to take because of the delay. It is best to understand what is being covered and an insurance agent can help you.

3. Personal belongings – In the case your personal belongings are lost or damaged

One of the most dreaded things that can happen to you while you are traveling is losing your personal belonging. This may include your baggage, travel documents such as your passport, cash and traveler’s checks. Your travel insurance policy will pay you back if your belongings are damaged or lost during your travel. Some type of insurance also cover theft, so that if your valuable camera gets stolen, the insurance will pay you to buy a new one.

4. Medical expenses – In the case you get sick

This is perhaps one of the most important that any traveler should seek to cover himself with. Accidents, illnesses and injuries can happen to anyone, at anytime and anyplace. You do not want to end up with a huge hospital bill because your appendix decided to rupture while you are on your honeymoon in Europe. This is all too familiar to us right now. With recent news about a local student studying in Korea ended up with a RM 35,000 medical bill while another Malaysian man is left with a RM 250,000 bill after having a stroke during his trip to London.

5. Emergency medical evacuation – In the cases you have an accident

Medical expenses under travel insurance pay for your expenses related to medical and treatment. But it does not cover the cost to move you from where you were to the nearest hospital or medical facility for adequate treatment.

6. Repatriation service – In the case you need to get home

There are two types of repatriation. The first is medical repatriation, where you have to be sent home due to your medical emergencies or when you have received treatment and is stable enough to be sent home. The insurer will cover the additional cost to send you home, such as medical equipment on board. The second type is repatriation of remains. Where the insurer will cover the cost to bring the remains home should death occurs during the trip.

7. Personal liability – In the case you caused injury to others or damaged property belonging to other people

Personal liability covers you should you during your trip injure another person or damage somebody’s property. The other party may make a claim against or sue you for the injury or damages caused. Travel insurance will cover you for the damages that you have caused to other up to a specific amount.

Types of Travel insurance

There are generally two types of travel insurance that most insurance company offer. One for single trip and the other is for multiple trips which is by yearly coverage.

Exclusions

Exclusions are the conditions not covered by the insurance company. This may be a long list of clauses so you need to fully comprehend before purchasing any insurance. Some common exclusions that you may come across in a travel insurance policy are as follows:

For medical coverage – pre-existing conditions, self-inflicted injuries, injuries or sickness due to drugs or alcohol. Injuries or accident caused by participation in hazardous activities or sports or in illegal activities.

For loss or damage to personal belongings – fragile items, items confiscated by customs or other authorities, devaluation of currency.

The coverage of travel insurance policy, as said, may vary from one insurer to another. So at iBanding, we always advise our readers to clearly understand the coverage. Pay special attention to exclusion clauses that may in the policy. Consult with a knowledgeable agent what cover suits you best and shop around to find the best policy that suits your needs and budget.

In our next article, we will be looking at why travel insurance is important, that you should see it as a must every time you travel, even if you are not a frequent traveler. In the meantime, we would love to hear from you on your experience while traveling abroad where having travel insurance had come in handy. Please feel free to share your stories with us.