The Deal with Travel Insurance
Many people ask me whether or not they really do need travel insurance. That is a crazy question, because the answer is and always will be ‘Yes, of course you should’.
If you can’t afford travel insurance then in my eyes you cannot afford to travel.
The travel insurance is a minimal cost when you compare it to your flights and/or hotels, so why people would skip on this, is beyond me.
I do understand that it is an additional cost to your trip and chances are nothing will happen. But if it does happen it will cost you dearly… and that doesn’t mean just costing you in money.
Now days online travel insurance is a huge market and some credit cards even cover you for the basics if you book your travel on that card. So costs can actually be very cheap.
First of all let’s talk about insurance on credit cards. Many of the major banks cover travel insurance if you pay the full amount of your travel using that particular card.
These policies are usually just basic coverage, mainly just for medical. But if you plan to skip on purchasing a policy then at least find out whether your credit card provider can give you a travel insurance policy.
When you book using a credit card many of the online and brick and mortar agencies will charge you a credit card surcharge. Typically this amount is around the 2% mark.
Depending on the amount of travel you are paying this can often still be cheaper than purchasing a policy rather than using a credit card and attracting this 2%.
A $3,000 fare would attract a $60 surcharge for instance. Maybe you can find a policy for around this price anyway, which would normally give you better coverage as well.
Please note you are not automatically covered with these credit cards. Once you paid for your travels you must contact the bank to issue your policy.
You may actually want to contact them before hand just in case they do not have a policy and they may have certain requirements they need before paying your travels. Each institution is different.
You do also want to check what is actually covered… and this is important. Make sure medical is high on the list of things covered and the amount the policy covers up to is sufficient.
Also do consider how easy it is to contact the bank while overseas. Is there a 24 hr number? Is there a certain number to call while overseas?
Think about how difficult it is to contact your bank now. Are you on hold longer than 10 minutes normally? If so think about the costs and stress of contacting them from overseas in an emergency.
If you purchase a policy from a travel insurance retailer then usually you will have much better coverage, covering more circumstances as well as covering up to a higher amount in the event of an emergency. Most of these companies also have easy to contact numbers based around the world, 24 hours a day. But do always check on this.
The most important thing to cover is medical and if you can get a policy that covers over a million dollars then take up that policy. Some cover an unlimited amount for medical and are of course the best.
You may think medical wouldn’t be that high priced, but it is always better to have that money in reserve as a precaution.
What if you need major surgery overseas? What if you are in a remote area or out at sea and need to be air lifted? What about if the hospital is not up to civilised standards and you risk infection or worse from this hospital?
A friend of mine Brendan, was jet skiing in Phi Phi Island, off the coast of Thailand.
Please note that he had sporting covered in his policy, not all policies do.
Anyway he had a terrible accident which caused him to flip and the Jet Ski landed on his back injuring 3 spinal disks.
He obviously could not walk or move too much without pain and was taken to the closest, local hospital first. He described it as filthy, dirty and wanted nothing more than to get out.
The first thing the insurance company was able to do was to transport him to Bangkok via helicopter… this is extremely expensive to do. Now he was in a slightly better place where he could rest until they were able to move him to the airport and get him home.
Once his mobility was a little better they were able to take to the airport. He had strict orders to be lying flat the entire time, therefore the insurance company paid for 3 business class seats, as it was the only way to fit him on the flight lying down.
Most of us can’t afford to spend the money on even 1 business class ticket let alone 3.
So not only was he airlifted from a hospital that was not up to scratch, but also had 3 business class seats in order to lay flat and get home to our hospitals.
The expense of this would be huge and if you did not have travel insurance you would have either had to stay in the horrible hospital and/or pay for everything yourself, including the air lift, the new hospital and 3 business class flights yourself.
Ask yourself this…how do you organise all of that, lying flat in a hospital bed? This is why medical is so important for travel insurance.
In actual fact, in America and some other parts of the world the hospital won’t even see you, let alone tend to your injuries or illness if you do not have travel insurance.
Basically they will just say ‘too bad’ and the reason for this is that the doctors are not covered if the treatment goes wrong.
I’ve heard many horror stories as a travel agent from America including a guy who broke his arm and was refused treatment. So this guy had to fly home with a broken arm, in just a self made wrap so that he could get his arm bandaged and set back home.
There are many different options for travel insurance; usually broken up into full coverage, mid range and budget.
I personally always go with the mid range or the highest, depending on the price.
Usually the mid-range will still cover medical up to around 10 million where as the full coverage is unlimited medical.
There are few others coverage’s which will of course be less when compared with the fully inclusive policy. These other coverage’s could include the amount of money repaid on stolen items, dental, lost luggage etc. As long as I have a good medical coverage I am usually happy.
Buying your policy online will usually help to save costs, but you can also get a policy off your travel agent and still save a fortune.
The travel agencies I worked for earned around 40% on the full coverage policies they sell and around 20% on the mid range, but only making few dollars on the budget.
Therefore if you want full coverage, simply ask for at least 10 to 20% off. Make a deal with the agent asking for the discount in exchange for an immediate sale.
All agencies push their agents hard for insurance sales as there are generally kick backs for targets involved and the fact that they are bringing up their percentage of profit overall in the booking.
Most of the time the travel agent will do this insurance deal for you, if you were to pay in full that day.
I used to do this myself, because it was a way of sealing the deal for the rest of the travel. So if your travel agent refuses to do the deal, then don’t pay it. Just pay online or find another travel agent who will make this deal.
Perhaps the original agent you enquired with has already made their target for the month or are just too money hungry to do it. But there are always plenty of agents who still need to hit their targets.
All in all, as long as you get travel insurance you will at least save yourself a fortune if an emergency does arrive. Remember that medical costs could well be in the hundreds of thousands or even possibly over a million.
Ensure, no matter what policy you obtain that you are covered for medical. If you use the credit card travel insurance that is fine also, as long as medical is covered to a substantial amount.