Though accounting for a few percent of the travel expenses, travel insurance is considered the “second most important safeguard after passport”, which plays a crucial role when travellers face unwanted problems during their journey. Is travel insurance really important? What are the benefits of purchasing travel insurance? Which type of travel insurance should be chosen? Those are questions that not every visitor can answer.
[rpi]
UNEXPECTED SCENARIOS
Travelling is a great time for life experience and enjoyment. However, not every journey has a perfect start and end. Not long ago, the case of Ali Aldoh, a 22-year-old Egyptian girl who was robbed right in District 1, Ho Chi Minh City caused a commotion. She panicked and burst into tears as all of her personal papers and belongings were stolen.
You can take precautions against the risks mentioned above; however, there are some risks that are unavoidable. For example, the 7-magnitude earthquake in Jiuzhaigou led to this Elysium on earth being temporarily closed. Visitors who had booked tours and hotels in this area were faced with a real dilemma. Not only did they have to stop the journey, but they also had to deal with major difficulties in procedures as well as expenses of tours and hotel reservations postponement or cancellation.
There are many kinds of risks, and you may expect someone to shoulder the responsibility with you when you get into trouble. In the UK, the expenses for travel insurance is about GBP32 per person per year (equivalent to VND985,000), while the average cost per insurance claim is up to GBP1,022 (equivalent to VND31,475,000). Statistics from the Association of British Insurers (ABI) released in 2015 has shown that insurance companies have paid for at least GBP370 million for more than 580,000 claims from travellers experiencing a problem abroad.
For many people, however, this kind of insurance is… unnecessary. According to the US Travel Insurance Association, only 30 percent of Americans buy travel insurance, while this figure in Australia is about 70 percent (according to the 2012 statistics of Australian Bureau of Statistics, Department of Foreign Affairs and Trade); and in England, the figure is about 76 percent (based on 2012 statistics of FCO).
Meanwhile, in Vietnam, for travellers going on tour, the 2005 Law on Tourism specifies the obligations of international travel agents to buy tourism insurance for their clients when they take outbound trips. As for domestic tours, this is not compulsory unless there are requests from the tourists. Many travel operators do not provide any guidance and information about travel insurance for customers when they clearly do not know their rights. Since most of the domestic tours are scheduled in a short time, Vietnamese tourists take travel insurance lightly as they only care about the price instead of the safety and possible risks that might happen during the journey.
Even Tuan Anh – the journalist who has travelled to all provinces in the North of Vietnam and set the goal to climb at least one of the top 10 highest mountain peaks during the challenging cloudy months – has never bought or considered buying travel insurance. “I usually take short trips; sometimes my motorbike broke down on the way or I encountered some other troubles. However, I do not think that I need to buy travel insurance,” said Tuan Anh.
There are some people like Nguyen Hoang, who is a member of the Backpacking forum. He travels a lot; however, as he thought travel insurance is costly and unnecessary, he did not buy any. Until his arm was broken while climbing Bach Moc Luong Tu did he realize that travel insurance was very important and that the expenses for travel insurance were much less than what he had expected.
Representatives of Bao Viet Holdings said that although the awareness of customers about travel insurance is changing in a positive way, compared with some popular types of insurance such as health insurance or life insurance, travel insurance has not been given proper consideration. Most of the purchasers are travel agents, but they only buy at a low cost. Very few travellers buy travel insurance, unless they participate in adventure activities or the places they plan to travel are frequently hit by natural disasters.
HANDLE RISKS TOGETHER
It is recommended to find out more about the customer’s benefits in your insurance agreement. Let’s consider the benefits that this contract can bring to you. First, travel insurance is responsible for any incidents arising on the itinerary. This may cover the loss or damages caused by unforeseen circumstances to your personal baggage, reimburse any non-refundable expenses in case of trip/flight cancellation and cover medical expenses including the cost of medical treatment, emergency medical transportation, personal injury, taking the body to home country in case of death. In addition, travel insurance also covers the cost of reissuing passport, visa, airfare in case travel documents are stolen; pays for accommodation expenses, travel cost if natural disasters occur or reimburses any non-refundable costs in case of flight cancellation/ delay, luggage loss, trip interruption and other incidents regarding the flight.
Moreover, some insurance companies also pay compensation if the travel agents go bankrupt. Incidents such as hijacking, hotel services being interrupted or canceled due to strikes or violence are also covered by some companies. Besides, several insurance agents even cover the property loss or damages if the client’s house is burned while they are traveling abroad.
However, travel insurance will not compensate in some cases such as risks from war, civil war; pregnant women; Likewise, the compensation is not applicable to suicide; in the case of missing persons; infection of HIV or radioactive substance; illegal acts; going for medical treatment or joining adventure games.
TRAVEL INSURANCE: WHERE TO BUY AND HOW TO BUY?
In order to choose the right type of travel insurance, we need to consider many factors, for example, whether your trip is domestic or international, the destination is safe or not (political issues, natural disasters …). However, you should choose the type of travel insurance that can compensate for all of the cases mentioned above and has the 24-hour customer care, emergency rescue services (in the case of you getting stuck in a snowstorm in the mountains and a helicopter is needed for rescue, you should check if your insurance covers this or not).
In particular, customers who buy international travel insurance should consider the following factors in order to select the appropriate insurance package: costs for medical services of the destination (costs for medical services in European or American countries are much higher than in Asian countries), the age of the insured person that is likely to be vulnerable to risks to choose the coverage level of insurance appropriate with your need and budget.
Furthermore, another effective way to save money is to regularly stay updated on the promotional information of insurance companies to find a good deal. In Vietnam, there are four main types of travel insurance: domestic travel insurance, travel insurance for Vietnamese travelling abroad, travel insurance for foreigners traveling in Vietnam and international travel insurance. Each type of insurance specifies the benefits for customers and has a different cost. Nowadays, insurance companies in Vietnam have travel insurance products not only for tour operators but also for individual customers who want to travel domestically or internationally.
According to the survey, there are many companies that have travel insurance products such as Bao Viet, Bao Minh, Liberty, Blue Cross, ACE Life, AIG (Chartis). In particular, besides benefits, the premium is also a big concern for customers. Each insurance company will offer different service packages, corresponding to different compensation limits. At present, the lowest domestic travel insurance fee is VND1,500/person/day (the maximum compensation for an accident is VND10,000,000). Customers can also purchase insurance at higher levels of coverage: VND3,000/person/day; VND4,500/person/day… The premium for traveling abroad will vary depending on the type of incidents, destination and travel time.
Finally, do not solely rely on the insurers’ consultation. Before deciding to buy travel insurance, you need to do a lot of things. Firstly, check the reputation of the insurance company in the world or in the destination you travel to and the network of services that company provides. Secondly, carefully read and review the terms of your insurance contract for insurance coverage, compensation, and penalties to fully understand the compensation limits and other conditions required.
Also, make sure that the type of travel insurance you intend to purchase will cover cost for transportation, baggage, and healthcare (consider the exclusions, for example, if you have a terminal illness, you will not receive a certain type of insurance payment). Most importantly, you also need to know the contract period as well as the time limit for notifications of loss or trip cancellation because if you do not follow time compliance in the contract, you will not get insurance payment.
If you book a tour, you also need to ask for more details because some travel companies when offering tour programme for the customers do not provide enough information about the insurance package. Sometimes they refuse to disclose the insurer, the maximum coverage or customers’ benefits. Due to this ambiguous information, even though the travel agents offer free insurance included in tour packages, some tour operators still discard the responsibility when their customers face unexpected circumstances.
“The best backup solution is buying travel insurance, especially when traveling abroad or going alone because you may encounter difficulties in communication or suffer high medical expenses without family support. The cost of travel insurance is very small compared to the total travel expenses. When you are met with an accident, flight delay, missing baggage or personal papers etc,… you will realize how useful it is.” – Tran Dang Dang Khoa, a Vietnamese guy travelling around the world by a motorcycle has shared the experience to ensure safety when traveling abroad. He is also using Liberty’s travel insurance package while his friend, a guy with passion for hiking, Hoang Le Giang is choosing annual AIG’s one. “I am very careful when travelling so even though I go trekking quite often, I have only made use of the insurance claim once when my flight was delayed and the insurance company made payment for compensation quite quickly,” shared by Giang. For him, insurance travel is a guarantee that makes him and his family feel relief towards his dense travel schedule.
Understanding the benefits, costs, and types of travel insurance will provide you sufficient knowledge to choose the insurance company that suits your itinerary the most.
Thu Hoai | Wanderlust Tips