About a year ago, Julie and I went to Hong Kong for two weeks, on holiday. Unfortunately, I slipped and banged my fistula, which had recent surgery. At first, I thought I had ruptured it. But soon after I saw a nephrologist, and he reassured us that it was only bruised. Nevertheless, we both felt traumatised and decided to cut our holiday short.
This meant cancelling a few days at the hotel, (we had pre-paid) and a flight to China. We presumed that these changes would cost, but we had travel insurance, so we were hopeful that it would soften the blow.
A little about the travel insurance we used. I did some homework on the small print, and I knew that I was not covered for any medical costs incurred. However, Julie had full cover. So we assumed that even if I had no claim, Julie’s part of the costs could be claimed.
However, I hadn’t read the small, small print. Somewhere there it said that if the reason for the claim was linked to my pre-existing medical problem, it would be rejected. The reason Julie we cancelled the flight was because of my fall. Therefore no claim and no refund.
(Though it was not all bad: Hotels.com had no such policy: the last few hotel days were within the allowed change period and they refunded our money. Kudos to hotels.com!)
We took the insurance hit on the chin as a lesson for next time.
Well, next time is coming up, so I have started looking again at what travel insurance is on offer. And I thought it would be useful if I shared the findings.
Travel insurance will pay the expenses you may incur for unplanned things that happen to you while you are away from home. These things include the cost of medical and dental services, cancellations, personal liability actions, accidental death and personal disability, loss of luggage or personal effects, travel delays, rental vehicle expenses, pandemics and travel provider insolvency (terrorism and natural disasters are usually excluded).
The choice of which travel insurance is best for us is based on three things:
- The things I want insured (cover)
- The price I’m willing to pay (premium) and
- The things I can’t insure (exclusions).
Each insurance provider is compelled by law to list information about each of these things in a small-print document called a Product Disclosure Statement (PDS). This is quite convenient, but you need lots of time and good eyes to work through each company’s PDS.
So rather than reading 20 or 30 websites and a few thousand pages, I went to our independent consumer watchdog website, Choice, (which is like the UK’s Which? or Consumer Reports in the US) to get the good oil. They review the current offerings from most sectors of most consumer markets, insurance PDSs and costs included. There is a membership fee to use Choice (and most of the other services), but it is worth it – and it is paid monthly, so you can cancel after you have done your research. (I’m always meaning to cancel, but I keep finding reports on other things I need!)
Where to Buy Travel Insurance
There are two options for obtaining travel insurance: from standalone insurance companies, or as one of the free benefits provided by a high-end credit card.
Choice has reviewed both options. Each has countless rules, options and variations, and it takes an organisation like them to find the best value from each group.
The most important finding was that in comparing the two groups, many of the top-rated credit cards provided similar quality protection to standalone travel insurance, especially if you want hassle-free cover for things like unlimited emergency medical, cancellation cover and good protection for baggage and items.
The standalone insurer’s cover and benefits are often more generous and flexible in terms of length of trip and reducing excess. Whereas the free travel insurance has few location restrictions which means the one policy covers travel across the globe.
To find the best cover deal I simply got a web quote from the top standalone travel insurer and compared it with the cost of the top credit card issuer. In our case, for a trip to Asia for 3 weeks, Choice’s best standalone insurer costs $207. For Choice’s best credit card insurance (issued by a bank we don’t currently deal with), the annual fee is $200.
But now we already have a free travel insurance credit card from our bank, and we travel more often than once a year. It’s not the best deal on offer (it came 23 out of 30 in Choice), but it is free, and provides reasonable cover. And given that whatever cover we buy will always exclude my medical-related claims, flights missed, cars hired, etc for medical reasons, and Julie’s cover excludes claims linked to my medical problems, we are not missing much. So we’ll stick with the free cover.
There are many other, more important things that are within our control that will help ensure that we have a safe and happy trip: like making sure we have our meds, being immunised before the trip, and sticking to our eating and drinking routines.
BigD holiday travel carries a degree of risk above that of the healthy traveller. Travel insurance is just one element we can use to help minimise that risk, as long as we understand what we are getting, and more importantly, what we don’t get.