Travel insurance: How to decode policy fine print

Considering recent global events, some policies cover trip cancellations or interruptions related to pandemics or epidemics.
Considering recent global events, some policies cover trip cancellations or interruptions related to pandemics or epidemics.

Summary

  • Customers should be aware of essential aspects such as coverage details, exclusions and limitations, cancellation and refund policies, among other factors.

Flight delays and cancellations, particularly during adverse weather conditions, potentially impact travel plans and cause massive inconvenience to travellers. In the light of these potential disruptions, safeguarding travel plans against unforeseen events becomes paramount, making travel insurance the go-to solution. However, navigating the intricacies and fine print of such insurance policies can be challenging. Customers should be aware of essential aspects such as coverage details, exclusions and limitations, cancellation and refund policies, the claim process, and the availability of responsive customer support, among other factors.

When selecting a travel insurance policy, comprehensive coverage addressing various potential risks is crucial. These include:

Trip cancellation and interruption: This coverage reimburses unrecoverable costs if an insured person cancels a trip due to unavoidable reasons. Applicable circumstances include hospitalization for 48 hours due to illness or injury, the death of the insured person or an immediate relative, or the occurrence of a catastrophe during the coverage period.

Emergency: This includes coverage for the insured person’s stay in a hotel for up to 7 days beyond the existing booking, with conditions such as the severity of disability required for an extended stay, a limit of one claim per coverage period, and exclusions like prior awareness of potential claims or extensions for business or personal reasons.

Travel delay: This is applicable when an insured person experiences a delay beyond the specified number of hours for a flight’s scheduled arrival. To qualify for this benefit, the insured person must furnish written proof from the airline detailing the length of the delay, unless such information is directly available to the insurer from a reliable public source. Additionally, the delay should not result from the late arrival of the insured person. It’s important to note that rescheduling of the flight by the airline is not covered under this benefit.

Lost or damaged baggage: It encompasses both total and partial loss coverage for checked-in baggage. In both cases, the customer is required to provide written proof from the flight operator. Total loss events and losses involving customs, police, or public authorities are not eligible for reimbursement. Another exclusion is losses covered by the airline.

Personal liability and legal expenses: Reimbursing legal liability, including specified defense costs and a bail bond, incurred by the insured person for damages resulting from a third party’s death, injury, or property damage. Settlement of any claim is contingent upon the explicit consent of the insured person.

Extreme sports: Covering medical expenses if an insured person gets injured while participating in adventure sports during their trip. Approval must be obtained within 48 hours of starting hospitalization, with coverage for reasonable and customary charges. The hospital stay should be for medically necessary treatment, recommended by a doctor. The sports or events they were engaged in must conclude within 12 hours.

Pandemic or epidemic coverage: Considering recent global events, some policies cover trip cancellations or interruptions related to pandemics or epidemics. Reimbursement for flight cancellations due to the customer testing positive for covid is applicable, with certain conditions related to the trip’s start date and home quarantine guidelines.

In conclusion, understanding travel insurance requires a careful examination of the policy’s transparency and coverage details. By decoding the fine print, travellers can make informed decisions aligned with their needs and the specific risks associated with their destination and activities. Assessing the travel insurance policy thoroughly ensures a safer and more secure travel experience, turning every journey into a memorable adventure free from the shadows of unforeseen events.

Brijesh Unnithan is SVP, embedded insurance, ACKO

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