Friday, March 8, 2013, AM | 7 Comments
Travel insurance is any insurance policy designed to offer cover to a person while he or she is in a country other than the country of his or her residence; or other than the country in which the insurance policy is held.
That is, if a person from the UK wishes to travel to China or Hong Kong (for example), either for work or for pleasure, and is protected by medical insurance or bank insurance in the UK, he or she may have to take out separate insurance to be protected when away from British shores.
It’s important to note that the prime reason for requiring travel insurance is to make up for the lack of protection one receives in a country other than that of one’s residence – where it is reasonable to assume that one is compliant with the laws governing personal health care.
In the UK, for instance, we have the National Health Service, which provides free medical aid for emergencies and all illnesses. A British person travelling outside the UK is no longer protected by the NHS – nor yet is he or she covered by the provisions made, in another country, for protecting their own citizens.
Do You Already Have Travel Insurance?
Before we specifically discuss health and money (which are the two things most treasured by the traveller, and also the two things he or she, all other things being equal, is most at risk of losing), we’ll look at the concept of already-held insurance. This is quite common, in specific sets of travelling circumstances – and is normally the result of holding a specific type of account with a UK bank.
Any premium style account, for example, in which the account holder pays a monthly rate just for having it, will offer a range of auxiliary benefits to the holder. Sometimes – but not always – a form of travel insurance is included as part of the package.
As with all travel insurance, it is absolutely necessary to check exactly what such a policy might cover you for: and, more importantly, what it doesn’t. All insurance policies are subject to exceptions, which tell the insurer when not to pay compensation.
Commonly, UK based basic travel insurance of this type may be subject to important exceptions, which makes getting extra travel insurance worthwhile.
One of the most famous exceptions in recent history applies to the insurance sold travellers when hiring cars in the USA. This is an example of where specific nationality or citizenship affects the parameters of policies that seem ostensibly to be perfectly adequate for their purpose.
The insurance bought when hiring a car in the US fails to insure the driver for serious injury, or for accidents involving other vehicles. As a result, a person paying for such insurance can believe himself or herself to be insured when in fact he or she is liable for potentially vast damages, should he or she hit another car.
This is an illustration of how important it can be to check the actual architecture of a travel insurance policy before buying it.
Insuring Your Body, Insuring Your Money
There are two essential components to any travel insurance policy: insuring the body (health) and the wallet (money). If a traveller loses money through theft or plain old loss, he or she can find himself or herself completely stranded in a country that might be on the other side of the world from his or her bank or normal home.
That’s why it is so important to check that your travel insurance policy properly covers you for the loss of cards, cash and other forms of currency.
Similarly, health problems can be disastrous when the medical system that normally cares for you is thousands of miles away. It is vital to check that travel insurance properly covers you for real emergencies – for example by providing evacuation should you need it.
Lisa jane is a former travel journalist. She is now researching a doctorate in travel insurance and uses www.directasia.com.hk as reference material.