Travel insurance in the time of corona
'Depending on the terms and conditions of the policies, if the policy did not make provision for cancellation due to the pandemic, travellers whose trips were cancelled would unfortunately have had no cover.'
Migrant labourers rest outside the departure lounge of the Netaji Subhash Chandra Bose International Airport as their flights got cancelled during a day long state-imposed lockdown as a preventive measure against the Covid-19 coronavirus, in Kolkata on September 7, 2020. (Photo by Dibyangshu SARKAR / AFP)
The pandemic has brought travel all over the world to a virtual stand-still over the past few months, but consumers are slowly coming back to the travel market.
They are ready to travel, but quite unsure about booking holidays that could again not materialise due to more lockdowns. However, they can now be more prepared and ensure that they have sufficient travel insurance to cover any delays or cancellations.
Booking with your credit card
Most banks provide basic free cover, but the extent of the cover differs from bank to bank and card to card.
It is important to remember that the amount of cover is linked to the type of credit card, says Sue Garrett, general manager: product and marketing at the Flight Centre Travel Group.
“Free cover is often very basic and the product mostly provides for limited medical expenses, with limited cover, if any, for other losses, such as trip cancellation or luggage or travel delay.”
She warns cover for pre-existing illness is often also excluded and advises that, considering exchange rates, it is important to check the medical cover limits as medical bills will have to be paid in foreign currencies. If your medical cover is not sufficient, you will be liable for the shortfall, which could potentially run into millions.
Travel insurance is important
Peter Nkhuna, senior assistant ombudsman of short-term insurance, says travelling, like life in general, entails a certain amount of risk. If you want to avoid any particular risk by transferring it to an insurer, you have to do a needs analysis to determine what you need in travel insurance.
Garrett says making provision for unexpected medical costs while travelling abroad is the core of travel insurance. “A small medical emergency can exhaust your holiday budget, while hospitalisation can easily exceed millions of rands. To ensure that you are guaranteed the best possible medical care in a foreign country it is essential that you purchase a comprehensive travel insurance policy.”
There are also other benefits, such as luggage cover, cancellation cover or cover should your flight be cancelled due to weather conditions.
Policies are available for citizens who travel locally and makes provision for benefits such as car rental excess waiver, cancellation and curtailment cover, as well as burial expenses. However, unlike an international policy, a local policy does not cover medical expenses.
What should you look out for?
Garrett says it is important to ensure the medical cover is sufficient and that it covers pre-existing conditions. Also check the age limits for pre-existing illness, as cardiovascular conditions are excluded on most policies for people older than 70.
Benefits such as cancellation cover only cover specific events that lead to cancellation: “If it is not explicitly mentioned as insured, it is not covered. Always read through the conditions and exclusions of the policy wording.”
Complaints over the past six months
Nkhuna says the ombudsman office had received 180 Covid-19 related travel complaints by the end September 2020. According to Garrett, the majority of complaints Flight Centre received came from travellers that relied on complementary cover, such as the cover offered by your bank if you pay with your credit card.
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