EXPLAINER: Six tricky travel insurance terms and what they mean

There is something about travel that is exciting, even ethereal – right from the planning and booking stage. But travellers often overlook a very important aspect: travel insurance.

When a concerned friend or family member asks if you’ve taken out travel insurance, you may shrug and say, “But what could possibly go wrong?”

You wouldn’t believe some of the things that have happened to people when they’ve been away on a trip.

Why you need travel insurance

From unforeseen medical expenses that could open you up to financial strain if the incident transpired in a country with a stronger currency than the Rand, as just one example.

How about a luggage cover for the case when all your baggage mysteriously disappears in an airline’s hold, and your travel gear and personal items need to be replaced without delay?

Purchasing a travel insurance policy, as a standard item prior to departure, offers you and your travel companions a level of financial security and travel assistance when things go awry.

Furthermore, it is also intended to protect you from expenses you may not reasonably be able to cover.

The problem with insurance is the terms used to describe what is covered and how the policy works are often difficult to comprehend.

Tricky travel insurance terms

Flight Centre South Africa shared seven of the trickiest insurance terms, what they mean and how such situations may play out in real life.

1. What does liability refer to?

Here, the policy covers any damage you may unwittingly cause to property (such as your rental car) or another person (known as a “third-party”).

Having this in place protects you in the unforeseen instance of, for example, losing your footing on a staircase and grabbing on to a (unfortunately) rather valuable painting and bringing it into a state of disrepair.

This incident, which really happened to a Travel Insurance Consultants (TIC) client, has gone down in the history books as an example of exactly what may transpire – and how much out of your personal control it may be.

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2. What is an excess?

This is the amount of cash that will be deducted from the full value of your claim before it can be settled. You may be familiar with the term “excess” from your car insurance policy.

The way it works is that if you need to make a claim from your travel insurance policy, the excess acts as a trigger amount before they will pay out; it’s sometimes called a “deductible.”

In a typical example, two hard-working single women – who are well-travelled and pack extremely lightly – went on a vacation and their luggage went missing.

They made a claim under the “Baggage and Personal Possessions” division of their insurance policy but felt it unfair that their insurer charged the excess twice over – instead of just once – because they had only brought one standard-sized suitcase between them.

The insurer won when this complaint made its way to the ombud, as the terms and conditions of their policy stated:

“Claims will be subject to an excess. You will be responsible for paying the first part of the claim up to the excess value per insured person for each and every incident, under each and every section of cover.”

3. What is a pre-existing illness?

This is a term you may previously have encountered via your medical aid, gap cover or medical insurance provider.

It refers to an injury, illness or medical condition that made you experience symptoms, take medication and/or seek treatment before you bought travel insurance cover for a trip.

What we advise is that travellers read a policy’s definition of a “pre-existing condition” and gauge – with general practitioner help, if necessary – whether they have any medical history that may fit this definition.

The disorders that tend to be placed in this category include heart conditions, high blood pressure, a previous stroke, mental illness and/or HIV infection.

If you are pregnant and considered high risk for any reason, or are in the later stages of pregnancy, this may also cause your insurer to sound the alarm.

The research reveals that the following medical emergencies happen most frequently to overseas travellers: fractures from falls, cardiovascular events, trauma, and respiratory distress.

So, if you have a pre-existing condition that may exacerbate such an occurrence; or make it more likely to transpire, be sure to acknowledge this to your insurer and pay the extra cover required to put your mind at rest should any special care be needed.

Note: a coconut falling on your head and causing concussion while sunbathing on a tropical beach is not, of course, a pre-existing condition.

4. Cancellation and curtailment

The former refers to a situation when you cannot embark on your planned trip for whatever reason.

Curtailment cover assists you with expenses related to needing to cut a holiday short, such as for work or an illness.

Even when you may need new flights to return home earlier.

5. Car rental excess waiver

This policy inclusion covers any specified excess that is payable in the event of a car-hire insurance claim.

This could prove especially handy when you’re travelling on Rands in Europe or the States, and the exchange rate is a decided issue.

Pay a bit extra upfront on your travel insurance policy and, in the case of a car accident or other vehicle-related claim, be assured that there’s no excess to pay upfront before your insurer coughs up for the damages.

Heard of the case when a honeymooning couple stopped to take in the view in a scenic part of the French Riviera, and a herd of cows caused damage to the hire car’s paintwork after just a few licks?

Their excess for paintwork repair would have been exorbitant had they not had an excess waiver firmly in place.

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6. Sports inclusion

This is a policy for the young, fit and adventurous in which the sporting events you are keen on taking part in overseas are automatically covered.

Relevant sporting activities include mountaineering, rugby, motorbike touring, professional sports and more – when you “Add Sport” to your cover options on the application.

When signing up for this item, note that professional tennis is likely to make the grade, but hang gliding ­– not.

For obvious reasons!