25/07/ 2016 Category: News

Taking out Travel Insurance is not as simple as it seems!!!!

 

With many of us travelling far more frequently than in that past, city breaks, extended holidays or indeed for work, whether short business trips or long term secondment, the corollary is the increased take up of travel insurance and the rise in the multiplicity of travel insurance options.

Offers range from;

  • single trip cover
  • backpacker cover
  • global health & travel policies and indeed
  • multi-trip cover - echoing the frequent rate of travel by some people in any one year.

Providers of travel insurance range from;

  • Well known General Insurance Companies
  • Health Insurance Companies
  • Specialists Brokerage Websites

As with any insurance policy there are often many variations in cover, exclusions, extensions and discounts.  In this article, I want to specifically address the pitfalls that can exist around this cover when accepting either discounts or extensions.   Largely speaking, the discounts available on Travel Insurance policies are offered to those who also have a qualifying health insurance plan in place.

Travel Insurance policies largely comprise two elements of cover.  

  1. Financial compensation for travel related risks such as cancellations, curtailments, delays and loss of goods.

 

  1. Financial Compensation or indemnity against medical costs.

 

It is the latter I will focus on as these are the costs that are of primary importance to most people and can also be the most difficult to understand. 

It is probably fair to say that multi-trip travel insurance policies are the most popular of the plans listed above due to the value they provide and the further savings achievable if you also hold a qualifying health insurance plan.  To illustrate these savings I have used a popular website www.multitrip.com to produce the following comparison table based on a 35 year old individual and a 35 year old with family, flight cancellation cover included:

 

 

Worldwide Cover Inc USA

Individual Policy

Family Policy

No Health Ins'

€63.98

No Health Ins'

€124.95

Health Ins'

€48.98

Health Ins'

€95.95

% Savings

23%

% Savings

23%

 

Discounts for Health Insurance Customers, but at what cost?

Traditionally Private Health Insurance plans offered an element of cover for medical emergencies (A&E abroad) along with cover for repatriation (air ambulance).   This wavered between €65,000 and €100,000 for A&E or hospitalisation and approx €1 to €2 Million for repatriation.  It is this cover that allows travel insurers to discount their premiums because the health plan’s ‘overseas cover’ allows them to build a large excess (€65,000) into the travel plan’s hospital cover.   Each travel insurer varies, but by and large the excess built into a travel policy for those with health insurance usually begins at €55,000.

This all sounds very sensible and in the past was a lot more transparent, however with the increase in Private Medical Insurance providers and the resulting proliferation of Health Insurance Plans in recent years, cover which was once taken for granted as standard on health insurance plans is now far more likely to be subject to the plan type and indeed insurer you are covered with. 

For example, the most recent Health insurer in the market, GloHealth, does not offer overseas cover as a standard benefit on most of their hospital plans.  Rather it is one of a suite of optional benefits which can be added to your plan at no cost.  Indeed if chosen, this cover has the added benefit of annual travel insurance attached to it; hence you get both for free.  Nonetheless, if your reason for switching to such a plan was for reasons other than overseas cover, this is a benefit change you might miss with the possible result of rendering your existing annual multi-trip policy ineffective for overseas hospitalisation.

Aviva Health, Laya Healthcare and Vhi generally offer travel insurance cover to compliment their health insurance cover and also offer cover to the wider market without health insurance, as does a range of others including Blue Insurance, 123.ie, Mutlitrip.com to name but a few and all of them will offer discounts for those that have qualifying health insurance plans, and by ‘qualifying’ they mean subject to your health plan having enough overseas hospital cover to carry over the travel policy excess.

However having the correct amount of overseas health cover on your health insurance plan doesn’t in itself ensure that enough has been done to guarantee that you’re covered.

 

 

When buying Travel Insurance, beware single trip limits on your Health Insurance.

Depending on your health insurer, you could find that your overseas health cover has a single trip limit of 31 days, meaning that you are without that cover on day 32.  Now even if you were aware of this, you might think yourself clever by taking out a travel plan for a period of cover longer than 31 days.  For example Vhi offer extensions to their single trip limit on their multi-trip travel plans for up to 180 days.  Problem solved you might think.  Maybe, for what you might not be aware of is that the extended cover provided by the travel plan is underpinned by the cover provided on the health plan.   So this is fine if for example your health insurance is with Vhi, where the overseas cover on the Health Plan is 180 days standard.  However if you have your health policy elsewhere you might find that the overseas cover on it is just 31 days and when this period has passed it effectively negates any cover you have on a multi-trip travel policy where you availed of a discount by virtue of holding a health policy. 

So even if a Health Policy were deemed as a ‘Qualifying policy’ by virtue of having €55,000 Overseas Health Cover,  it may not qualify for your extended single trip limit unless you health policy also qualifies by virtue of having that overseas cover for at least as long as the travel extension period.  Confused?

Another thing to consider is that much of the cover offered for A&E Abroad is subject to you being an inpatient in the hospital, otherwise it is deemed as an outpatient expense which you pay upfront and may claim something back from the insurer later.  However the difference in what you pay and claim can be substantial.  I recall hearing an instance where someone having received treatment (scans etc) in a Hospital Emergency Department while holidaying in the US received a bill for $12,500.  Had he been given a bed and been treated as an inpatient he would likely have been covered at no expense to him.

 

What do to if making an overseas claim?

While we are becoming more and more consumer savvy when purchasing insurance products, we very often don’t display the same prowess when it comes to utilising the cover, for obvious reasons, we are then vulnerable victims/patients and behave as such.  It is important that at the stage of injury/accident you contact your health insurer first to allow them to handle the claim.  It is also likely that they will be covering the first portion of the claim.  If you inform them 2 weeks later, it is likely they will not pay it. 

You can also contact your travel insurer subsequent to that to inform them that a claim has been lodged with your health insurer and ask what needs to be done with respect to the travel insurance. 

Indeed some thought should also be given as to whether relying on two policies to potentially cover the same event is the wisest choice.  Rather than having to worry about who covers what at the time of a claim, some might prefer to simply choose no discount and have a standalone travel policy for either multi-trip purposes or single trip cover for those trips that would be longer than the standard 30 days covered on a multi-trip policy.

Summary

As you can see this area is indeed more complicated than it might seem on the surface and how it’s presented to us on easily accessible user friendly websites.  However mistakes are easily made and being on the wrong side of those mistakes can be costly and very distressing.  Sometimes there is no substitute for picking up the phone and talking to an expert.  As compassionless as the phrase might sound, rarely was the phrase ‘caveat emptor’ more appropriate.

 

Patrick Brennan

Director

Irish Health Insurance

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