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Don’t Leave Home Without It!

16 November 2018

Today marks the start of the 6-week school holidays! Some of you will soon be heading overseas with your families for a well-earned break from work and school. Amid all the excitement, however, make sure you don’t forget to buy travel insurance before you leave for the airport.

Here are two of the lesser known aspects of travel insurance plans.

Medical Coverage

This is arguably the main reason for getting a travel insurance policy. Should you meet with an accident or require hospitalisation from a sudden illness while on holiday, medical coverage will protect you against the high medical costs you could incur.

What you may be unaware of is that many insurance policies may refuse coverage if they consider your hospitalisation due to a pre-existing condition. One insurer considers something a ‘pre-existing condition’ if, within 12 months before the journey began:

  1. you received medical treatment, diagnosis, consultation or were prescribed drugs, or symptoms or manifestations existed, whether or not treatment was actually received;
  2. medical advice or treatment was recommended by a doctor; or
  3. you would reasonably have been aware of the condition.

So, let’s say that while on holiday you experience sudden chest pains and need to be warded. In the hospital, you are told that doctors will need to urgently perform a cardiac procedure to save your life.

If it turns out that, within 12 months before the trip, you were already being treated or consulted for a heart condition, the insurer will have the right to refuse to reimburse you for the surgery and other related expenses. In some countries like the United States where medical expenses are prohibitively high, this could end up costing you a small fortune.

Some insurers have recently introduced new plans that cover pre-existing conditions. These are more expensive than their regular plans without that coverage. However, closer examination of those policies would reveal some exclusions still exist. For instance, they may require you not to have been warded or received A&E treatment more than once in the last 12 months before your trip.

It pays to be aware of these details so that your insurance plan serves the purpose you bought it for. As the definition of ‘pre-existing condition’ differs between insurers, be sure to check the specific criteria and exclusions of your selected policy.

Rental Vehicle Excess

Many Singaporeans enjoy taking driving holidays in countries such as Australia, New Zealand or the United States. The beautiful wide-open vistas and near-empty roads are a blessed relief after battling with local traffic on the daily commute.

But after securing the best car rental rate, are you aware of what might happen if you meet with an accident? Those of you who have rented from large companies like Hertz or Avis would be familiar with this standard hard-sell practice: right before they hand you the keys to your vehicle, the agent informs you of the excess you are liable for in the event of an accident. This can be several thousand dollars in the local currency. The agent then skilfully brings up their waiver plans, which would reduce the excess to just a few hundred, or even down to nothing. Tired and desperate to get to the hotel after a long flight, many give in and buy those expensive waiver plans just to have that peace of mind.

However, many travel insurance policies now also cover part of the rental vehicle excess! This can potentially save you a lot of money, and are much cheaper than the plans offered by the car rental companies (which charge on a per day basis). The only downside is that you may still have to personally settle all the documentation with the car rental company, but you will at least have a significant portion or all of the excess cost covered by your travel insurance – which you are going to buy, anyway.

Just remember to try and match the excess on your car rental with the coverage offered by the different travel insurance plans.

One more thing to note about car rental insurance is that most companies and insurers do not cover for single vehicle accidents (“SVA”). Most car accidents involve two or more vehicles, and those are typically covered. In the case of an SVA, however, the accident involves only your car – for example, if you hit a wild kangaroo or drive into a tree.

Most car rental companies either do not cover SVA or have an additional excess for them, meaning you can be fully liable for the damage. Coverage for SVA under rental vehicle excess of travel insurance policies may also vary widely between insurers, some of which specifically exclude SVA while others remain silent.

Choose your travel insurance plan carefully!

At the end of the day, be careful when choosing your travel insurance policy, as your decision can determine whether or not you will be covered when you need it most. While no plan can ensure that your holiday will not end in a nightmare, it helps to know that most emergency expenses will be taken care of.

Do not merely assume that all policies are the same and thus choose to buy the cheapest one – it may not cover what you need, defeating the whole purpose of buying travel insurance to begin with!

If you need help, talk to us about selecting the plan that would be best suited for you! You can email us at eb.admin@gyc.com.sg.

We wish you happy and safe travels!

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