The RaW Guide to... Travel Insurance (Part 2)

This is Part 2 of Travel Insurance/ Takaful as previously discussed on Twitter when I was curating @twt_backpacker for about 10 days in early July 2014. If you haven't, you might want to check out Part 1 first. If you prefer to read the original tweets in Malay, you can do it here or check out #bpInsurance.

Part 2 of this topic covers:

• Choosing a travel insurance/ takaful
• Just do a quick survey and study :)
• Beware of Exclusion Clause!
• Travel insurance sold by airlines
• Questions & Answers

Part 1 of this topic (previous blog post) covers:

• What is insurance?
• Is insurance haram, i.e. not permissible in Islam?
• What is travel insurance/ takaful?
• Does one really need to get a travel insurance/ takaful? Is it compulsory?
• Wouldn't it be a waste if nothing happens?

(You can just jump straight to any of the sections above by clicking on the links.)

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Choosing a travel insurance/ takaful

There are people who choose to take out travel insurance/ takaful, and there are people who don’t. Just like curry puffs, some people buy them, some don’t. But when we decide to take out travel insurance/ takaful, there are too many companies out there that offer them in all sorts of packages. Again, just like curry puffs. There are plenty of stalls that sell them especially at Ramadan bazaars. And there are a variety of curry puffs as well. Expensive, cheap, beef curry puff, chicken curry puff, potato curry puff, and even sardine curry puff. So when we decide to buy curry puffs, we do some quick survey and buy what is best for us according to our budget and taste. What we believe is the best curry puff for us is not necessarily the best for others. Again, it depends on individual’s tastes and budget.

It’s the same with travel insurance/ takaful. What is good or best for me, is not necessarily good or best for others. The need for protection, the amount or value of protection, the types of protections, etc. all depend on individual’s requirements. Each one of us has his/ her own travel style, each with his/ her own needs. And each of us has his/ her own budget. That’s what important to bear in mind.

Some of us just travel domestically. Some travel overseas. Some travel just once or twice a year. Some others, maybe every month. Some love to have a relaxing holiday while some enjoy doing extreme sports like skiing, snowboarding, skydiving, etc.

And so, there are plenty of travel insurance/ takaful products in the market that cater to a variety of needs and travel styles. Just as there is no right or wrong way to travel, there is also no right or wrong travel insurance/ takaful. As long as it caters to your own specific travel needs.

Therefore if anyone asks, which travel insurance/ takaful is the best, I rarely answer the person unless if I have specific info about their travel plan & style which can be taken into consideration.

I mean, if I say that curry puffs from IKEA are the best, some of you might say otherwise or maybe complain about their price. After all, that’s what an insurance/ takaful agent is for. To help explain and recommend a suitable travel insurance/ takaful plan that is based on your own needs and requirements, not someone else’s. I repeat, based on your own needs and requirements, not someone else’s. Why pay more for supposedly the best travel insurance/ takaful out there when you might not need even half of the coverage that it offers? Don't you think it's rather silly?

Just do a quick survey and study :)

We can easily do our own simple study and survey based on what is offered by local insurance/ takaful companies using the following steps: 

1. Use the 4 categories previously mentioned in Part 1 for comparison purposes; 
2. Choose the type of coverage needed;
3. Decide how much cover you want; and
4. If the resulting premium/ takaful contribution is within budget, then we can proceed. If not, adjust coverage accordingly.

As an example (not to be misconstrued as a recommendation), Etiqa Takaful offers 4 types of travel takaful schemes under their “World Traveller Care” products. Some are basic, some are more comprehensive. The cost also reflects this. The more comprehensive the cover, the more expensive the travel takaful scheme is. Other insurance/ takaful companies in general also offer something similar with different amounts of cover.

So what we need to do is just check out several travel insurance/ takaful products and decide what is best for us. Just like earlier, if we want the best curry puff, we need to check out several stalls first and not just buy at the first stall that we see selling curry puffs.

Insurance companies like AXA, Prudential and ACE do provide information about their travel insurance products on their website. Takaful companies like Etiqa, HSBC Amanah Takaful, HLMSIG Takaful and Takaful Ikhlas also do the same. Everything is at the end of your fingertips! Easy, right?

This RinggitPlus website is quite good in providing a list & comparison of both single and annual trip travel insurance/ takaful plans. However, do crosscheck with the respective insurance/ takaful company's website to ensure all information is correct and updated. And please continue reading this blog post first, heh! ;)

Beware of Exclusion Clause!

Apart from looking at the types and amounts of cover, do not forget to look at the Exclusion clause. For example, a common exclusion is “extreme sports” like skiing, snowboarding, skydiving, bungee jumping, etc. These are usually not covered unless if you take up the extension to the travel insurance/ takaful policy and pay extra.

It’s the same with driving/ travelling in a rented car or motorhome. Some travel insurance/ takaful cover this, some do not. Usually travel insurance/ takaful only covers public transportation. So if you plan to do any of these, don’t take it for granted. Make sure you’re well covered. Don’t think that just because you already have a travel insurance/ takaful, you’re automatically covered. Do double check and confirm it.

If we want to eat sardine curry puff, make sure that we buy sardine curry puff and not beef curry puff. Or else we might be left wanting. :(

Travel insurance sold by airlines

For most of us, we only know of travel insurance when we’re offered to buy them at the time when we buy a flight ticket online. Are these travel insurance the same like the ones being offered directly by insurance and takaful companies out there? The answer is maybe yes, maybe not.

AirAsia Insure, for example, covers flight related risks only if you just buy a one-way ticket. If you however buy a return ticket, it also covers medical costs and personal accidents during your whole trip. So it depends on the types of air ticket (one-way or return) and the types of coverage opted. There isn’t any simple yes-or-no answer to this question.

Travel insurance that are sold by airlines are actually travel insurance products of insurance companies which have been designed and packaged for airlines to sell. For example, as at time of writing, AirAsia (in Malaysia, at least) uses Tune Insurance Malaysia Berhad whereas Malaysia Airlines uses Etiqa Insurance Berhad. In cases like this, I believe AirAsia & MAS work as a corporate agent and get commissions from the sales of their travel insurance products.

Not dissimilar to those who gets a commission for selling curry puffs at their stalls when someone else makes them at home, heh! :)

So should we buy travel insurance that is sold by these airlines or any other airlines for that matter? It really is up to you. It’s your choice. As long as all the risks that you want to cover are covered.

However do I recommend it? No, not really. Let’s just think about its irony for a bit, and not just about curry puffs. :) We buy travel insurance from an airline to protect us from things/ events that might involve the airline itself. A bit ironic, no?

Irony aside, I do recommend that we get our travel insurance/ takaful directly from insurance or takaful companies. There are plenty of choices available out there with possibly a more comprehensive cover too. And it might just work out cheaper too.

“But it’s easier buying it from the airline as we can do it online while we buy our flight tickets!” I hear what you're saying. Well, you can get travel insurance/ takaful online too from some of the more well-known insurance/ takaful companies.

If we can find and buy (frozen) curry puffs online, why not travel insurance/ takaful? :)

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(Actual) Questions & Answers 

Q: I seldom buy travel insurance/ takaful if it’s just a domestic flight. 

A: It really is up to individuals. And it depends on luck too. From the many flights I’ve taken so far, the only time my luggage didn’t arrive on the same flight as me was when I flew domestic. 

Q: I usually don’t buy travel insurance/ takaful if it’s just a domestic trip. Is it okay not to take travel insurance/ takaful? 

A: A lot of people do not take travel insurance/ takaful if they are just travelling domestically. This is probably because they are already covered by their company’s insurance/ takaful policy especially with regard to medical treatment & hospitalisation. Such an insurance/ takaful policy however do not cover other travel-related risks like flight delay, loss luggage, forfeited accommodation, etc. 

Q: I always skip travel insurance because I assume I’m covered under my credit card travel insurance. Is it not enough? 

A: Is it enough? Maybe yes, maybe no. Do check directly with your credit card company on what is covered and what is not, including the amount & exclusions. Do not just assume that you’re covered. 

Q: If I travel for more than 10 days and do a lot of outdoor activities, what kind of travel insurance/ takaful should I take? 

A: Coverage period can usually be selected from say, 7 days, 14 days, 30 days, etc. For outdoor activities, just make sure that they are covered by the policy by checking the Exclusion clause. 

Q: I don’t really take travel insurance but I do have a medical insurance cover. 

A: A medical insurance helps while you’re travelling domestically but unless the coverage is on worldwide basis, you would still need to get covered if you’re travelling overseas. It can be very costly to get a medical treatment in some countries. 

Q: Travel insurance/ takaful is good if you’re travelling to high-risk countries. 

A: It’s not necessarily just for high-risk countries but also for countries where a medical treatment can easily cost a bomb. Besides, some travel insurance/ takaful do not cover countries which your country has officially advised against travelling to. So do double check. 

Q: My work place provides free travel insurance/ takaful. Just need to fill up a form and that’s it. We can however only apply for it once a year. 

A: Yes, some companies, including Malaysian govt. departments, do provide such facility on limited basis. If you need more coverage or travel a lot more, that you’d probably need your own travel insurance/ takaful. 

Q: Is there any travel insurance/ takaful cover for a long term travel regardless of any country? 

A: Yes, there are plenty. There are coverage periods like 3 months, 6 months and maybe even a year. Coverage is also based on “Regions”, not countries. 

Q: So we don’t need to get a new travel insurance/ takaful cover every time we enter a new country during our trip? 

A: No, there’s no need as long as the countries are within the same “Region” covered. Usually the regions are: (1) Domestic; (2) Asia (please double check list of countries. In some cases, not all Asian countries are covered under Asia); (3) Rest of the World excl. USA/ Canada; and (4) Rest of the World incl. USA/ Canada 

Q: How about claim procedure? Is it easy? 

A: Whether or not a claim process is easy depends on the types of claim. Just make sure that you have original supporting document, e.g. police report, medical report & bills, etc. when you submit your claim. 

Q: Can we get compensation on the spot, say for example if we’re robbed? 

A: Compensation is not on the spot but your insurance/ takaful company might still be able to assist you. For cases like hospital admittance, there are travel insurance/ takaful companies that can assist with admittance without you having to pay any deposit or bill.

Okay, that's it, folks! You survived! Haha! Let's go and grab some curry puffs! ;) If you have any more questions regarding travel insurance/ takaful, feel free to ask in the comment section below. No promises but I'll try to answer if I know the answer to them.