A consumer bought travel insurance for her trip. She has to cancel the trip to North America due to the H1N1 virus. The airline refused to refund the ticket fare, as the ticket was not refundable. The insurance company refused to pay for trip cancellation due to H1N1 virus under the travel policy, as it was not specifically covered.
The response of the insurance company is unsatisfactory, for the following reason. A consumer buys travel insurance to protect against loss due to such unexpected events. The consumer is acting responsibly by cancelling the trip on the advice of the health authorities. It is unfair for the insurance company to refuse to meet this claim for reimbursement, by sticking to the narrow cover of the insurance policy.
Insurance companies make large profit on travel insurance, with claims amounting to less than 30% of the premuims paid. They pay high commission to travel agents to sell the insurance. They should act fairly by honouring legitimate claims, even though they are not within the tight legal defination of the cover.
If the insurance companies continue to think only of their profit, they will lose the trust of consumers.
13 comments:
The following is a personal experience.
Once on a trip to Europe, I had the misfortune of havng my luggage stolen at Heathrow ( a common experience as approximately 10% of check in bags are "misplaced" at Heathrow).
I had purchased travel insurance and proceeded to make a claim for the lost luggage.
I subsequently found out the claims process to be designed in such a way to ensure that you could hardly get anything in spite of the promises of comprehensive coverage when you purchase the insurance.
For example, other than itemising what was in the luggage, the company required that I submit receipts of all the items. When I indicated that I no longer had the receipts for most of the items in the luggage, the company indicated that I would not be able to make a claim.
For "large ticket" items which I placed in the luggage for which I had a receipt (e.g. $400 plus electric shaver, $1k plus business suit), I was informed that I could not make a claim as the policy did not cover "valuable items".
After nearly 2 months of to and fro, all I managed to claim was abt $80 for a jacket I bought over there to protect me from the cold.
After that painful experience, I have never bought any travel insurance. It is much more cost effective to put the premium I would have paid into a seperate business account and take money from there as and when the need arises.
Agreed with Aurvandil.
On a trip to Korea recently. A bag did not arrive at the baggage carousel. I had purchased travel insurance from AIG.
I was told then I should purchase essential items and I can make a claim on those.
Upon the end of my trip and returning home, I still did not recover my bag. I was told to make a claim as lost luggage.
AIG has a convoluted claim process. I needed to have the following-
1. Original Insurance Certificate (They did not give one, it was emailed to me)
2. Letter from airline confirming the loss and their offer of compensation (within 30 days of the loss, which airline works that fast?)
3. Receipts of items lost/proof of purchase (it was an outbound flight, there were no receipts on my clothing, underwear and personal items).
The claim was such a nightmare that I gave up. Luckily the airline found the bag 2 months later and sent it back to me without a single item lost.
Buyer of travel insurance beware.
Not true. I think depend on which insurance company you buy from. If premium is lower than other company, you can expect the claim procedure is not as good.
Yes my hubby once lost the whole bag when coming back from Bangkok and the bag never make it back. First he must claim against the airline but they only pay USD22 per 1kg and his bag was 11kg, so he get USD242 but his whole value worth more than that, so he claim the remaning amount from an insurer by declaring every item in his bag (including the bag itself) The insurer need the insured to declare when the items were bought so that they will apply the depreciation %.End up no need to give receipt for clothes etc. Maybe receipts need for very expensive stuffs! He claim back not full sum but at least better than none
Anyway, I think one should buy travel insurance not for the minor item claim but more for own accident or illness especially when oversea. We don't save that little money and later get big headache.So everytime we go oversea, sure buy travel insurance
Aurvandil
You should not ignore buying travel insurance, particularly because of the " Emergency Medical Evacuation " and " Repatriation " benefits. In my opinion, these are important coverage.
Anybody with a sound mind is unlikely to keep receipts of all items packed in the check-in luggage.
But without a travel insurance, how to feel safe and secure?
starlight
I understand that buying travel insurance is not just to protect our luggage but also our safety. However when something bad happen, the insurer will make the process of making a simple claim so complicated and frustrating.
We may like to try think on the side of the insurer.
If an insurer pays so easily and everyone knows that the insurer will pay without question, many of us may try to add more things in the luggage as if they are really lost. Eg, a $10 jacket become $50. A $200 digital camera becomes a $500 Video camera, etc...
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Thank u
If the insurance company won't even treat you fairly for a small claim, what are the chances the company will treat you fairly for a large claim?
I agree with Aurvandil. I too have cause to make a claim for a handphone battery, charger and a memory card. For such items like these they even asked whether a police report is made. It is a silly suggestion because when one travels between two countries, where should the police report be made when where it is lost is undeterminable. Furthermore, people do not keep receipts for small items and they do not cover for valuable items. So it is the classic case of heads they win, tails you lose.
As for claims for the ultimate, when you are no longer around, the good thing is that you are no longer subjected to the frustrations and merry go round but your loved ones will have to. So that is why when they say "Peace of Mind", that will be the last thing they are giving you.
Perhaps a travel insurance is no longer necessary nowadays as the insurance companies are trying not to allow claims. I bought a travel insurance for my trip to melbourne on 1st May. The trip is supposed to commence on 18th jun and on the time when I purchase the travel insurance Australia was free from H1N1. I called up the insurance company to check if the travel insurance covers claims for H1N1 , they told me NO. I argue with them that I was not told of this exclusion when I bought it and the policy didn't mention any exclusion regarding this , they sent me an email stating : It is the insurer's responsibility not to subject themselves to any known risks prior to or during the trip.
I asked them if I were to cancel the trip so that I will not subject myself to the H1N1 risks as stated in the policy, am I able to claim the expenses incurred.Their answer to me was a NO.
I wonder what is the point of buying travel insurance if these unforeseen risks are not covered.
I've checked with a few travel insurance and it's the same. You cancel based on 'peril' or risk, it's your problem that you're afraid and can't claim. I booked a trip to China very early and paid the deposit. If I choose to cancel I will lose cash. Thus all I can do is to quickly buy insurance while China is not yet a MOH 'affected' area, so at least if I get H1N1 claim will be honoured, said the insurer.
I do understand the insurer's position not to pay for cancellation also. If H1N1 is going to spread widely, and if many countries slowly turn yellow, then it's almost guaranteed that the insurer will end up reimbursing everyone. People may just book early without careful consideration, and cancel easily later. So insurers stick to only reimbursing real H1N1 cases.
My tour agency has not cancelled by itself though China situation growing worse. What's an issue is the seeming weight of decision to travel on the buyer vs tour agencies, which will never cancel. If customer cancel, he loses what he's paid. Tour agency no worries, will never cancel and reimburse (even though they don't really lose, just won't earn) - if customer on the tour really gets H1N1, agency may or may not help facilitate, he risks being dumped aside. Agency is in best position.
Given current situation my take is– either avoid travel for now, or book your travel last min so that country situation is like what you assess when you buy. Seriously, the situation wasn't that bad at first. The country which is very international, and one of the first to get it from Mexico, just didn't really make the effort to take careful action. At a personal level, its people don't care enough and thus now it has spread to the rest of the world.
Yes it is right way of travel insurance but i don't know why insurance company create a bad formality with a customer.But this post give us a better way to choose a better policy.
Travel Insurance Compared
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