Travel insurance comes to your rescue in various unforeseen circumstances, such as lost belongings, flight delays, medical expenses, and trip cancellations, to name a few. However, before diving into random choices, let’s explore the essentials to ensure you find the perfect travel insurance fit. This blog post reveals the key factors you need to consider so you can travel worry-free with the right insurance by your side!
Table of contents: Travel insurance
Understanding travel insurance can be overwhelming, so let’s break it down into different sections:
- General coverage of travel insurance
- Types of travel insurance
- Factors affecting the premium of travel insurance
- Travel insurance pitfall: Read the fine print!
- Travel insurance: When to buy? The sooner, the better!
- Frequently asked questions: Travel insurance
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- Medical Expenses
- HK$500,000
- Travel Cancellation
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Premium
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- Medical Expenses
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- Trip Cancellation
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- Loss/Damage of Baggage
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- PremiumPremium
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【MoneySmart Exclusive Offer】
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General coverage of travel insurance
Before we delve into the details of travel insurance, let’s start with the basics:
Each insurance policy offers different types of coverage, but most travel insurance plans include:
- Protection against loss or theft of belongings like wallets and luggage
- Coverage for flight delays and trip cancellations
- Medical expense coverage for unexpected accidents or illnesses
- Coverage for car accidents during travel
Please note that specific coverage can vary between insurance policies, so it’s important to review the terms and conditions of your chosen travel insurance plan. Here are some of the coverage focuses.
Flight delays
Most insurance policies provide compensation for flights delayed by 6 hours or more. To apply for compensation, you may need to provide the boarding pass, obtain a certificate from the airline stating the reason for the flight delay, and keep receipts for transportation and accommodation expenses incurred due to the delay.
Bad weather, natural disasters, mechanical failures, black travel warnings, and strikes are generally accepted coverage areas.
Lost luggage
Due to the regulations set by the Montreal Convention or Warsaw Convention for most international flights, if your luggage is lost by the airline, whether it is checked or carried onboard, you are generally eligible for compensation. If you discover missing luggage, contact the airline’s baggage department, and the compensation amount will be assessed based on the items in your luggage.
In the event of lost luggage during your trip, it is often treated as a personal matter. First, you need to file a police report within 24 hours and list the items in your luggage. Please note that some travel insurance policies have exclusions, such as coverage for electronics, credit cards, fragile items, and antiques.
High-risk activities
Insurance companies usually define high-risk activities as “amateur dangerous activities” or “amateur sports.” Generally, the coverage provided by insurance companies includes winter sports like skiing and snowboarding, aerial activities like hot air ballooning and skydiving, water sports like scuba diving and kayaking, and land activities like mountaineering and rock climbing. However, covered activities may vary among insurance companies, so be sure to review the specific coverage conditions.
Rental car excess
If you plan to rent a car, pay attention to the rental car excess. Rental car excess refers to the amount you need to bear if the car is damaged or stolen while you are abroad. For example, if the rental car company’s insurance excess is HK$2,000 and you need to compensate HK$3,000 for damaging the car, you will be responsible for HK$1,000, while the remaining HK$2,000 will be covered by the rental car company.
Types of travel insurance
Travel insurance is typically divided into two options: “annual” and “single trip.”
Single trip insurance covers a specific trip duration, usually up to 6 months (depending on the insurance company), and the premium is calculated based on the number of travel days. On the other hand, annual insurance allows for unlimited trips within a year, with each trip typically lasting up to 3 months.
| Type of Insurance | Duration | Premium Calculation |
|---|---|---|
| Single Trip | Up to 6 months (depending on the insurance company) | Based on the number of travel days |
| Annual | Unlimited trips within a year | Each trip up to 3 months |
So, which travel insurance plan is cheaper? Single trip or annual coverage?
The answer: It depends. Let’s take the example of Anson, an avid traveler who frequently visits Japan more than 10 times a year. Anson wants to stick to his saving plan while ensuring he has the necessary insurance coverage.
Considering Anson’s preference for 3-day short trips to Japan, we found that the Allianz Travel – Bronze Plan offers the cheapest single-trip insurance plan among all the options, providing coverage for up to HK$1,000,000 in medical expenses.
| Type of Insurance | Duration | Total Premium | Coverage |
|---|---|---|---|
| Allianz Travel – Bronze Plan | 3-day trip x 10 | HK$48.54 x 10 trips = HK$485.4 | Up to HK$1,000,000 medical coverage |
| STARR Companies TraveLead Essential Plan | Annual Coverage | HK$800 | Up to HK$500,000 medical coverage |
In this case, opting for single trip travel insurance seems like a suitable choice for Anson. He can enjoy a cheaper insurance plan while obtaining more extensive medical coverage if that is his primary concern.
Why consider annual travel insurance?
For frequent travelers, annual travel insurance can be a game-changer compared to purchasing single trip insurance every time.
Imagine the convenience of buying insurance once and having it cover all your adventures for the next 12 months. No more last-minute insurance shopping before each departure! Although the upfront cost of annual travel insurance may appear higher, it allows you to embark on spontaneous trips without worrying about insurance coverage.
Factors affecting the premium of travel insurance
The premium of travel insurance is influenced by 3 main factors:
- Destination
- Duration of the trip
- Coverage of insurance plan
The premium of a travel insurance plan is determined by factors such as the chosen destination, the duration of the trip, and the coverage provided by the insurance plan. These elements shape the cost of the travel insurance plan. You can find out more about the popular travel insurance price overview here.
Travel insurance pitfall: Read the fine print!
When purchasing travel insurance, it’s crucial to carefully read and understand the terms and conditions of the policy. Pay attention to exclusions, limitations, and any specific requirements for making a claim. This will help you avoid any surprises or disappointments when you actually need to use your insurance coverage. Here are the common travel insurance pitfalls:
2 things to be cautious about when insuring the elderly
Travel insurance can be a challenge for older individuals who love to travel. While the maximum age limit for most insurance products is typically between 80 and 85 years old, there’s another concern to consider. Even if they manage to purchase insurance, they must be wary of compensation limits. It’s disheartening to discover that around 70% of insurance products intend to reduce coverage for medical expenses and personal accidents for the elderly.
This reduction often amounts to a mere 50% of the original coverage. It’s essential for retirees to carefully review the terms and conditions before making a decision.
Differences in the definition of emergency assistance coverage
Emergency assistance in travel insurance typically encompasses services such as emergency medical transportation, repatriation of remains or ashes to Hong Kong, consoling visits to relatives, and escorting unaccompanied children back to Hong Kong. It’s important to note that while these coverage items have standard names, the definitions may vary among insurance companies. Thus, it is advised for consumers not to solely rely on the names of the items when comparing different insurance policies.
Restrictions on diving and mountaineering coverage
If you’re an adventure seeker planning to explore the depths of the ocean or conquer towering peaks during your trip, it’s crucial to check if your travel insurance is up to the challenge. While most policies do offer coverage for activities like scuba diving or snorkeling, it’s important to note that there are usually depth limits, typically ranging from 30 to 45 meters. When it comes to hiking and mountaineering without specialised equipment, only 21 products provide coverage, but here’s the catch – 10 of them impose altitude restrictions, varying from 3,000 to 5,000 meters. So, make sure to choose your insurance wisely and plan your daring adventures accordingly!
Travel insurance: When to buy? The sooner, the better!
Best to buy before departure
It is generally recommended to purchase travel insurance before your departure. After booking your flight tickets, consider buying travel insurance. In case your trip is affected by bad weather, you can receive compensation for flight delays or cancellations caused by adverse weather conditions.
Adjust coverage level in advance
If you plan to engage in high-risk activities during your trip, such as hot air ballooning or mountain climbing, it’s wise to adjust your coverage level in advance for a safer journey. When purchasing insurance, make sure to understand how insurance companies classify high-risk activities and the procedures for adjusting coverage levels.
Compare prices and buy early for the best deals
If you intend to purchase travel insurance, it’s advisable to compare the coverage and prices offered by different insurance companies in advance. This way, you can secure early protection and enjoy the best deals.
MoneySmart’s Top 5 Most Popular Travel Insurance
Which travel insurance is good for travelling to Japan? It really depends on your travel needs and the coverage you would want! If you are planning to ski or drive in Japan, it would be better to get a travel insurance that offers ski coverage and car rental excess. Check out our latest report on MoneySmart’s Top 5 Most Popular Travel Insurance. Not only would we reveal the most purchased travel insurance plans of the year, but we would also uncover the preferred travel insurance for Hongkongers’ favourite destinations, including – you know it, Japan!
Frequently asked questions: Travel insurance
What does travel insurance cover?
Travel insurance typically covers a range of unforeseen circumstances such as lost belongings, flight delays, medical expenses, and trip cancellations. However, specific coverage can vary between insurance policies, so it’s important to review the terms and conditions of your chosen travel insurance plan.
What are the types of travel insurance?
Travel insurance is typically divided into two options: “annual” and “single trip.” Single trip insurance covers a specific trip duration, usually up to 6 months, while annual insurance allows for unlimited
When is the best time to buy travel insurance?
It is generally recommended to purchase travel insurance before your departure. After booking your flight tickets, consider buying travel insurance. This way, you can receive compensation for flight delays or cancellations caused by adverse weather conditions. Additionally, if you plan to engage in high-risk activities during your trip, it’s wise to adjust your coverage level in advance for a safer journey.
How can I find the best deals on travel insurance?
If you intend to purchase travel insurance, it’s advisable to compare the coverage and prices offered by different insurance companies in advance. MoneySmart helps you compare all the popular travel insurance plans on the market. This way, you can secure early protection and enjoy the best deals. Comparing prices and coverage can help you find the most suitable travel insurance plan for your needs.
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Still looking for your best plan? And don’t know which one that can offers the coverage you need but doesn’t break your bank? Check out the Hong Kong Travel Comparison to find out more!
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