Insurance: when holidays go (expensively) wrong

By Laurie Sullivan

Everyone’s heard a horror story of someone who has come a cropper over travel insurance.
They either don’t have insurance only to get sick/injured/ripped off overseas and their parents/family/friends had to sell a kidney to get them treated and brought home.
Okay, not a kidney, but you get the idea. It can turn into a very expensive nightmare.
Then there are those who are insured and make a claim only to get knocked back because of some obscure clause buried in the policy’s ‘fine print’.
These often-tragic tales become the stuff of travel urban legends, swapped in hushed tones by travellers who fervently hope that they’ll never add their own unhappy chapter.
The Australian government’s smartraveller website has many such stories. The altered names barely disguise the physical and financial pain visited on each luckless traveller and their families when holidays go wrong. 

• Uninsured Rita gets hit by a car while riding a bicycle in Malta and lands in hospital with a broken leg, leaving her family with a $4000 medical bill (cheap, as it turns out).
• Bernie's insurer declines to cover the $6000 for hospital treatment in Vietnam when his liver disease flares, arguing it’s a pre-existing condition. Broke Bernie ends up sharing a bed in the public hepatitis ward and can’t leave the country until his family stumps up the money.
• Evacuation from a cruise ship to a Noumea hospital following complications with her medication cost Maureen $60,000. Again, her insurer argued it was a pre-existing medical condition and the Australian pensioner was left to pay off the bill in instalments, helped by her family.
• Nazreen Massoud, aged 13, developed bronchitis in Singapore. It too was a pre-existing condition, so Nazreen’s family had to call on friends in Australia to loan them $17,000 to cover hospital expenses, additional accommodation and the cost of changing flights.
• Alex (22) was gored in the back during the Running of the Bulls in Pamplona. Three weeks in hospital with a punctured lung came to $32,000, not including the cost of accommodation and expenses for 4 months before he could fly home. You guessed it, Alex’s travel insurance wouldn’t cover him for failing to outrun a herd of angry Spanish bulls.  

Where to get sick – and not

As it turns out, Alex was lucky they don’t run with the bulls in Singapore. It’s the last place you’d want to end up in hospital.
Comparison service Finder calculated the difference in the cost of a one-night stay in an overseas hospital and the cost of a typical travel insurance policy for a 35-year-old traveller spending two weeks at the same destination.
The survey* compared the cost at the 20 most popular holiday destinations with Australians.
At $893 a night compared to a $73 policy, Singapore easily beats the USA ($751/$103), Hong Kong ($721/$75), and the Netherlands ($671/$83), while the cost of a hospital bed in Spain ranked number 15 – $487 compared to premium of $82.
The average medical claim in Singapore was $7229 – three times the average for travellers who get sick or injured in India, according to separate data from Allianz Global Assistance.
A traveller treated for gastroenteritis in Hong Kong could be hit with a stomach-churning $15,000 bill, compared with $1000 in the Philippines.
Financially, an uninsured traveller might be slightly more relieved to find themselves in hospital overnight in the Philippines ($34), India ($27) or Vietnam ($25), given the cost is well under the cost of the policy (around $73).
However, while the bed may cost less than the average premium, the standard of accommodation will almost certainly be well below first-world standards, according to Finder’s Bessie Hassan. Indeed, she says ‘extras’ like medicines and surgery may be exorbitantly expensive – something bed-cost figures don't reflect.

It pays to read your policy’s fine print

As always with any insurance policy, the devil’s in the detail.
When it comes to defining a ‘pre-existing condition’ most policies exclude pre-existing injuries and illnesses from medical and hospital expenses cover.
‘Pre-existing’ is usually defined as an injury and illness for which you have received medical treatment or taken medication in a specified period of time before cover commences. The period can vary from one policy to another, ranging from 21 days to a year – or longer.
Policy documents can run to 10, 20 or even 30 pages and require the trained eye of a lawyer to decipher.
It’s no wonder that so many travellers come unstuck. So, before signing up you should:
Read the fine print. Start the process of choosing a policy well before you go so you have time to read and understand the conditions. Securing cover early also means you could also be covered for delays or cancellations, which may not be the case closer to departure.
Know exactly what you're covered for (and not). Travelling to a country despite a government warning, or getting sick or injured being intoxicated, taking drugs or otherwise negligent could all be grounds for rejecting your claim. Ensure planned activities like snow skiing, snowboarding (on piste or off), high-altitude hiking or mountaineering, paragliding, bungy jumping and other activities are covered.
Think ahead about safety and security. Simple measures like placing locks on your luggage, locking doors and windows when you leave the hotel, keeping valuables (including your passport) in a safe in your room or at the front desk, and not leaving belongings unattended during transit could make the difference between being covered – or not.
Consider medical evacuation insurance. It covers the cost of transporting you to other parts of a country or outside it for treatment if you are seriously ill or injured in a remote area. Without this additional insurance cover, the cost of medical evacuation can easily run into six figures.
Be prepared to pay on the spot. Hospitals and medical professionals often demand payment before providing any medical services – even if you have insurance.

Here’s our insurance checklist

If the worst happens, this checklist will help you in making a claim.
- Photograph any expensive items you are taking (i.e. jewellery, handbags, or electronic items) and, where possible, record serial numbers.
- Email images of your valuables and a scan of your passport to a secure location.
- Make sure you have receipts for any valuables you take.
- Check the value of items in your luggage against your insurance policy. If you need to increase your coverage, call your travel insurer before you travel.
- If you buy something expensive overseas, take a photograph and keep the receipt in a safe place.
- If you are the victim of crime, report the theft to local police and get a copy of their report.
- Your travel insurer should offer a reverse charges phone number. If you need to make a claim, then contact your insurer while you’re travelling for advice.
- Take your travel insurance policy number with you (load it into your mobile phone and send it to your web mail, along with any emergency numbers).
- If you have to make a claim, include copies of all relevant documentation – the more information that you provide, the quicker your claim will be processed.
- When making a claim, keep your own copy of all supporting documentation. It’s usually quicker to make a claim electronically, but if you send your claim by post, register the envelope.

Get the travel insurance lowdown

The Department of Foreign Affairs and Trade (DFAT) makes it plain that when you leave these shores you are pretty much on your own, financially at least. DFAT won’t pay medical or legal bills.
With that in mind, the department has teamed up with independent consumer advocate CHOICE to provide two simple travel insurance guides for Aussie travellers. You can download the full guide or a summary on smartraveller’s insurance page.
The Australian Securities and Investment Commission's MoneySmart website has tips on what to look for when choosing a travel policy, as does the Insurance Council of Australia. The council also lists companies that provide travel insurance products and has a Find an Insurer service. 
Going without insurance is taking a gamble.
Sure, chances are nothing will go wrong. But, get ill, injured or robbed overseas and taking out travel insurance may end up being the best value-for-money decision of your entire trip.

* Read the Finder survey