Covid has ruined thousands of travel plans and paused travelling for more than a year. Finally, there seems to be a light at the end of the tunnel, and travelling has begun again. Travelling is unique and fun but can come with unexpected risks.
Travel insurance is a policy you purchase that protects you from certain financial risks and losses that can occur while travelling. These losses can be minor, like a delayed suitcase, or significant, like last-minute cancellations, natural disasters or overseas medical emergencies.
Background of Client
Our client is a travel enthusiast who enjoys visiting new places all around the world with her family. Even if it is a short journey or a long journey, unexpected situations can happen at any time. When travelling to different countries and different airports, there is a high risk of unfortunate events. These events include an airline losing property, falling sick in a foreign country, cancelling flights, or being stuck in a country due to natural disaster/political risks.
The client had planned a trip to the Philippines for her family (two adults and two kids) and paid a significant amount for hotels, flights and activities. Unfortunately, four days before departure to the Philippines, there was news of a volcano erupting. As a result, the client decided to cancel the trip. As it is was late cancellation, most airlines will not refund all the money. However, the flights did refund a certain amount of the money as it was not a last-minute cancellation.
A situation like this could have resulted in the family potentially losing a large sum of money and not being able to book another trip. The non-fundable value was HKD 5260.
How Travel Insurance was a Solution?
The client had a supportive travel insurance (annual cover) that she had bought through Red Asia Insurance. Travel insurance can reimburse you for non-refundable, pre-paid trip costs if you have to cancel your trip for a covered reason. In this case, the client had to provide all proof of tickets, hotel booking and other details to the insurer. The insurer will use all the details to understand if the case fits under the travel insurance policy and then provide the appropriate funds.
As the cancellation reason was a natural disaster, the case was approved, and the travel insurance company provided the non-insurable costs. Insurance pay-out meant the client did not lose any money regarding this trip. The client could use the airline company and the insurance company refund to plan another family trip.
The insurance paid the total amount of non-refundable costs, which was:
Non-refundable costs paid: HKD 5,260.00
When you are travelling, there is a non-ending list of things that can go wrong. Therefore, insurance companies design travel insurance to protect the insured against these unpredictable events. Travellers should purchase travel insurance before booking a trip.
Although during Covid times, travel insurance will not cover any travel disturbance caused by Covid-19 due to the rise of the pandemic and travel regulations changing too frequently.
Travel insurance is the perfect insurance for anyone who enjoys travelling and has to travel for work too. Anyone can purchase travel insurance for a single journey or an annual cover.