A survey of over 4,000 travellers by global research firm TNS has found that 31 per cent of New Zealanders said they did not take out travel insurance before going on holiday, risking huge medical bills if they are in the wrong place at the wrong time. TNS’ research found that of those who were willing to travel uninsured, 43 per cent said that they were happy to risk it, while 25 per cent gave their reasons for not taking out cover as ‘being covered by the country ’s health system’ – such travellers were relying on reciprocal health agreements that New Zealand has with certain countries such as Australia and the UK. Craig Morrison, chief executive of online travel insurer Southern Cross Travel Insurance (SCTI) warned travellers that there is a false sense of security offered by the reciprocal agreements, as they might not cover all the costs resulting from an accident or emergency. He said: “The fact is these agreements do not cover all costs that arise when an accident or emergency medical situation occurs – such as ambulance travel, medical support and flight costs for repatriation to New Zealand, or bringing a family member out [to where the policyholder is].”
SCTI has also recently warned travellers to check the details of their travel insurance policies to ensure they are not paying for unnecessary or what it terms ‘illusory’ benefits. Craig Morrison explained: “For example, a number of insurers are offering personal liability cover in the millions. But in more than 30 years of underwriting travel insurance, SCTI has never had a personal liability claim in excess of $100,000. Furthermore, claims under this category are extremely rare, with SCTI only receiving a handful of personal liability claims each year.” While some parts of policies are apparently giving overly generous offerings, Morrison was also keen to highlight that many consumers have been left exposed to additional costs in the past as their insurance did not provide sufficient benefits to cover travel delay. “After the 2010 and 2011 volcanic eruptions in Iceland and Chile, a lot of companies reduced their travel delay maximum to only $1,000 or $2,000 – nowhere near enough for such major events,” said Morrison, adding: “Our customers who were stranded in Europe claimed on average $500 a day – for those stuck in Paris, it averaged $1,000 a day. Without a policy like ours, they would have been paying out of their own pocket within a couple of days.”
Morrison went on to warn travellers about another potential ‘hook’ increasingly used by insurers, which is to offer a basic policy at a low cost, but then augment the cover by offering add-ons to the policy that will cover specific activities, for example riding a scooter. Morrison believes: “It’s fairer for consumers to have one simple, all-encompassing policy, rather than a plethora of confusing options designed to make the policy appear cheaper.” Statistics released by the insurer show that last year, its top 10 most expensive claims paid were all medical related, with the most expensive being $208,000 paid to a policyholder who fell ill while in the US who needed extensive healthcare treatment after he discovered while on holiday that he needed emergency treatment for cancer.