In the aftermath of the Egyptian hot-air balloon tragedy, families of the victims have found themselves bitterly disappointed by their travel insurance. The problem? A proviso in some of the victims' policies. While it did cover aerial activities such as parachuting and "air travel as a passenger in a properly licensed power-driven aircraft", it did not include hot-air ballooning.
The tragedy has forced Hongkongers to review exactly what coverage they are getting when they buy travel insurance. The sad fact is that coverage is too often bought as an afterthought with a minimum of scrutiny. People then find themselves disappointed when they discover that their policy is full of holes. We asked travel agents and insurance sellers exactly what the public needs to know to ensure the right coverage when they buy travel policies.
The first step: read the plan. Joseph Tung, executive director of the Travel Industry Council, says: "Most people don't bother to review the terms and conditions of their policy."
The Office of the Commissioner of Insurance, Hong Kong's main insurance regulator, says that sellers of insurance products have the responsibility to explain policies to customers. So if you do not understand something, ask the insurance vendor to explain it: this is your right.
"A travel agency must have at least one licensed insurance agent in the company who can explain the policy. If they refuse to explain, complain to the council and their licence will be revoked," Tung says.
So what to look for when buying a policy? The short answer: medical coverage. Illness or an accident while travelling can be financially devastating. This is particularly true for travel in the United States, where medical costs can be extreme: a broken leg can cost HK$400,000. Indeed many policies make a point of excluding US coverage.
Insurance agent Bessie Ho Ying-ying says medical coverage needs closest examination: "If you are involved in an emergency like a car accident, the bills can be huge, especially in places like Australia, Europe, and America where medical expenses are high. You need to make sure the policy payout is big enough to cover this scenario."
Rohan Muralee, an assistant vice-president for the insurance brokerage firm Lockton, says people should always check if their policy covers pre-existing conditions. And while most will plans provide for emergency treatment, consumers should also check for medical evacuation. This is essential if someone is in a critical condition and needs to be flown home on a medical jet.
Any travel to a country that is on the Hong Kong government's travel alert list should be given extra attention, as travel insurance to such places is likely to carry more conditions. It may come as a surprise to most people that the Hong Kong government maintains a black travel warning against the Philippines. The country has been on a black list since 2010, when a gunman took control of a tour bus in Manila, and killed eight Hong Kong tourists. It is the only country besides Syria where the Hong Kong government advises against all travel.
Many Hongkongers, of course, still go to the Philippines, perhaps blissfully unaware of their government's warning, and the fact that insurance coverage for travel to the country can be severely limited because of this fact.
Ho says some policies work around this by covering personal illnesses in the Philippines but not injuries that result from terrorism or public disturbances. If travellers read their plan closely, they might be surprised by the specificity of terms, and by the many circumstances for which they will not be covered. Most believe insurance covers for flight delays or cancellations. However, Alby Lam, an agent with Charlotte Travel, says most insurance policies will only kick in when delays stretch to six hours or longer. Moreover, insurance typically does not cover delays caused by the airline, the most likely reason for a postponed flight. Policies instead usually cover for bad weather or security issues.
If you are doing anything vaguely extreme - skiing, scuba diving, paragliding - you need to look into whether the activity is covered and, if so, what the restrictions are, Muralee says.
For example, scuba diving coverage is likely to specify the depth of water, Lam says: "A general policy may not cover anything deeper than 30 metres.
An insurer may reject a claim if it thinks the accident is the result of recklessness by the policyholder, or if they drank too much alcohol.
If you are buying coverage for lost or stolen property, get your documents in order. Insurance providers will ask to see proof of ownership in the form of receipts or product registration. If you do not have this, Muralee suggests taking a photo of the items: "You probably won't get the full value back, but it proves that you did in fact own it."
Most claims also require a police report to be filed within 24 hour of the item going missing. "Insurance firms count on people not going through the hassle of putting in the claim form, receipt, police report, and everything else just to claim a phone or an iPad," Muralee says.
Finally, apply a bit of common sense. If you buy a cheap plan you are probably not getting much. "For not much more than HK$100, I can get travel insurance for a short-haul trip in Asia but probably with lots of restrictions. It's worth spending a bit more and going with a larger company who will be more flexible," Muralee says.