Tuesday, April 26, 2011

Travel Insurance - Earthquake & Radiation risk

I have problem with insurance claims after the trip in Japan. The claim for additional travel expenses due to earthquake and radiation leak seems strange for many insurance personnel. Some of them are not prepared for the claims, and have no knowledge on that. Other just trying to reject your claim upright, hoping that you did not claim due to the trouble in claiming. That is the problem with the insurance company. The same is with the credit card company, there is no help either from them. But insurance companies from New Zealand, and some countries are very proactive to provide with advises and list of what to do for their customers. Other country,where their insurance companies are like their embassies, do not know what to do during crisis, but hiding the problem inside the carpet like an ostrich.

The lesson learn is choose your travel insurance policy wisely; and buy only from reliable company.

Travel Insurance
Travel insurance is insurance that is intended to cover medical expenses, financial default of travel suppliers, and other losses incurred while traveling, either within one's own country, or internationally. Temporary travel insurance can usually be arranged at the time of the booking of a trip to cover exactly the duration of that trip, or a more extensive, continuous insurance can be purchased from travel insurance companies, travel agents or directly from travel suppliers, such as cruiselines or tour operators. However, travel insurance purchased from travel suppliers tends to be less inclusive than insurance offered by insurance companies. Travel insurance often offers coverage for a variety of travelers. Student travel, business travel, leisure travel, adventure travel, cruise travel, and international travel are all various options that can be insured.

Insurance package by credit card companies

Many people deeply regret not taking out travel insurance. They think their credit card accident cover, home insurance, or private health cover is sufficient. Here are the exclusion clause of the insurance package policy provide by a global reputable credit card company, the protection for a platinum credit card members disclosed that :

This Section does not cover any claim directly or indirectly caused by, resulting from or in connection with :
a. war, invasion, acts of foreign enemies, hostilities or warlike operations (whether war be declared or not), civil war, mutiny, rebellion, revolution, insurrection, military or usurped power,
b. nuclear reaction, nuclear radiation or radioactive contamination,
c. riot,
d. any act of terrorism,
For this purpose, an act of terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organization(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear.
This exclusion also excludes loss, damage, death, injury, illness, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism.
e. the Insured Person :
i. engaging in air / water / land / travel except as a passenger
ii. engaging in a criminal act,
iii. committing suicide or intentional self-injury (whether felonious or not) or any attempt thereat while sane or insane

It was clearly stated that terrorism,riot,nuclear reaction, nuclear radiation or radioactive contamination and others are excluded from your credit card insurance.

T & C of typical Travel Insurance Policy
The most common risks that are covered by travel insurance are:

* Medical/dental expenses
* Emergency evacuation/repatriation of remains
* Return of a minor child
* Trip cancellation/interruption
* Accidental death, injury or disablement benefit
* Overseas funeral expenses
* Curtailment
* Delayed departure, missed connection
* Lost, stolen or damaged baggage, personal effects or travel documents
* Delayed baggage (and emergency replacement of essential items)
* Legal assistance
* Trip Cancellation
* Flight Connection was missed due to airline schedule
* Travel Delays due to weather
* Medical Emergency and hospital care (Accident or Sickness)

Common Exclusion

* Pre-existing medical conditions
* War or terrorism - but some plans may cover this risk, and some do cover for acts of terrorism[1]
* Injury or illness caused by alcohol or drug use
* nuclear reaction, nuclear radiation or radioactive contamination,

You need to check the exclusion terms in your insurance policy.

Cancelling or cutting a trip short coverage

A good insurance policy will cover you for cancelling or cutting a trip short. Check carefully to see exactly what you’re covered for:

* accident
* illness
* pregnancy (unknown when you buy the policy)
* jury service or witness summons
* home emergency: fire, storm or flood, burglary
* redundancy
* strikes
* bad weather – affects the departure of flights and ships.

Ensure your policy:

* will refund the full cost of your holiday
* pays out if you need to cancel or cut short a trip because you fall ill for example
* covers pre-paid expenses such as excursions
* covers extra costs incurred to get home.

Try to book with a travel company that holds a licence issued by travel authority e.g. an ATOL (Air Travel Organiser’s Licence)in UK, or is a member of an association that can offer financial protection for your travel arrangements, e.g. ABTA or AITO. Always ask your travel company if protection applies to your travel arrangements. If it doesn’t, the insurance company may be able to offer suitable insurance to cover you.

Travel insurance and natural disaster e.g. recent Japan earthquake

Earthquake is Acts of God, which is unpredictable events that can impact your travel and holiday plans. You'll find cancellation, curtailment and trip interruption clauses in most travel policies, but did the policy cover Acts of God events like earthquake?.

Earthquake and tsunami are excluded although they are not mentioning in the policy T&C. Earthquakes were not excluded explicitly(or in writing in black and white) by the policy, but they did not need to be – they were not covered in the first place. There was no cover for curtailment following a natural disaster in the holiday destination.

The nearest section of the policy to the circumstances was curtailment. This provided that the insurer would pay if the holiday was curtailed by a policyholder’s returning home before the end of the holiday because of specified reasons such as death, illness, etc. But it did not include curtailment following a natural disaster in the holiday destination. I believe we always can get the professional lawsuit to argue with them since it was not written in black and white. But many will stop at that due to time taken and trouble involved in the court. Is it fair there are no clear clauses in the policy that clearly stated that the policy cover natural disaster like earthquake?.

So before travel, make sure you are covered under the catastrophe cover section of your policy

Catastrophe cover is designed to provide cover for additional, irrecoverable travel or accommodation costs if you are forced to move from your pre-paid, pre-booked holiday accommodation (outside of your home country) as a result of unforeseen events such as flood, fire, earthquake, hurricane and medical epidemic. The cover is intended to enable you to continue your holiday in alternative accommodation, or if that’s not possible, return to the UK. Check your travel insurance policy before you travel for full details.

There is provision to curtail your journey and return to your home country

1. Please contact your travel agent, airline or tour company in the first
instance as they may be able to alter your travel arrangements at no
additional cost.
2. Claim any actual and reasonable additional costs incurred by you where they are not recoverable by any other source.
3. submit all receipts for any additional expenses for consideration. If you are claiming for curtailment or additional expenses, you will need to submit all documents showing your original planned pre-paid arrangements, as well as receipts and documents showing your changed itineraries. You will also need to submit
documentation from your travel agent or airline stating what they were able to offer you by way of compensation and refunds; we will only cover additional expenses irrecoverable from any other source.
4. All claims will be subject to the relevant policy excess

If you are currently traveling:

1. Your policy includes cover for overseas emergency medical expenses.
2. Your policy also includes cover for additional accommodation and travel expenses if transport services have been cancelled, delayed or rescheduled as a result of the earthquake, or if your usual place of residence in the affected country has been rendered uninhabitable by the earthquake.

What next steps should you take?

* You should take all reasonable steps to minimise your expenses and this includes rearranging your journey where possible.
* Please submit your travel insurance claim .The insurance company will assess your claim under the terms and conditions of your travel insurance policy. If you have a Cancellation Only policy, your policy does not include cover for additional expenses or overseas medical expenses. If you have a Budget policy, please refer to your Policy Wording / Product Disclosure Statement for the precise benefits covered.
* You will need to submit all receipts for any additional expenses. If you are claiming cancellation or additional expenses, you will need to submit all documents showing your original planned pre-paid arrangements, as well as receipts and documents showing your new arrangements.

Travel insurance and radiation

With some of Japan’s nuclear reactors emitting radiation after damage from devastating earthquake and tsunami, travelers may wonder: Will their travel insurance policy cover them if they cancel trips because of radiation contamination in the region?

Insurers are already grappling with this question, with different outcomes. But agreed on one point: Unless you had added a so-called cancel-for-any-reason rider to your policy, you won’t be reimbursed for your trip deposits and other costs if you cancel your Japan trip solely because you worry that you might encounter radiation—or any other problem, for that matter.

if your plan doesn’t have the ‘cancel for any reason’ coverage. Fear of radiation is not a valid claim.‘Cancel for any reason’ coverage, however lets travelers cancel their insured travel plans for any reason – including fears over radiation poisoning.This coverage provides up to 100% of your total trip costs if you have to cancel your trip for any reason not listed in the standard coverage.

If the travel insurance policy issued by insurance companies still did not cover the risk of Acts of God event, will the travelers stop taking travel insurance, as travel medical insurance and other normal travel coverage are covered by their credit card insurance package if they use credit card to pay for their holiday.

Is that necessary to take up travel insurance? or should consumer boycott the insurance companies without coverage of Acts of God events.... the authority need to ponder over the issue to protect global travelers.

So be very careful when you travel; earthquake and natural disaster is frequent now; radiation risk is now a reality, an actual risk for travelers. It is wise to take up a travel insurance when you travel out of your home country; it is smarter to look at your travel policy to ensure that the terms and conditions meet your needs.
Travel without travel insurance is high risk; buying insurance policy without knowing your risk coverage is wasting your premium......but now.....

Whether you buy the travel insurance or not; the risk is still with you; you may not be protected when disaster strike.....

So buy or not? or take your own risk......

Recommended articles/websites
1.Medical Insurance, http://travel.state.gov/travel/cis_pa_tw/cis/cis_1470.html
2. ‘Cancel for any reason’ Coverage, http://www.travelinsurancereview.net/travel-insurance-coverage/cancel-for-any-reason-coverage/
3. http://www.financial-ombudsman.org.uk/publications/ombudsman-news/1/travel-insurance-case-studies.htm
4. Example of a proactive insurance company announcement, http://www.directtravelinsurance.co.nz/i/page_images/TID_NZ_Japan_Earthquake_&_Tsunami_28_Mar_2011.pdf

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