Wednesday, April 14, 2010

Roam the world

Rav Dhaliwal
The Straits Times

PLANNING to go on holiday? Here's a tip: Protect yourself with travel insurance - and get it early. In fact, get it as soon as you book your holiday, because you get coverage 30 days ahead of travel.

This advice comes from the National Association of Travel Agents, Singapore (Natas), which is out to raise awareness of the importance of travel insurance.

It is a two-pronged drive, said Natas chief executive Robert Khoo. It is reaching out to consumers, and also asking its member travel agents to suggest to customers that they buy travel insurance.

For a five-day trip to China, Japan, South Korea or Australia costing $700 to $2,000, the insurance premium at TravelJoy Insurance would be $34 or $48, depending on whether you opt for an elite plan with more coverage or a deluxe plan.

TravelJoy, launched in July 2004, is endorsed and marketed by Natas and underwritten by Tenet Insurance. For a very small sum of money that you pay upfront, you can travel with peace of mind, knowing you are covered in case you lose your baggage or fall ill while overseas, said Mr Khoo.

The severe acute respiratory syndrome (Sars), bird flu, terrorism and natural disasters such as the recent tsunami disaster are also covered.

If you have to cancel your holiday due to unforeseen circumstances - for example, illness hits you or a family member - you are paid the non-refundable deposit or full tour price paid to the travel agency.

Travel insurance usually costs about 5 per cent of the tour price. For a one- to three-day trip, the insurance premium could be as low as $20. Travel premium amounts are determined by the region you are travelling to and the duration of the trip.

Mr John Low, Natas' manager for IT and product development, said that TravelJoy has an additional component not provided by other insurers. For instance, should the travel agency that you bought your tour from shut down, you will get your money back, provided it was one of the 320 Natas member agencies.

Mr Khoo said that a survey conducted at the Natas Travel Fair in October 2003 showed that only 30 per cent of travellers buy travel insurance.

We were keen to develop travel insurance that included a travel-agency-collapse component. After many unsuccessful attempts to get existing players to include this component, we decided to do it ourselves.

Tenet Insurance was interested in working with us.

We believe that since setting up TravelJoy, other players have been very pro-active in pushing travel insurance. I feel that the proportion of travellers who buy travel insurance should now be about 50 per cent.'

He believes that figure should reach 70 per cent in the next two to three years. A survey on this will be conducted at the Natas Travel Fair to be held at Suntec Singapore Exhibition Hall from tomorrow to Sunday.

Mr Adam Tang, Tenet's senior vice-president/general manager, operations, said that insurance claims commonly made by travellers include loss of baggage, medical claims and accidents.

He urged travellers to verify the extent of travel insurance coverage provided by their credit cards. Some credit card companies claim they provide coverage of up to $1 million. However, that may be the total liability covering all the victims in an accident. Also, the coverage may be limited and not cover all 21 items that TravelJoy, for example, provides, he said.

Over the past three years, Singaporeans have increasingly realised the importance of leaving home with adequate coverage.

Mr Eugene Lim, manager, Travel Unit (channel distribution), at the American Home Assurance Company, Singapore branch, a member of American International Group (AIG), said this is partly due to terrorism, natural disasters and Sars, coupled with increased awareness of high overseas medical costs.

A person hospitalised in the United States can incur medical costs that could run into hundreds of thousands of dollars. Evacuation costs due to medical reasons can be high as well.

Recently, a person was evacuated back to Singapore at a cost of about US$72,000 (S$117,000) because we had to use an air ambulance. You can imagine the financial burden if these expenses are borne by an individual.'


A comprehensive travel insurance policy should cover:

Pre-travel period
  • Coverage from the time you book your travel;
  • Refund in case travel agency collapses; and
  • Refund in case of cancellation due to illness or natural disasters
During the trip
  • Coverage from the moment you leave home (including journey to the airport)
  • Coverage of all major contingencies including illness, accidents/mishaps, loss of baggage, terrorism, Sars, bird flu, natural disasters; and
  • Unlimited medical evacuation and repatriation costs

Post-travel period
  • Coverage of follow-up medical treatment in Singapore over a 31-day period (if illness or injury occurred during trip

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