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TAKE NOTE: The three fundamental errors made when concluding travel insurance

[Jonatan Jõks | 15.11]

Each year, people who are heading abroad on holiday conclude insurance contracts, yet, due to a failure to examine the terms and conditions, they may instead find themselves without compensation.

Travel insurance usually means health insurance, which compensates people for unexpected health costs arising from an illness or accident. In addition, baggage and travel interruption insurance can be purchased, if so desired. To help you enjoy your holiday with a clear conscience, Jonatan Jõks, Product Manager at Seesam, has ranked the most common mistakes that people make when concluding travel insurance.

Failure to look closely at the insurance terms and conditions

Insurance is quite often concluded only formally and without taking the time to look closely at the terms and conditions.

This might lead to a situation where there is no insurance cover or the limit of protection is insufficient to resolve the situation in the event of an accident. If an accident happens during a skiing trip and the injured party doesn’t have additional dangerous hobby coverage, then the helping hand of standard travel insurance will not be enough. Or if the person purchases medical treatment insurance cover, when they actually want to also be covered against trip cancellation due to illness or baggage theft.

The terms and conditions of the contract should definitely be read, to make sure that you are up to speed with the events that constitute an insured event and what is subject to compensation. If something is unclear, then it pays to request clarification from the insurance salesperson.

The nature of the trip and the sum insured do not match

Medical treatment expenses can vary significantly around the world, a fact that must be taken into consideration when deciding on the sum insured. For example, when leaving Europe, the amount of coverage which you had when you travelled to Sweden last year will not suffice. In order to travel safely in the United States and Australia, you should select an insured sum of EUR 200,000.

When selecting the insured sum for trip cancellation the initial travel costs should be added together and thought should also be given to the cost of purchasing new tickets if the trip is interrupted or tickets for another flight are needed.

Many travellers also underestimate the value of the items that they are carrying with them. Three hundred euros per traveller is low if the traveller also has a newer mobile telephone or camera with them.

It pays to select the sum insured with a reserve, since only then you can be sure that you are 100% ready for the unexpected.

The contract should be concluded as soon as possible

The most common mistake is that people delay in purchasing travel insurance. This mistake is also frequently made by employees of insurance companies. Actually, insurance should be concluded immediately after purchasing the trip or why not even before. Prices are not getting any cheaper, and the sooner a contract is concluded the greater the value the client actually receives, since the cover is valid for a longer period of time. A good example is the recent incident with the volcano in Bali. People who purchased insurance cover when they made the reservation for their trip and added natural disaster risk didn’t have to worry about possible changes to or the cancellation of their trip because of the volcanic eruption. On the other hand, those people who waited until the volcano became active to conclude a contract were unable to conclude a suitable contract, since the risk was already different by that time. The same principle also applies to illness.