5 things I learnt about buying travel insurance because of the global Covid-19 situation

Travel insurance has always been one of those annoying additional fees that we have to pay extra for during our holidays. We pay extra for something which doesn't go towards giving us a better holiday.

However, most of us would still reluctantly pay for it rather than risk incurring a huge financial burden should anything happen while we are overseas.

Unfortunate incidents can range from common travel inconveniences such as losing a suitcase or having a flight delayed to major ones such as getting into an accident while overseas, which may require immediate hospitalisation or medical evacuation.

A travel insurance plan helps protect us financially against the costs of these risks.

The Covid-19 virus has become a major global issue since the start of the year.

It has also disrupted the plans of both leisure and business travellers, with many flights and travel plans to affected countries cancelled or put on hold indefinitely.

More attention this year has also been put on travel insurance, with some travellers complaining that they are unsure if they will be compensated by either insurers or airlines should they be unable to proceed ahead with their travel plans.

Having just arrived back from a holiday, and also having an upcoming one later this year (which was booked last year), I have naturally been doing a lot of research on travel insurance to better understand what I may or may not be protected for.

Here are 5 things I learnt about buying travel insurance during this period.

#1 BUY YOUR TRAVEL INSURANCE PLAN EARLY

Often, travel insurance is one of the last things we think about when planning for our holidays.

Most of us would rather spend our time searching for good flight deals, researching where to stay and even which credit cards we should use to pay for our bookings to earn the most miles or cashback.

But similar to all other types of insurance, it's always best to buy your travel insurance early, when you don't think you need it. This is because you never know what may crop up in the future to ruin your holiday.

For example, if you booked a holiday to South Korea in March 2020 back in October 2019, you should have also bought your travel insurance back then as soon as your flights and accommodations were confirmed.

Buying your travel insurance plan only after travel restrictions were issued is pointless because very often, policies that are bought only after the Covid-19 virus has become a known-global health risk would be excluded for coverage.

It's like buying a critical illness plan to cover yourself for a stroke after you already have it. You won't be covered.

#2 BUY YOUR OWN TRAVEL INSURANCE 

Many of us travel in a group that may include family members and friends. The Covid-19 virus serves as a good reminder that if we wish to be adequately insured, every member of our travel party (including little ones) need to have their own insurance policy.

One of the fears I had while we were travelling in February was that some of us may miss our flights if we had to be quarantined, or that flights could be cancelled entirely if the situation worsen. In such a situation, every individual should claim on their own respective travel insurance plan.

#3 YOU DON'T ALWAYS NEED TO BUY THE SAME TRAVEL INSURANCE FOR EVERYONE IN YOUR GROUP

While you want everyone within your travel party to have their insurance plan, it's not necessary for everyone to buy their travel insurance from the same insurer.

If you are the one who is making most of the bookings for your travel group and paying for it, you need to cover yourself adequately if you are not able to go for the trip and have to make cancellations.

For example, if you have booked a non-refundable 3-bedroom apartment under your name, and you and your travel party are unable to travel because of Covid-19, or any other legitimate reasons, it's you who will need to make the claim on your own travel insurance policy.

So, if you are not adequately insured for the bookings that you have made, you may suffer a financial loss if the trip has to be cancelled.

Similarly, the rest of your travel party do not necessarily need to buy the same level of coverage that you have bought.

Instead, they should ensure that the cost they incur for the trip, which can be legally attributed to them, is well covered by their travel insurance plan in the event that the trip is cancelled.

Of course, individuals should also ensure that they are adequately insured for any potential mishap overseas which happens to them. For example, getting sick, injured or robbed.

So unless you are buying group insurance together, you should focus on buying what you need, and not what your group needs.

#4 REALLY UNDERSTAND WHAT YOU ARE PAYING FOR

While researching on the best travel insurance plan to buy during the Covid-19 virus outbreak, one of the things I realised is that while the cheapest travel insurance plan is never the best (obviously), neither is the most expensive plan always the best.

For my trip to Australia, what I cared about most (besides medical coverage and whether I would be covered for Covid-19 related matter issues) was the rental car excess claim and natural disaster coverage.

A high claim amount for the car rental excess would give me more financial protection if the rental car was damaged.

I didn't need a travel insurance plan that gave me unnecessary protection such as sports equipment, golfing equipment or pregnancy-related coverage.

Remember, price is what you pay; value is what you get. Choose value, and not price, when it comes to buying a travel insurance policy.

#5 AN ANNUAL TRAVEL PLAN STARTS MAKING SENSE DURING THIS PERIOD

Covid-19 made me realised the value of an annual travel insurance plan.

An annual travel insurance plan automatically protects you for any travel-related inconvenience the second you make your travel booking.

As long as you do not deliberately book a flight to a destination with a known risk at the point of time that you book your trip (e.g. booking a flight today to China), your annual travel insurance plan will automatically cover the trip from the time you book it, till the time the trip is completed.

For the latest updates on the coronavirus, visit here.

This article was first published in Dollar and Sense.