The Outbound Travel Alert (OTA) System has come into effect for nearly a year. The travel warnings not only came as a caution to people about their personal safety when travelling overseas but also a reminder for taking out travel insurance before heading abroad.
To help travellers getting through the complexities of travel insurance policies, the Consumer Council had looked into 21 travel insurance plans offered by 10 insurers to see what protection will be available to policyholders in case of a travel alert and in problem situations.
With a premium ranging from HK$48 to HK$366 for a trip lasting from 3 to 7 days, the 21 travel insurance plans offer a bundle of protection that cover medical expenses and medical evacuation, disrupted, canceled and delayed trips, as well as lost baggage.
Under the OTA System, the Consumer Council found that all insurance plans surveyed have extended protection to cover losses incurred in relation to travel warnings, with new clauses added under the section of journey cancellation and curtailment.
Insured travellers are now entitled to reimbursement of costs between HK$5,000 to HK$50,000 for irrecoverable deposits and charges paid for air tickets, tour packages or other travel arrangements when they are forced to cancel or terminate the journey under the Black Alert. However, the policy entitlement only arises if the policy is purchased before the warning is issued; or if the warning is issued within a week prior to departure or during the trip - depending on the policies.
Meanwhile, eight policies also provide cash allowances ranging from HK$300 to HK$2000 to pay for any unexpected cost like lodging and transportation costs when the trip is curtailed or unavoidably delayed due to a Red or Black Alert.
More than half (13 plans) of the insurance plans allow the insured to cancel the policy and obtain full refund of the premium when a travel warning is issued provided that no claim has been made, with 4 of them restricting the protection to circumstances where a Red or Black Alert has been issued.
For those who want to keep the policy on hold in face of a Red or Black Alert until they embark on the journey later, some policies have provisions in place to defer the effective date of the policy for a period ranging from a maximum of 30 days to 12 months.
Consumers are advised to pay close attention to whether the plans they purchase provide adequate cover to meet all unforeseeable circumstances. All insurance plans studied cover medical expenses and medical evacuation as part of the policies.
Consumers' protection range from HK$250,000 to HK$1,200,000 for costs incurred for medical treatment outside Hong Kong, as well as follow-up medical treatment within 90 days to 6 months after returning to the territory.
On medical evacuation, the plans provide coverage up to the maximum of HK$600,000 to HK$2,000,000, with some payable on reimbursement basis and some others placing no caps on the protection.
In case of a personal accident resulting in the death or permanent total disablement of the insured, the maximum payout ranged from HK$250,000 to HK$2,000,000.
Some plans offer compensation 1.5 times or double that of the claimed amount if accident occurs to the insured when riding on public transportation causing death or injury, with some plans extending the protection to cover passage in a private car or conveyance arranged by the travel agent.
Consumers are advised, however, to take note of the time restriction attached as the plans generally insure only against death or permanent total disablement occurring within 90 days to 12 months after the date of the accident causing injury.
While consumers should choose a policy in accordance with their own priorities and considerations, it is important for them to find out the limitations of various policies. For example, age limits are generally imposed on claims for medical expenses and personal accident where minors or elderly people of a certain age are only entitled to designated percentage / amount of the listed maximum protection.
Besides, most policies exclude coverage for expenses incurred in relation to riots, terrorist or duties performed by law enforcing agencies, non-essential treatment and others.
- Some advice for consumers in the September issue of CHOICE magazine on taking out travel insurance before a holiday:
- Shop around for an insurance plan with the appropriate extended cover under the OTA System that meets your specific needs;
- Make sure you have adequate coverage for medical evacuation and medical expenses as the costs of medical evacuation could be extremely pricey;
- Examine whether the insurance plan covers high-risk activities like scuba-diving or skiing that you plan to participate;
- Excess is payable for some items under certain plans. Assess if the excess matters to you;
- Bring along a copy of the insurance policy and a list of emergency contacts when travelling abroad.
The Consumer Council reserves all its right (including copyright) in respect of CHOICE Magazine and Online CHOICE ( https://echoice.consumer.org.hk/ ).