Confusion and Uncertainty Reigns in Travel Insurance on High-RiskActivities - CHOICE # 441

Shopping for an adequate travel insurance plan to cover your favourite high-risk activities is crucial but it could be just as risky and baffling a business too.

For it may turn out that when an accident or unexpected event happens, the activities you engage in are not covered by your travel insurance.

A Consumer Council survey on the market has shown a general lack of clear comprehensive information and transparency, creating confusion and uncertainty to the consumers in search of travel insurance on high-risk activities.

For instance, the coverage on high-risk activities highlighted in the promotional pamphlets is lacking in most of the insurance policies. Further, the terms and conditions of the policies are often couched in language that is vague and abstruse relying heavily on the interpretation and explanation of individual insurers.

The survey was prompted by the public concerns in the wake of the recent disaster in Egypt involving hot-air balloon. In the survey, the Council collected information, including scrutiny of the pamphlets and insurance policies, from 20 insurance companies on 46 travel insurance plans.

Nearly all (about 90%) of the pamphlets indicated that their travel insurance plans included coverage of high-risk activities. Most commonly cited examples were: scuba diving, bungee jumping, skiing, rafting and parachuting.

But when it came to the insurance policy, upon which actual coverage of the insured depends, a rather different picture emerged: only 3 of the policies contained reference of insurance coverage for high-risk activities.

Of the three policies, two specifically listed out a number of amateur high-risk sports which are covered (with limitations) under the sections of Medical Expenses and Personal Accidents.

The other one merely specified the maximum claim amount under its Medical and Other Expenses and Personal Accidents if the bodily injury or death of the insured is caused by engaging in winter sports and underwater activities.

Out of the 46 travel insurance plans covered by the survey, only 5 could be found to specify hot-air balloon ride as a high-risk activity under cover - 2 in both the pamphlets and the policies, and 3 in the pamphlets only.

As most travel insurance policies did not specifically mention if hot-air balloon ride would be covered or excluded in the plans surveyed, Council staff members posing as prospective customers made enquiries to some of the customer service hotlines for clarification.

The replies gathered were a mix of both negative and affirmative (the latter subject to limitations some of which were not specified in the policies).

Subsequent enquiries were also made to the insurance companies to ascertain whether high-risk activities that were not specified in the pamphlets or policies would be covered under the travel insurance plans.

The response was less than entirely reassuring. In their response to the Council, many insurers affirmed that some of the high-risk activities would be covered though not said so in the pamphlets or policies.

The insurers explained that due to the limited space of the pamphlets, it was not possible to publish an exhaustive list of high-risk activities from around the world, and so only a summary of benefits and examples was provided for general information.

Some, however, claimed that so long as the high-risk activities concerned were not listed under the General Exclusions of the policies such activities would be deemed covered in the policies.

The Council is of the view that the terms and conditions regarding the coverage and exclusion of high-risk activities should be clearly spelled out in the policy together with the definition of the nature of activities that would be covered, and examples of common high-risk activities.

To protect their interests, consumers are advised to heed the following:

- Obtain the detailed itinerary from travel agents. Ask if any high-risk activities would be arranged during the trip and obtain relevant information (whether the activities are operated by licensed operators) from the agents.

- Never buy in haste; do not merely consider the amount of premium but compare the terms and benefits of different travel insurance plans that most suit your journey and specific needs.

- Before agreeing to purchase, get a copy of the insurance policy from the insurer and take the opportunity to seek explanation and clarification, if needed, of the insurer or its agents on the terms and conditions of the policy in detail and, specifically, the high-risk activities you want insurance coverage.