For many, travel insurance has always been a grudge purchase, associated with high costs and low value. But since COVID-19 started playing havoc with every aspect of travel, from planning to accommodation and every health requirement in between, travel insurance is fast becoming as essential to travel as a passport or visa. Or is it? Joining Ingrid von Stein to unpack this complex issue of travel insurance is Uriah Jansen, Head of Travel Insurance at Hollard Insure.
What does the travel industry look like right now and how it’s changed since COVID-19
The industry has changed to the extent where travel insurance and travel advice becomes an essential. Gone are the days of book online and go. There is so much to know. What travel used to be: something predictable you could plan for. Now: COVID-19 has changed travel forever. I don’t think there’s going to be a hassle free travel anymore. Constantly changing travel restrictions ( literally overnight). Every country has different requirements. Who is accepting which vaccines? Quarantines? Tests? COVID-19 also impacted where South Africans travel to.In the past, Mauritius was one of our top destinations. Then Maldives became our top destination because that was one of the few places Maldives and Zanzibar that allowed South Africans to travel.
There is so much unpredictability that you really need expert advice in terms of booking travel but also in terms of travel insurance.
What is the main issue impacting South Africans wanting to travel overseas right now?
The main issue is that each country has their own rules, whether it’s around vaccinations or testing. In most cases when you come back to South Africa you have to retest. So for example, if you’re to a remote little island in the Maldives, the first thing you need to find out is where are they going to retest you before you come back and if that gets done by the hotel. In the old days I think people were booking their own travel because it’s not difficult to book flights and accommodation online. But now you actually need guidance and you need the right advice just to get off the ground.
Travel insurance now…. what does it cover?
In essence, travel insurance protects you against a financial loss, either before your trip or during your trip. By nature, travel insurance is complex as it covers medical, baggage curtailment, delay, cover liability and personal insurance. And now with COVID-19, it’s even more complicated.
How has travel insurance changed since COVID-19?
Pre-COVID-19 travel insurance was pretty standard across the market and then COVID hit and Hollard realized that their product had to evolve very quickly. Hollard were the first insurer in South Africa which in March 2020 to redesign our product to include COVID- specific cover and are still reviewing the product every few months to make sure they are meeting the requirements, as and when things change.
With COVID-19 the emphasis shifted to before the trip, which is typically your cancellation cover. A country might suddenly close borders or restrict entry to certain travelers or a travelers could test positive two days before they leave.
There are so many more variables BEFORE you even step on the plane. If you test positive, we are one of the few providers in the market that will actually pay your cancellation fees if you test positive, even if you’ve got no symptoms and have to cancel your trip. Most airlines and accommodation providers have softened their rules, but it doesn’t mean there’s no cancellation fees, so you still face a financial loss if you can’t travel and don’t have travel insurance. And what happens when you’re about to return from your trip and you test positive and need to extend your stay? Or find a quarantine facility? Typically any free cover or medical aid is not going to pay for quarantine accommodation, which is why you need travel insurance to assist and pay for this unforeseen, but very likely, emergency.
What do you need to understand about travel quarantine?
That travel quarantine does not mean you are extending your holiday. You actually have to go to an approved quarantine facility and we have to have confirmation that you are being quarantined. Sometimes this could be offered in a section of the hotel you are staying at. But it is still quarantine. You cannot go sightseeing and drive around. It is NOT an extended holiday.
In the past, a lot of people might have relied on the free travel insurance they get with their bank or even the international cover offered by their medical aid, but there may be some shortfalls in terms of quarantine, beyond that, are these options sufficient to cover COVID-19 medical costs? What do people need to consider?
The main purpose of travel insurance in terms of the medical is to stabilize and repatriate. In other words, to make sure that wherever you are in the world you get access to lifesaving treatment, in case of serious illness or serious injury, and that once you are stabilized, we bring you back to South Africa.
Even before COVID-19, medical cover is by far your largest exposure in terms of financial costs and losses. For instance if you have an accident and end up in ICU in America, that will cost you R100 000 a day. Does your free travel insurance cover that? No.
Will your medical aid cover that? Probably not. Some medical aids tier the costs to local prices. So whatever a local ICU costs in South Africa is what you get, which can be a fraction of the real cost. Apart from that, you need expertise.
You might be traveling to a country where medical facilities are not on a par with South Africa, for example. So who’s gonna monitor that treatment?
Also you have to remember that within the definition of travel, medical aid is limited to medical services. If you pass away what happens to your body? That’s not part of the medical service anymore. They will not repatriate your body back to South Africa. And if you are traveling with your husband or your wife and you get ill, they will bring you back to South Africa but not your husband or family. So you need to understand the exclusions and limitations.
What are the key questions people should be asking their broker about the medical cover?
What does it cover and how much does it cover. So what are the exclusions and how much are you covered in terms of ICU, procedures, etc?
Everyone is price sensitive right now – tips to make sure that you get the most value out of their travel insurance?
The best advice is to always ask about exclusions, understand limitations and read the terms and conditions. Hollard have actually changed their terms and conditions to a more plain language layout to make it easier for clients, because they know how important it is for people to understand all the details.
Secondly, you need to know what is and what isn’t covered, especially when it comes to medical COVID cover because this is so new in the market and each insurer will apply different terms and conditions. Hollard follow medical guidance that’s issued by the CDC, the UM or even the South African Disease Control Center, and are constantly reviewing their COVID cover every few months to stay on top of the game.
Getting vaccinated is probably the best way to get the most value out of your travel insurance. Fully vaccinated travelers are a lower risk. Most countries require that you are fully vaccinated, but some don’t. If you’re not fully vaccinated, you need to find out what the exclusions are around this.
The top tip for people who might be hesitant to book their flights because they fear a new wave of COVID or just feel uncomfortable booking is to take out the “cancel for any reason” benefit, which allows you to cancel, for any reason, up to 2 days before departure.