Many people are familiar with the concept of insurance but only a few are aware of the extent of risks that insurance packages can cover. The popular types of insurance are health insurance, automobile insurance, home insurance, property insurance, and life assurance. But do you know that insurance could cover anything under the sun? This is the case, as long as it involves liabilities or a measure of risk. An example of this is travel insurance.
Travel insurance is a type of insurance that covers the costs and losses associated with travelling. This includes flight cancellations, lost luggage and the cost of medical care if you get sick or have an accident. Many people who take trips regularly – especially trips abroad – can admit that they have been in such situations. The global travel insurance market exhibited a growth rate of 3.9% between 2018-2022 and is projected to reach a market valuation of US$ 48.2 billion in 2023. The market is predicted to expand rapidly at a CAGR of 7.2%.
Still, it is safe to say that many people do not leverage the advantages that travel insurance can offer. Not many insurance companies underwrite such plans too. As of 2021, the National Insurance Commission (NAICOM) has 58 registered insurance companies (Nigeria). From our findings, less than 20 of these companies provide travel insurance. Either that, or they have little to no information on their travel insurance policy. Is there any point to having travel insurance?
Benefits of travel insurance:
- Travel insurance can provide coverage for trip cancellation or interruption caused by unexpected events, such as illness, injury, or a natural disaster. This coverage can compensate for expenses that are non-refundable, such as hotel reservations and airfare.
- Travel insurance can cover medical expenses for accidents or illnesses that occur during your trip, including emergency medical evacuation and repatriation of mortal remains.
- Travel insurance can provide coverage for personal liability if you cause damage to property or injure someone while on your trip.
- Travel insurance can cover the cost of lost or delayed baggage, additional accommodation and meal expenses due to delayed or cancelled flights etc.
Of course, this can only be beneficial if you select the right travel insurance plan. It is best to compare several plans from different trusted companies to see which one works for you. Verify what this plan would cover. Generally, the more things the insurance policy covers, the higher the premium paid. Such comprehensive cover may possibly end up being unneeded. Also, confirm what such plans do not cover.
Some of the common exclusions are:
- Travelling with an undeclared pre-existing medical condition.
- Self-induced harm or illness due to reckless activity such as careless driving, use of alcohol and drugs.
- Changing your mind about travelling without having an unavoidable emergency or leaving your belongings unattended.
- Finally and unsurprisingly, terrorism and acts of war. The risks that such situations carry are unquantifiable.
For as low as $150, you can get travel insurance for up to 365 days which will cover basic risks. This is very helpful if you are a frequent traveller. Always remember to do your research and go for the policy that rightly fits your needs and protects you adequately. Do not skip the terms and conditions. If possible, speak to a legal practitioner to know if there are loopholes that the company can exploit. Once that is resolved, you can focus your attention on unwinding and enjoying your trip!