The views expressed in this article are not necessarily those of the FIA. The article below was supplied by the 2018 FIA partner, Hollard.
Many of us (perhaps even the majority) love travelling abroad; it’s an adventure, after all, seeing exotic places and experiencing exciting new activities.
We spend tens of thousands for the privilege. And that’s OK, because travelling is a special thing that we dream about, that we save up for and plan long in advance.
So why do many of us not bother to spend just a few hundred rands more on travel insurance?
Perhaps it’s the excitement around an overseas trip that overrides potential concerns. Perhaps we rationalise that we’re not going to do anything risky, or that plenty of our friends have made it there and back unscathed. Or that we’ve never had a problem before. Perhaps we pointedly don’t want to believe something bad can happen.
But the bottom line is that all kinds of crazy things can happen while on holiday, some spectacular and others so prosaic that they’re embarrassing (like tripping over a host’s sleeping dog, for example). And they can end up costing millions.
As a broker or financial adviser, you’re in a perfect position to be the voice of reason for your clients before they undertake that dream holiday. Let’s look at a few things that can trip them up just as unexpectedly as that slumbering pet.
First up, travel disruptions. What if, for example, your client booked a holiday last year for the end of this year – but now they can’t actually go any more. Maybe they’ve been retrenched, or their leave was cancelled, or their partner has taken ill.
Or even worse, everything’s going swimmingly until a hurricane wrecks the resort they’re going to, or a volcanic eruption forces flight cancellations. None of this is their fault – but they’ve paid for an expensive holiday that’s not going to happen. If they don’t have cancellation cover, what then?
Let’s say they’ve made it safely to their destination and everything’s good – until they get back to a ransacked hotel room. They’re still on holiday, to be sure, but now seriously out of pocket and probably unlikely to get their things back. (The same applies to baggage theft. Our airports have been notorious for this, but this isn’t a particularly South African crime. As soon as one’s baggage is out of sight anywhere, there’s the possibility that it can be targeted.)
And then there’s the biggie: medical costs. Those of us who can afford overseas holidays generally also have medical insurance – but that’s something one can’t always count on from halfway around the world. Medical aids might cough up for a hospital stay, but frequently they won’t for the really expensive stuff, such as the cost of your accompanying travel companion or repatriation.
Medical emergencies can occur at any time. They include the accidental; those falling-over-a-pet or down-stairs sorts of injuries, the slipping-in-snow or rolling-cruise-ship kinds, the selfie mishap or vehicle accidents. Resort hire scooters may be charming and great for getting around – until you come off one.
And, of course, physical adventures can cause serious injury. Fun new activities, such as scuba diving, bungee jumping, or elephant or camel riding, inevitably carry inherent risks. Theme park rides might seem relatively benign, too, but even some of them are classed as dangerous sports.
Then there’s the health-related medical emergency. Some pre-existing medical conditions are covered by travel insurance, but travel can also bring latent conditions to the fore: anxiety attacks, thrombosis, claustrophobia or hypertension, for example.
Another thing many people don’t consider is that following a medical emergency, particularly in the case of seniors but also others, it may not be possible to immediately obtain a fit-to-fly certificate. The resulting delay can lump a hefty additional cost onto a holiday.
But medical repatriation is often by far the costliest component of a medical emergency; in Africa alone, you’re looking at an average cost of R1-million. Think about it: it’s a combination of nine full-price economy seats in an aircraft, permits, medical personnel (routinely, a doctor and a nurse) and their accommodation, before they return home. Loved ones likely have to be flown home, too.
It’s abundantly clear that travel insurance, an investment representing a tiny fraction of a holiday’s cost, can avert a lifetime of financial pain. So it’s prudent for you to insist that your clients buy such cover, even if they don’t have to (many countries now require medical insurance before they will issue a visa).
Equally prudent is ensuring that your clients know what they’re covered for, and what the policy stipulations are. That they’re covered for unexpected travel disruptions or cancellations. That they’ve declared pre-existing medical conditions. That they know which extreme activities are excluded from their cover.
Then they can go and have the time of their lives! And you can have peace of mind, knowing that they have it, too.