If you are planning a trip or regularly travel from Hong Kong to global destinations, it is important to make sure that you are protected from unforeseen eventualities. You could lose your bag, phone, or other personal items. There’s also a risk that you could get injured or sick while in a foreign country. More commonly, your trip may be canceled - jeopardizing your plans.
Travel insurance is an often ignored but all the same very important type of coverage that protects you from unexpected expenses and incidents during travel. In exchange for a premium, the insurance company reimburses for expenditure related to loss of personal items, trip cancellation, accidents, and medical treatment. Given that a single trip outside Hong Kong could cost thousands of dollars, it makes a lot of sense to procure this added protection at a small cost. This post offers some tips to help you understand why you may need this type of coverage.
What Does Travel Insurance Cover?
When purchasing trip insurance in Hong Kong, it is important you read through the policy to understand the coverage options and exclusions. Most travel insurance policies will include the following coverage provisions.
→ Trip Cancellation
Unforeseen circumstances could force your trip to be canceled or cut short. For instance, you could become ill or lose a family member. Or the tour operator could go out of business. Travel insurance policies that include trip cancellation will reimburse for prepaid non-refundable costs if your trip is canceled. If you have already taken the trip but are forced to cut it short due to a family member (or travel companion) getting sick or injured during travel, then you may get reimbursed for the unused part of the trip. The specifics will vary from one policy to the other. Some plans include a cancel for any reason add-on that lets you cancel the trip for any reason and still get reimbursed.
→ Medical Emergencies
Medical emergencies could come up at any time and cast your travel itinerary into total disarray. You may also be forced to foot significant medical expenses in a foreign country. Trip insurance that includes travel medical insurance protects you from costs associated with these emergencies. This may include the cost of evacuation to the nearest hospital, some coverage for emergency care, and possibly even the cost of being flown back to Hong Kong. Again, it all depends on the policy provisions and limits included in a specific policy. It is important you get a travel insurance option in Hong Kong that sufficiently meets your needs.
→ Lost Baggage
Statistics from LuggageHero show that about one in every 250 bags will be lost during travel. That’s about a 0.4% chance, which is significant in the broad scale of things. Travel insurance policies that include this option will reimburse you for loss, theft, or damage of luggage during a trip. Some policies may even cover baggage delay, which funds the things you need to buy (e.g. clothing) while you wait for your suitcase to catch up with you.
→ Travel Delay
Travel delays can be a real inconvenience and are quite common. Flights will be delayed for a wide variety of reasons, ranging from air traffic control restrictions to mechanical problems, bird strikes, adverse weather, strikes, and waiting on connecting bags and passengers. You may be forced to incur unplanned restaurant expenses or hotel booking fees. Travel insurance policies that include this protection reimburse for such expenses if the arrival or departure of your scheduled aircraft, train, or sea vessel is delayed for a specific minimum number of hours. The travel delay benefit may include accommodation, transport costs for re-routing after the delay, and replacement tickets to catch up with the travel plan.
→ Personal Accident
This coverage protects you against legal liability due to accidental bodily harm caused to a third party or property belonging to a third party. Personal liability protection can be very important especially if you are involved in an accident or accidentally cause harm to another person or damage property and are held accountable for it. This insurance will cover the liability as well as take care of the associated legal expenses.
Types of Travel Insurance
There are two general types of travel insurance:
- Basic trip cancellation - this is a rudimentary type of travel protection that typically covers lost bags and reimburses for expenses associated with missing a connection or failing to travel due to sickness or injury.
- Comprehensive travel insurance - this is an all-encompassing type of travel insurance that covers trip cancellation, missed connections, medical emergencies, disaster evacuation, and more.
The right type of coverage for you will depend on factors such as the frequency and duration of your travel. Working with a seasoned and experienced Trusted Union can help you figure out what coverage is ideal for your needs.
Exclusions of Trip Insurance
It is important to read between the lines and understand a policy’s exclusion before you commit to purchasing any travel insurance plan. Some common travel insurance exclusions include the following:
- Pre-existing medical conditions are typically not covered by the policy’s benefits. However, some plans may cover pre-existing conditions under special circumstances.
- Incidents related to dangerous activities such as mountain climbing and motor rallying.
- Riot, war, civil commotion, and terrorism-related incidents.
- Injuries that are designated to be ‘self-inflicted’, or related to the use of alcohol or illegal drugs.
- Childbirth, pregnancy, or miscarriage.
Adding certain riders can increase the flexibility of your coverage. For instance, the Cancel For Any Reason (CFAR) add-on allows policyholders to cancel your trip for whatever reason.
When is Travel Insurance not Needed?
There are certain circumstances under which travel insurance coverage may not be worth it:
Traveling from Hong Kong to Beijing? You may just as well skip any extra insurance. These short trips to mainland China are basically less expensive and you probably need just a few weeks or days to plan. Your Hong Kong medical insurance may already cover you within the city and specific hospitals within mainland China. Of course, it is important to read between the lines, but most experts don’t recommend travel insurance for trips this short.
If your card already offers it
Some credit cards will offer certain travel-related benefits, so it is important to check before you purchase standalone trip insurance. You may be reimbursed a substantial amount of your investment (or all of it) if your trip is canceled or cut short due to uncertainties such as severe weather or illness. Check what options or benefits your credit card provider offers when traveling (if any) and whether these apply to overseas destinations.
You may be compelled to purchase trip insurance if your flight costs a lot of money. However, this may not be necessary because most airlines offer you the next available flight to the same destination if your scheduled flight is canceled. If your flight schedule encounters significant delays or is canceled altogether, you may be entitled to some compensation.
When is travel insurance worth it?
Travel insurance is considered to be an important necessity under the following circumstances.
International vacations happen to be much more expensive and may take much longer than your domestic trip within Hong Kong or nearby in mainland China. You may need to stay for a couple of weeks and sometimes even a month. This needs advance planning and you may need to pay for your trip in advance (at least partially). Travel insurance is important to have during a trip of this nature.
Medical help can be hard to come by when traveling to those exotic destinations. Even if readily available, it could be expensive and not something you anticipated. Having comprehensive travel insurance in place alleviates these concerns and secures your peace of mind. This type of coverage can come in handy and provide the financial cushioning you need.
Going on a cruise? Then you need travel insurance. You may choose between outside companies here in Hong Kong or the travel insurance option offered by the cruise line. It is important to go through the terms and conditions and ensure that you get comprehensive coverage either way. You need to protect your investment and make sure that you are not exposed if anything goes wrong.
Where Can You Buy Travel Insurance
Depending on the circumstances, you have several options for purchasing travel insurance coverage:
- Travel agent - booking a trip through a travel agent? Then you might be able to purchase travel insurance through them.
- Cruise liner - cruise liners often offer insurance coverage options that you can conveniently purchase during the booking process.
- HK insurance provider - working with a Hong Kong insurance provider can be beneficial in many ways. You’ll be able to compare options and find a plan that gives you adequate coverage throughout the year (or through your trip).
What Geographical Coverage Options are Available?
Hong Kong trip insurance providers typically offer two coverage options (as far as geographical reach is concerned).
- Asia - this level of coverage protects you during trips within the Asian continent.
- Worldwide - more comprehensive travel insurance plans will cover trips to any global destination.
Will Trip Insurance Cover Covid-19 Related Events?
COVID-19 is a foreseen or known event, and most travel insurance plans in Hong Kong will not cover these claims. Existing policies may provide medical coverage for policyholders who get sick with COVID-19. Make sure to clearly define your expectations and understand what the insurance policy you are considering offers before you confirm the purchase.