A delayed or cancelled trip not only brings anxiety about missing important transfers or a part of your holiday itinerary, but it can also cost you hundreds of dollars. As an unlucky traveller found out, even protecting yourself with a travel insurance policy may not guarantee compensation if you experience unwelcome changes to your holiday. To help prevent these travel insurance claim mishaps, we share some important things to look out for in the policy documents of your travel insurance policy before making a purchase.
Not All Trip Delay Coverage is Created Equal
A group of friends all filed for the same flight delay claim when their flight was delayed for over 24 hours due to an operational issue. While most claims were accepted, one claim was denied. So why did this happen?
Barring the fact that not everyone had the same insurer, the insurer who denied the claim had specific requirements for what can be claimed under the travel delay benefit. Unfortunately for the unlucky traveller in the article linked above, this meant that, while mechanical delays were considered a legitimate reason, operational delays were not claimable.
It is often just as important to see what is included in your travel insurance policy in addition to what isn't. In the previous scenario, the insurer that denied the claim had specific requirements for when a travel delay benefit could be claimed. This included trips delayed due to a major travel event (natural disaster, airport closures, or civil unrest/commotion) or a mechanical breakdown of the carrier.
However, because there was nothing in the policy about operational delays, the claim was not accepted. On the other hand, other insurers like NTUC Income can be much more flexible, only requiring that you are not the cause of the delay and that you submit a letter from the airline outlining why the delay happened (screenshot above). This makes your claim more likely to be accepted.
Considering that some of the most popular Singaporean holiday destinations have airports that experience consistent delays, it may be beneficial to opt for a policy that is lenient with this benefit.
Trip Cancellation Benefits Have Strict Guidelines
Cancelling your trip is one of the costliest travel undertakings, especially if you have non refundable airfare, accommodations and excursions. In the worst case scenario, you can end up losing most of what you sunk into your hard earned vacation. In these situations, most travellers hope that they can claim under the travel cancellation benefit of their policies.
However, this benefit usually comes with some of the strictest conditions. For example, you can only claim the travel cancellation benefit for very significant problems such as a serious illness or injury, death or due to a major political or weather-related event occurring at your destination.
Furthermore, you should see if your excursions and entertainment tickets are covered as some insurers may not cover pre-paid or non-refundable excursion or entertainment tickets (for concerts, tours, etc.) under this benefit.
It is possible to get a policy that will cover travel cancellations for any reason—although you should be prepared to pay a higher premium.
For instance, Aviva's Plus or Prestige travel insurance plans has a "Trip Cancellation for Any Reason" benefit where you will get back 50% of your deposits and unused air travel and accommodation costs if you cancel your trip for a reason not covered under their standard trip cancellation benefit.
However, there are still stipulations attached to this benefit such as when you should have bought the policy and who you need to alert upon cancelling your trip. To this extent, you should always read the conditions of each benefit, especially when they seem very lenient.
Claims for Postponing Your Trip Will Only Work in Emergencies
While booking your trip early can save you on airfare, booking far in advance also comes with its fair share of risks. For instance, you book a trip a couple months in advance and something happens at work that forces you to change your trip dates.
In most cases, changes due to a change in work schedule will not be covered under trip postponement benefits. Instead, similar to trip cancellation benefits, trip postponement benefits will only be payable if you (or your travel companion) suffer a severe illness or injury.
However, even when you do have a reason that falls within the restrictions of the benefit, you will have to prove to your insurer that the event was not foreseeable. For instance, you may not be able to claim for this benefit if you had a surgery coming up around the same time as your trip, you underestimated your recovery time and thus had to postpone your trip.
A Few Ways to Minimise Financial Loss During Your Trip
There are several steps you can take to recoup at least a part of your trip expenses. For instance, you can also talk to your airline's customer service representative in the event your flight is cancelled or delayed. In most cases, they will do your best to put you on the next available flight or give you some form of credit or refund.
Furthermore, they may even offer you perks such as a seat upgrade on your next flight. You can also call your tour operator as soon as possible to let them know if your cancelled or delayed flight led to you missing a non-refundable event such as a tour or excursion. They may lend a sympathetic ear and agree to reschedule your tour for free for the next available time slot.
Hotels and Airbnbs often have a cancellation window of 24-48 hours prior to check-in, after which you may end up paying a fee to cancel. However, Airbnb may not charge you even if you are outside the full refund window, provided you have a legitimate reason for being late or cancelling the booking.
This is explained in their Airbnb Cancellation Policies page which states that cancellation policies "may be superseded by the Guest Refund Policy, extenuating circumstances or cancellations by Airbnb". Hotels may operate similarly, but it helps booking a hotel that has a flexible refund policy.
In the event you can't get a refund at all and you have a legitimate excuse, you can ask if they can offer some form of compensation through a hotel credit.
Don't Forego Travel Insurance Just Because There are Limitations
While going through the claims process is no-doubt frustrating, you should still purchase a travel insurance policy. For one, travel insurance does more than protect you against cancellations and delays— it will also provide medical coverage and emergency assistance.
If necessary, you can always call up the insurer ahead of time to get more information about scenarios that are not explicitly written about in the policy to prevent claim denial surprises. Furthermore, your experiences may differ from everyone else's, especially if you carefully sift through an insurer's policy document to choose one with flexible requirements.
While someone else may have gotten their claim denied, you may get your claim accepted simply by having gone through this step. Let us know below if you had any experiences with travel insurance. Which insurance companies were the easiest to work with? Is there something you wish travel insurance policies covered that they currently don't?
This was first published at Value Penguin's website, "Travel Cancellations, Delays and Postponements: Will Your Insurer Pay Out?".