The COVID-19 pandemic; a good or a bad case for travel insurance?
‘When you take little things for granted, don’t be surprised when bigger ones swallow you up’ – Author
It is a truism that many people are convinced that air travel remains the fastest means of travelling to any destination across the world.
Travelling by air plane especially for the first time is such a life-threatening experience for many people, as it is often filled with fear, and some appreciable degree of anxiety. The taking-off of an air plane itself stirs up some inexplicable ‘chemicals’ in one’s inner being!
The journey through the clouds with its accompanying occasional turbulence, and the eventual announcement of ‘…please fasten your seat belts…’ as the plane prepares to touch down, is one that could ignite the ‘fear of the unknown.’
While the cruising itself is typically covered by Aviation Insurance, the other associated risks such as illnesses, loss of life and / or luggage among several others (which are not occasioned by an accident to the aircraft) are covered by a specialized form of insurance known as Travel Insurance.
It does appear that these fears are being further aggravated by one tiny virus that has shaken the very foundation of the world – the COVID-19 pandemic!
Restricted international movements and Travel Insurance
Since the COVID-19 pandemic broke out and went so viral in early 2020, the world and movement across it have been stalled significantly. No one was going anywhere and no country wanted any other national to enter their country knowing the possible risk factors.
This continued till the air space was eased a bit towards the end of year 2020. The world still seems to be dragging its feet as to whether to move or not and to which extent.
The unmatched and unforeseen effect on lives, businesses, jobs among others need no over-emphasis.
Air travel, tourism and other ancillary services have become a pale shadow of themselves. The ravaging effects of the virus has become more conspicuous than ever as different variants and predictable waves keep rearing their ugly heads in spite of available vaccines.
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Has the pandemic made a good case for Travel Insurance?
From the eyes of my mind, I think, the answer is both a YES and a NO! Yes, because some local insurance companies have extended their travel insurance covers to include COVID-19 (which was hitherto excluded from the list of diseases covered under travel insurance). Then again, virtually everyone has come to a realization that it may not be safe to travel or be held up in other countries due to border closures and / or restricted movements.
This has naturally triggered the need to protect themselves against all unforeseen circumstances including having to overstay due to border closures (or other government restrictions with the view to control the spread of the virus).
It is a NO because, virtually no one is travelling anywhere and so demand had dipped so low especially during the pre-vaccine epoch! It is estimated that prior to the pandemic, the aviation industry contributed US$63 million to the Gross Domestic Product (GDP) of African economies with support for 7.7 million jobs. These figures have since dipped to US$32 billion loss to GDP thus putting at least 5 million jobs at risk. (mylocaltravelclinic.co.uk, www.norvanreports.com).
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Was Travel Insurance really necessary?
A couple of years ago, a friend requested my assistance to obtain a travel insurance policy in order to meet the entry visa requirement of the embassy of a European country he was scheduled to travel to. Indeed, he didn’t find that requirement necessary, as he thought it was only going to add to his travelling cost.
Anyhow, there was no way his application was going to be accepted and processed, without meeting this requirement. Having noticed my friend’s ill-informed view of this requirement, I painstakingly explained to him the concept, features, benefits, exclusions and claims processes of a travel insurance policy.
Travel Insurance explained
Persons travelling outside the borders of their home countries (e.g. Ghana) either for business, holidays, visits, sports tournaments, are often vulnerable to many risks before, during and after the journey. A travel insurance policy therefore, provides cover against the risks of travelling which may include medical fees, loss of personal belongings, flight cancellation charges, third party liabilities, death, injury, etc.
Duration of Cover
The duration of this policy does not usually exceed ninety (90) days, though yearly policies could be granted to regular travelers and students. It is usually provided by a local insurer in partnership with an internationally accredited one.
Scope of the Standard Cover
- Medical Expenses where surgical fees, hospital charges and emergency dental treatments are covered. Additionally, the cost of air-ambulance for the sick traveler, his / her close relations, friends and accompanying nurse(s), are all provided for in the cover. The policy may also cover the repatriation of policyholder’s corpse or ashes in the event of death.
- Loss of luggage where there is reimbursement for loss of luggage, personal effects, missing passports, etc. The compensation here is, however, based on agreed limits.
- Travel delays usually occasioned by bad weather, or strike actions 12 hours into the original departure time. I am inclined to believe that the inclusion of COVID-19 cover is likely to be factored in here for longer stay occasioned by border closures among other restrictions.
- Personal liability arising from the insured’s legal liability for injury or accident to third parties in the course of travelling.
- Hospital Cash benefits arising from the insured being hospitalized. Daily cash payments may be applicable, but subject to agreed terms.
It is worthy to note that, in the unfortunate event of a Ghanaian losing his or her life while abroad their local insurance company in concert with the foreign partner will consequently be responsible for repatriating their cadavers or ashes to Ghana.
Optional Benefits
Policyholders have the option to request additional fee-based benefits, which may not be contained in the standard policy. Below are some context-specific optional benefits available to policyholders:
- Financial failure of tour organizer or guide for especially booked holidays to whom advance payments have been made.
- Lack of Amenities – poor service provision in relation to utilities such as water, electricity, broken down elevators, swimming pool facilities, at a hotel where the traveler is staying.
- Cover could also be extended to legal costs in pursuing claims for compensation and damages arising out of death or injury to the traveller.
Could the demand for travel insurance increase?
Travelling to any part of the world has become a very sophisticated adventure, especially as occasioned by the pandemic! The need for individuals to protect their lives against the uncertainties associated with being in a foreign land, has become more imperative than ever before.
Until this pandemic, Travel Insurance remained mandatory for only applicants wanting to travel to mainly some 26 Schengen countries including The Netherlands, Austria, Italy, Spain, etc as it is a major requirement for the acquisition of entry visas.
This demand triggered the custom-design and sale of travel insurance policies by the various insurance companies in Ghana.
I am of a stronger conviction now than ever before that the emergence of the pandemic could increase the demand for travel insurance. I would not be surprised if it becomes a requirement that goes beyond just the Schengen countries but a standard requirement for obtaining entry visas to any other country in the world.
The hitherto lukewarm attitude of some applicants towards travel insurance is most likely to change, given the emergence of the pandemic and other unforeseen illnesses globally. It is important, therefore, that prospective travelers do not limit their view of travel insurance as merely for meeting entry visa requirements, but a means of adequately protecting their lives and those of others whiles abroad.
The Way Forward
It is becoming increasingly necessary for insurance companies to continue to provide adequate education to the public, especially prospective travelers, detailing the features, benefits and claims procedures of travel insurance.
By so doing, travelers will not just view travel insurance as merely satisfying the requirements of embassies, but an opportunity to adequately protect themselves and their valuables, while on such trips abroad.
This is the reason travelers need to talk to their insurance companies, and / or brokers in order to apprise themselves of the need for travel insurance which has become like ‘buttons to a shirt’!
I personally expect nothing but a scramble for this type of insurance globally without merely being seen as attempting to satisfy all ‘righteousness’ as a pre-requisite for entry visas.