With travel numbers beginning to rise, travel insurance companies operating in South Africa report that they are already regularly processing claims associated with COVID-19. Although leisure and corporate policies will cover most medical treatment costs, subject to certain conditions, service providers warn that cancellations and disruptions can still leave travellers out of pocket. But perhaps the most important message is that travel insurance is absolutely critical for any cross-border travel during the pandemic.
Travel Insurance Consultants (TIC) manager – sales & marketing, Simmy Micheli, said TIC was receiving at least one COVID-related medical claim per week. She said, at the same time, 80% of current sales enquiries related to the disease.
“Luggage cover is frequently seen as the most important benefit in a policy, but this may turn out to be the least of your concerns when you leave the borders of your country. The most important benefit of a policy is always the medical cover,” Simmy said.
TIC’s claims history shows that hospitalisation and repatriation costs from abroad can run into millions of rands.
Recent medical expenses claims processed by TIC include:
*An R18,5m claim to treat a patient in Los Angeles for encephalitis.
*A traveller with pneumonia in China, which resulted in a R4,5m claim.
*A claim of R1,5m from a policyholder who suffered multiple organ failure in Perth.
COVID-19 claims add up
TIC paid just over R4m to a traveller and his wife who were on a cruise when the ship docked early due to the coronavirus crisis. “The couple booked into a hotel for the duration of the lockdown, but the man became ill and was admitted to hospital, where he tested positive for COVID-19. He was transferred to ICU as he needed to be intubated and placed on a ventilator. He responded to treatment and when he was fit to travel, was repatriated back to South Africa,” Simmy said.
“The claims cost depends on several factors, including the destination and the currency, the health fitness of the patient at the time of becoming ill, whether we need to fly the patient to suitable facilities, etc. Each claim is a unique story, and cost.”
Hollard Travel, which provides COVID-specific travel insurance cover, subject to certain conditions, recently assisted a policyholder in Nigeria who tested positive four days after arrival. “He had to be repatriated by air ambulance from Nigeria as his condition became critical and he was in a remote location without access to ICU,” said head: Hollard Travel, Uriah Jansen.
Know what’s covered
Tests for travel purposes are not covered by Hollard’s policies, nor are situations where patients’ test results are negative. Uriah clarified: “As we have been dealing with COVID for more than 12 months, we know the high-risk factors that could potentially lead to hospitalisation and/or death should you test positive. Based on this, we provide cover for low- to medium-risk travellers.”
Bryte Insurance told Travel News: “As South Africans are still not able to travel to many countries internationally, we have noted that the registration of new claims is still quite low. That said, since the onset of the pandemic in 2020, Bryte has processed in excess of 5 000 COVID-related claims.”
Bryte travel insurance policies provide cover for emergency medical and related expenses whilst abroad. “Should a policyholder become infected with COVID-19 during their travels and require medical treatment, the benefit will continue to apply,” a spokesperson for the company explained.
“Cover for emergency medical expenses includes medical evacuation, transport to medical centres, etc. In the unfortunate event of death, costs for burial, cremation or the repatriation of mortal remains to South Africa are covered. Also included is a benefit for the costs of the return of any stranded children or the policyholder’s travel companion,” Bryte said. Policy terms and conditions apply.
TIC warned that customers needed to be prepared that costs incurred as a result of trip disruptions related to COVID-19, lockdown or travel bans were not necessarily covered.
“All TIC policyholders are covered for emergency medical and related expenses as a result of contracting the virus whilst on a journey. Costs incurred when there are trip disruptions as a result of contracting the virus are not insured on a TIC policy,” Simmy confirmed.
TIC will usually provide medical cover to all travellers up to the age of 85 years. However, Simmy cautioned: “You should also consider the fact that you might not be able to undertake the trip due to the pandemic restrictions, in which case you would not be able to claim.”
Managing customer expectations
Uriah cautioned agents on some points about travel during the pandemic. “Unfortunately, high-risk travellers cannot obtain cover for COVID-related claims, such as elderly travellers, unless they have received the vaccine. Clients must declare any material information relevant to the cover to the insurer. If the client has any questions, please refer them to the insurer to make sure the client buys cover suitable for their needs. We do not cover flight cancellation claims where the flight was cancelled by the airline. Travel agents must communicate with the airline as per the airline’s conditions of carriage/refund policy when the airline cancels the flight.”
While most of Hollard’s claims have not included medical treatment costs, the company sees claims for accommodation costs when travellers are required to quarantine.
How COVID compares to other major health risks
TIC provides unconditional cover for tropical diseases, including malaria, which the company still describes as the leading risk when travelling into Africa.
Claims manager, Noel Joseph,said it was impossible to compare the costs associated with claims for treating malaria and for COVID-19. However, malaria was still a major concern when travelling into Africa, and due diligence must be taken. “Malaria, if diagnosed earlier, is treatable. COVID is a little more complicated, as [treatment] is affected by the variant you are diagnosed with, the locality you find yourself in, age and co-morbidities. Some travellers may be asymptomatic. Travel and care are governed by national and regional authorities [which the insurer is obliged to follow] when assistance and cover are rendered, subject to terms and conditions,” he said.
According to Uriah, Hollard reviews its products regularly to ensure benefits keep up with changing conditions.
Cancellation benefits
Travellers must check their policy wording for cancellation benefits.
Hollard Travel Insurance cover will provide for inpatient treatment; medical quarantine (when you test positive); the cost of a test (when you test positive); event cancellation resulting in a cancelled trip; cancellation for any reason when you cancel 48 hours or more before departure date. But, cancellation and curtailment benefits for COVID-19 only applied when travellers purchased their insurance within 24 hours of paying their first trip deposit, the company said.
Simmy said cancellation benefits were frequently misunderstood. Many travellers assume that their travel insurer will cover any event that results in a trip being cancelled, which is not the case. Concerning TIC policies, Simmy explained: “This is simply not true. To put it in a nutshell, cancellation cover can be regarded as an extension of your medical cover, where your policy will cover you for losses if you are unable to travel due to an unexpected medical condition.”
TIC would cover between six and ten events that led to a cancellation, Simmy said, including a sudden illness; unexpected death or the death of an immediate family member; the theft of travel documents; an airline cancelling tickets due to strike, riot or civil commotion; retrenchment; or a traumatic event before departure.
“These events are listed and described in the policy wording. Anything else is excluded. It is impossible for an insurer to list all the various exclusions, therefore the policy lists the events that are insured,” Simmy confirmed.
“On some specific products, if you purchase your travel insurance within 48 hours of paying your first payment towards your travel arrangements, then you qualify for unspecified cancellation cover, which covers any reason that is not mentioned in the specified conditions.”
However, Simmy said few travellers fulfilled the conditions for this cover. “Cost is often a factor – it is more expensive to buy a comprehensive policy – also, travellers frequently do not consider travel insurance until the last minute, or may rely on free cover, offered by their banks or medical aid schemes.”
Simmy also warned: “You cannot purchase this cover after you have suffered an event that necessitates that you cancel your trip, as this is not fair to the insurer. Therefore, proof of intent is shown when you purchase your policy immediately after you book your trip.”
‘Nothing is completely risk-free’
A study published by Iata late last year, revealed that 86% of travellers felt the aviation industry’s COVID-19 measures up to that point were sufficient. Former Iata dg and ceo, Alexandre de Juniac, said at the time that there was “no silver bullet to travel in complete safety”. However, he was confident that COVID-19 had not defeated travellers’ freedom to fly: “Nothing is completely risk-free.”
Simmy encouraged travellers to scrutinise their policy wording and ask any questions before accepting a quote. Customers also need to read policy T&Cs thoroughly.
“Travel insurance is a product with which the average person is only vaguely familiar. And, as many policies are bought at the last minute as a once-off purchase, the traveller’s knowledge about the terms and conditions is often limited,” Simmy concluded.
Will this all cause a huge increase in travel insurance rates? Bryte Travel Insurance said: “The unprecedented increase in claim volumes coupled with the effects of lockdowns, both locally and globally, which includes travel bans, has impacted our pricing model. However, we continue to find ways in which to offer affordable travel insurance cover with tailored and tangible benefits that add value to both business and leisure travellers.”
Hollard’s premiums had been adjusted to take into consideration the additional cover/risk, said Uriah. “However, we are confident that our rates remain competitive, despite having to include COVID-related benefits for the low- to medium-risk travellers.
“We unfortunately cannot provide cover for high-risk COVID travellers as this will negatively impact the premium for all clients. In the past, travel insurance was a grudge purchase. COVID has changed the perception of the need for travel insurance as travellers don’t need a lot of convincing that they need to have adequate cover specifically for medical expenses in another country, or to protect their financial investment should they need to cancel their trip. Non-medical benefits have become less important, even though we still provide them.”
