Is Travel Insurance Necessary?

I will be flying to Bali for a short getaway and I decided to cover the topic about travel insurances. Whenever you book your plane tickets, you always come to the final page of the booking where they present you with the option to add on travel insurance to your booking. You then ask yourself (as well as your travel companions) whether travel insurance is necessary. Personally, I used to skip past these pages as quickly as possible because I always told myself nothing is going to happen - what are the chances, right?

Well, that was up till I went on a trip to Phuket with one of my close friends. We rented scooters to ride around the island. Everything went smoothly, until I saw him drifting across the asphalt at one of the bends in the mountainous roads where he came to a stop by knocking his head into the guard rail. Thankfully he did not suffer any head injuries, but he had a bad case of road rash and the next few days of island hopping and snorkeling for him were ruined. I am glad we put on the cheap helmets that were provided, and also the passerby who helped us by rushing home to drive his pickup truck so we could transport the scooter to a repair shop (He followed up the next day and took us to collect the scooter - I'm not sure what we were to do without him).

Sob story aside, this taught my friend and I a very important lesson - an extremely painful one.

When we come to the topic of insurance, most people become apprehensive of the idea. However, when we come across a 1-for-1 deal at Starbucks, how many of us drop everything in hand, grab a friend and drag them to the nearest outlet? (maybe not to such extremes, but you get what I mean)

While there might be a few differences, most travel insurances generally cover the following:

• Trip cancellations (usually only pre-paid expenses can be reimbursed)
• Trip curtailment
• Travel delays
• Overseas medical expenses
• Emergency medical evacuation
• Baggage delay
• Baggage/Personal belongings

Most of the above insured pertains to the financial risk you may incur in the event of such unavoidable circumstances. However, the key point to note about a travel insurance is the medical coverage it provides you. Not only does a travel insurance compensate you for overseas medical expenses, it also provides you coverage for an emergency medical evacuation, if such a need arises.

Based on the rates by VIP Jets, a medical evacuation from Bangkok to Singapore (one way) would cost close to $25,000. This fact can be further strengthened by this article written on AIG's website where "hospital expenses and an emergency medical evacuation from Thailand to Singapore amounted to $75,000".

But I am covered by my personal medical insurance policy!

Yes, you will likely be able to make claims for medical expenses incurred overseas. However, take note that your policy might not cover certain areas and you might end up having to fork out expenses from your own wallet - such as requirements to spend a night in hospital, etc. Also, the cost of an emergency medical evacuation is often not covered.

The amount of travel insurance coverage you purchase is up to you. But a basic travel plan should be considered if you are going to travel out of Singapore. If you are still brushing off the idea of purchasing a travel insurance for your next holiday, ask yourself this:

Would I rather enjoy 2 cups of Starbucks now, and risk a $75,000 bill at the end of my holiday?

* The cost of a travel insurance for a 3d2n trip to Bali costs $13.