Breakdown of a giant travel claim Rob Stock
Looks at the potentially staggering costs of illness overseas.
Astudent from New Zealand collapsed while overseas. She was rushed to hospital, and diagnosed with an aggressive form of cancer she had no idea she had.
The pneumonia and infection that had caused her collapse were secondary symptoms. Her lung collapsed, and she ended up on life support.
Her family flew to be with her, but she died before they could bring her home.
The human cost of medical misadventure is impossible to quantify, but the economics of it are grimly easy to count.
Allianz Partners was the insurer which handled that claim.
The breakdown:
❚ Hospital stay and treatment:
$88,501.
❚ Cost of flying family to her bedside: $5134.
❚ It would have cost around $43,000 to bring her home alive.
❚ The cost to bring her home after her death was much lower.
Such catastrophes for travellers are rare, but along with cancellation and travel disruption, they are the reason why most people who travel further afield than Australia take out travel insurance.
The biggest seller of travel cover is Southern Cross Travel Insurance.
In the year to the end of June
2017, SCTI sold more than 300,000 policies. It paid out on more than
40,000 claims.
Yet only a tiny fraction involved truly massive medical and repatriation costs.
SCTI paid 10 claims over
$100,000 during the 2017 calendar year, ranging from $106,000 to
$682,000.
The breakdown of individual claims can vary widely from region to region.
SCTI’s largest claim of 2017 was a heart attack in Europe which necessitated a lengthy stay in hospital.
The actual hospital fees made up a relatively tiny portion of the cost. The country had a reciprocal emergency healthcare agreement with New Zealand.
It was the air ambulance home, and the specialist staff on board that cost a mint.
‘‘Ordinarily, after a hospital stay a traveller is cleared by medical staff as ‘Fit to Fly’ and they go home on a commercial airline accompanied by medical staff and with specific seating configurations,’’ said SCTI spokeswoman Jo Lawrence-King.
‘‘In this specific case that was not possible and an air ambulance was needed to bring the traveller home. An air ambulance is essentially a flying intensive care unit. It requires a highly-trained specialist medical crew to support the patient.’’
In 2016, Allianz Partners handled just over 9600 medical repatriations around the world, said Renato Mattos, including a handful back to New Zealand.
Most made it back on commercial flights, but 1164 had to be taken home by air ambulance.
For New Zealanders, the return to their geographically isolated homeland can be particularly expensive.
Specialist ground transport was also often needed at each end of the journey.
The country where travellers really don’t want to have a medical crisis without travel insurance is the US.
Mattos said one recent claim handled by Allianz Partners was for $250,000.
The poor traveller concerned was on a three-month jaunt through the US, when on day three of his trip of a lifetime, he had a ‘‘heart issue’’ in San Francisco.
A mere 10 days later, and there was a hospital bill of $180,000.
Mattos said often people cannot get treated in US private hospitals until they can prove they are good for the bills. Travel insurers’ global assistance networks provide those guarantees when a claim is accepted.
The remainder of the traveller’s claim expenses were $30,000 in cancellation costs, $8500 to fly out a close relative from New Zealand, and $13,000 for a ‘‘medical escort’’ back to New Zealand on a commercial flight.
SCTI experiences the US effect too. Its second-largest claim of 2017 was $212,000 for a man who suffered a bowel illness in the US. The hospital and medical costs made up around 80 per cent of the claim.
Surgery in the US can result in even higher bills. One claim by a traveller to Hawaii ended up costing Allianz Partners $380,000, for which $365,000 was the surgical and hospital bill.
Not every giant medical treatment and repatriation bill gets paid.
The onus is on the buyer of travel insurance to ‘‘disclose’’ all pre-existing medical conditions, which is generally a condition they have been diagnosed with, or symptoms of it have been investigated by medical practitioners.
Travel insurers do not check customers’ medical records before a claim.
That’s even the case with SCTI, which does have access to claims records for policyholders who get a discount on their cover, as they are also a health insurance policyholder with Southern Cross Health Society. They may do so when one is lodged.
It is easy for buyers flushed with excitement in booking their dream trips overseas to hurry through buying travel insurance. That’s a mistake.
It will end up costing more, but travellers with pre-existing conditions must tell the insurer, and to check that any claims arising from them will be covered.
Travel insurance claims do get turned down as a result of preexisting conditions, sometimes wrongly so, as cases that have come before the Insurance and Financial Services Ombudsman show.
Travellers must also behave sensibly, and check what ‘‘exclusions’’ there are on the policy they bought.
An example of some of the range of ‘‘general exclusions’’ that travellers must be aware of is shown in 1Cover’s 56-page overseas travel insurance policy.
❚ Claims resulting from policyholders acting irresponsibly in protecting themselves.
❚ Claims where people have not done ‘‘everything’’ they can to reduce their loss ‘‘as much as possible’’.
❚ Claims that resulted from illegal actions, or riding a moped or motorbike when they don’t have a New Zealand licence to ride them.
❚ The claim is related to an epidemic or pandemic, or war, rebellion, civil unrest, or chemical or biological terrorism.