Thailand has most travel cover claims and insurance may become compulsory

Thailand has taken the unwanted crown of having the most travel insurance claims per total number of visitors from Britain, according to new annual data.

In addition to having a higher rate of accidents and emergencies, the Asian country also has a higher incidence of cancellations and the second highest cost of cancellations, at £720, the Post Office index shows.

It comes as Thailand has revealed it is considering introducing a compulsory travel insurance scheme in order to increase confidence in holidaymakers when visiting the country. You can read more about this at the bottom of the article.

There have been a number of recent tragedies in Thailand – including last year’s boat accident off Phuket which killed 47 Chinese tourists – which is likely to have contributed to the decision. 

Thailand has been named as the location responsible for the most travel insurance claims – pictured the Grand Palace, Bangkok

The Centre for Economics and Business Research, on behalf of Post Office Travel Insurance, has launched the index to help inform holidaymakers about the potential cost implications and level of risk of travelling to popular travel destinations. 

It examined 17,295 claims from Post Office Travel Insurance customers and Consular Assistance requests to the Foreign and Commonwealth Office in 2018 in 49 of the most visited destinations by UK travellers.

The index reviewed claims submitted to Post Office Travel Insurance and FCO assistance requests in 2018 over six categories: accidents, baggage, cancellations, travel documents, victim of crime assistance and emergency assistance.

The data was then analysed to discover where people were more likely to claim on their insurance or need assistance from the FCO.

By comparing a country’s score to the average in each category, every country was assigned an index ranking. 

The index is scored on a 10 point scale, with a 10 indicating a country with more claims at a higher cost.

Thailand topped the index with a score of 5.9, closely followed by New Zealand and Sweden, with scores of 5.7 and 5.6, respectively.

New Zealand might well be known for its extreme sports, but it is the high incidence of travel document requests which lands it in second place on the index – as well as a higher than average cost of medical treatment, at £1,640, and a high cost of cancellation, at £450. 

Sweden is considered one of the safest countries for travellers and, as a member of the EU, travellers often think that with a European Health Insurance Card they don’t need travel insurance when visiting.

However, Sweden holds third place due to high baggage disruption and a higher than average baggage claim cost of £250.

TOP TEN COUNTRIES WITH HIGHEST LEVEL OF RISK ON POST OFFICE INDEX
Rank Country Index
1 Thailand 5.9
2 New Zealand 5.7
3 Sweden 5.6
4 Israel 5.3
5 Cyprus 5.3
6 Egypt 5.1
7 Japan 5
8 India 5
9 China 4.9
10 Brazil 4.8
Source: Post Office  

Accidents make up 60% of claims 

Overall, the index found that accidents (claims for medical costs or repatriation) top the list of travel insurance claims abroad, making up 60 per cent of claims.

Baggage delays made up 19 per cent, cancellations accounted for 21 per cent. 

Meanwhile travel documentation support accounted for 75 per cent of all requests to the FCO. 

The research also found some 22 per cent of people have experienced the financial implications of an incident abroad, leaving Britons £543 out of pocket, on average. 

Despite this, 37 per cent of travellers still regularly travel without travel insurance, with 23 per cent blaming the cost.  

Japanese and Indian medical costs can spiral…

The Post Office revealed travellers to Cyprus had a higher than average number of medical claims abroad as well as a relatively high average cost of claims.

Popular locations, such as the US, Japan and Canada, made up the other top five positions for average medical claim cost and frequency – accounting for their high position on the index.

Whilst the average medical claim cost was found to be £970, holidaymakers in North America paid twice that at £2,030 whilst the highest average claim cost for a single country was found to be in India at £4,540.

According to the research, nine per cent of travellers still don’t get insurance when heading to Europe as they believe they will be covered by their EHIC. 

However, even holiday-goers travelling to countries at the very bottom of the index, including Ireland and Slovakia, have incurred some medical costs, at £390 and £230, respectively. 

TOP FIVE COUNTRIES WITH HIGHEST RISK OF MEDICAL COSTS
Rank Country Average cost per claim (£) Index
1 Cyprus 970 6.7
2 Japan 4,060 6.6
3 US 2,390 6.5
4 Canada 1,670 6.4
5 Turkey 750 6.3
Source: Post Office      

Last minute plans

Some 20 per cent of people admit to purchasing insurance in just the month leading up to their holiday – despite the fact that 22 per cent of people also said they have to cancel a holiday before going.

Travellers claimed £320 on average for cancellations in 2018 but some destinations had higher financial implications and were much more likely to see travellers left out of pocket for cancelled holidays.

Meanwhile, data from the FCO revealed that travel documentation was the most common reason for consular assistance in 2018, with over 27,000 cases handled across 49 countries.

Travellers were three times more likely to request assistance from the British embassy, consulate or high commission with passport or visa issues than for help in relation to accident, emergency, hospitalisation or death.

Emma Springham, spokesperson for Post Office Travel Insurance says: ‘One in 10 travellers who don’t buy insurance say it’s because they don’t travel to risky countries, but people often conflate “risk” with accident, and not with cost, and as our index illustrates some of the safest countries can land you with a serious bill.

‘You can’t prepare for everything, but what you can do is make sure that when you’re stuck in a difficult situation abroad you’ve set yourself up to hopefully minimise the impact. 

‘Spending a little now can avoid a large financial shock later down the line.’

Thailand considers making travel insurance compulsory 

Thailand has announced it is considering making travel insurance compulsory for all holidaymakers – This is Money takes a look the potential changes:

How would travellers get the insurance?

They will be available to purchase at immigration offices at Thailand’s airports.

How much will it cost?

It would cost 20 baht (52p) for 30 days’ cover. All proceeds would go to Thailand’s Tourism Promotion Fund and used to cover payments in the event of a claim, the secretary-general Suthiphon Thaveechaiyagarn said.

Why has Thailand decided to do this?

The idea of compulsory insurance is designed to reassure travellers and build their confidence when visiting the country after a number of tragedies occurred there, including last year’s boat accident off Phuket which killed 47 Chinese tourists.

-What will the cover give me?

Tour operators must now provide tourists with cover of at least one million baht (£26,000) in case of death and 500,000 baht (£13,000) in case of injury.

-Should I still buy my own travel insurance?

The advice from experts is, yes, you should still arrange your own cover. 

Nel Mooy, Head of Travel at AXA Insurance, said: ‘The compulsory insurance contemplated by Thailand appears to only be covering tourists if they die and not if they are injured. 

‘Yet, medical expenses abroad can be very expensive. We recommend that tourists holidaying in Thailand continue to buy a travel policy in the UK no matter what.’

-When will this come into effect?

If the plans go ahead, it is expected the insurance will become compulsory later this year.  

THIS IS MONEY’S FIVE OF THE BEST HOLIDAY MONEY DEALS

 

 


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