Travel Insurance: What Actually Gets Claimed

What travel insurance is actually for

It is medical cover, and everything else on the policy is a small add-on. Most people buy it thinking about lost baggage, which is the claim they can imagine, and the claim that pays out USD 90. The reason the product exists is that a night in a hospital in Zurich costs USD 2,300 to USD 4,500, a night in a Singapore hospital USD 1,700 to USD 2,850, and an air ambulance from Europe back to Kathmandu runs USD 28,000 to USD 51,000.

The typical claim distribution across South Asian outbound insurers is roughly 55 to 60% medical, 20 to 25% baggage delay or loss, 10 to 15% trip cancellation and curtailment, and the remainder passport loss and personal liability. But by value, medical claims are the overwhelming majority.

This is why shaving a dollar off the premium is not a saving. A single-trip policy for eight days in Europe with a US$100,000 sum insured costs USD 10 to USD 18 per person. The US$50,000 version costs about USD 2 less and leaves you exposed on the one thing you bought the policy for.

The Schengen €30,000 requirement

Schengen states require, in law rather than as a preference, a policy covering a minimum of €30,000 for medical expenses including emergency hospital treatment and repatriation of remains, valid in all Schengen countries and for the full duration of the stay plus any grace period on the visa.

Applications are refused for non-compliant insurance without the file being read further, and the common failures are avoidable: a policy that names some Schengen states but not all of them, a policy that omits repatriation of remains, or one whose end date matches the return flight rather than extending past it.

Buy cover for two or three days beyond your return date. If a flight is cancelled and you sit out an extra night in Frankfurt, an expired policy converts a minor problem into an uninsured one, and potentially into an overstay question on your record.

Several countries beyond Schengen also mandate cover — Cuba, Turkey for certain visa types, and Sri Lanka's arrival policy among them. Thailand, Indonesia, the UAE and Singapore do not require it, and it is still a bad idea to travel there without it.

Pre-existing conditions: the biggest hole in most policies

Standard travel policies exclude pre-existing conditions except in a life-threatening emergency, and even that carve-out is capped, commonly at 10% of the sum insured or a fixed figure like US$1,500. If you are managing diabetes, hypertension, asthma, thyroid disease or any cardiac history, that exclusion covers the illness most likely to send you to hospital.

A pre-existing disease rider costs an extra 25 to 60% on the premium and needs to be declared and accepted at purchase, sometimes with a medical questionnaire and, over 70, occasionally a check-up. Insurers will not add it after a claim.

The failure mode is not usually deliberate. Someone with well-controlled blood pressure, on the same tablet for a decade, does not think of it as a condition and leaves the declaration blank. They then have a cardiac event in Rome and the insurer declines the claim on non-disclosure. Declare everything you take a regular medication for, including the ones you have stopped thinking about.

Travellers over 70 face a separate problem: fewer insurers will write the policy at all, sums insured are capped lower, and premiums rise steeply. Shop that policy three or four weeks before travel rather than three days.

Adventure sports and the quiet exclusions

Almost every standard policy excludes injuries sustained during hazardous activities, and the list is broader than most people expect. Reading it after booking the trip is the wrong order.

• Scuba diving — usually excluded below 18 or 30 metres, and excluded entirely if you are not certified or diving without an instructor.
• Skiing and snowboarding — excluded off-piste by default; a winter-sports rider adds USD 5–15 for a week and covers piste closure and equipment.
• Trekking above a stated altitude, most often 3,000 m or 4,000 m. Everest Base Camp at 5,364 m, Thorong La at 5,416 m and Larke La at 5,106 m all sit above the standard ceiling, and the policy must name an altitude at or above your trek's high point.
• Helicopter evacuation, which standard policies exclude outright. In Nepal it is the only realistic way off a trail above Namche or Manang, it bills USD 4,000 to USD 8,000, and it has to be listed as a covered benefit rather than inferred from 'emergency medical'.
• Bungee jumping, skydiving, paragliding and white-water rafting above grade 3.
• Riding a two-wheeler abroad without a valid international driving permit and helmet, which voids the claim outright in Bali, Thailand and Vietnam.
• Any injury where a blood test shows alcohol above the local limit, which quietly removes a large share of holiday accident claims.

Baggage versus medical: what the numbers look like

Baggage claims are the ones people expect to make and the ones that disappoint. Checked baggage loss typically pays US$500 to US$1,000 against a full airline-confirmed loss, and only after the airline's own liability is exhausted. Baggage delay pays a fixed daily allowance, commonly US$100 for each 12-hour block after the first 8 or 12 hours, against receipts.

Note the ordering: the airline pays first under the Montreal Convention, up to roughly 1,288 SDR, about USD 1,750. Your insurer covers what remains. Claiming from the insurer without first raising a Property Irregularity Report with the airline gets the claim rejected on process alone.

Medical is where the sum insured earns its cost. Choose US$100,000 for Europe and Southeast Asia and US$250,000 to US$500,000 for the United States and Canada, where an uncomplicated appendectomy bills US$25,000 to US$40,000 and a coronary event runs past US$150,000. The premium difference between US$100,000 and US$500,000 on a two-week policy is usually USD 8 to USD 20.

What a claim actually needs

Claims are declined for paperwork far more often than for policy grounds. Insurers require notification within a stated window, usually 24 to 48 hours of the incident, and originals rather than photographs of most documents.

• Call the 24-hour assistance number before treatment wherever the situation allows. Cashless hospitalisation only works if the insurer authorises the hospital in advance.
• Original itemised hospital bills, discharge summary and the treating doctor's report. Not a payment receipt alone.
• A police report filed within 24 hours for theft, loss of passport, or personal-liability incidents. No FIR or its local equivalent, no claim.
• The airline's Property Irregularity Report for any baggage claim, obtained at the airport before you leave it.
• Boarding passes, e-tickets and passport pages showing entry and exit stamps, which establish that you were insured and in-country on the date.
• For cancellation claims, documentary proof of the reason — a medical certificate, a death certificate, or a written notice from the airline or tour operator.

What it costs, and where to buy it

A single-trip policy from a Nepali or Indian insurer for a traveller under 60, with a US$100,000 sum insured, runs about USD 6 to USD 10 for a week in Southeast Asia, USD 10 to USD 18 for ten days in Europe, and USD 25 to USD 45 for two weeks in the United States. Over 60, expect roughly double, and over 70, three to four times.

Multi-trip annual policies make sense above three international trips a year. They cover unlimited journeys with a per-trip cap, usually 30 or 45 days, and cost USD 70 to USD 160 depending on region and sum insured.

Credit-card complimentary insurance is thinner than it looks. It typically activates only if the flight was paid for on that card, excludes pre-existing conditions absolutely, carries low medical sums insured, and often will not issue the Schengen-compliant certificate a consulate wants. Use it as a supplement, not as the policy you submit with a visa application.