The World is Rapidly Changing…Are You Prepared to Travel in It?

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by Carolyn Konecki, Personal Lines Manager, Cavignac & Associates

The beginning of the year is when a lot of people plan their business and leisure travel for the year. They decide which conferences to attend, where to take their summer vacation and when to visit family members who live in other states. They also see if they can fit in an international trip – maybe even one that’s on their bucket list!

International travel offers many benefits; it changes perspectives, develops cultural sensitivity and allows you a chance to totally relax. According to the U.S. Travel Association, U.S. citizens directly spent $246 billion on international travel in 2015. While most people don’t equate planning their international vacation with risk, the fact is, the world is changing and travel – especially international travel – is becoming riskier. What are the risks and how do you mitigate or avoid them?

TRAVEL RISKS

Trip Interruption

Most elaborate vacations require weeks or months of planning and large deposits paid up front. What do you do if you or a member of the traveling party becomes ill or injured and can’t go on the trip? How do you recoup the non-refundable deposits you paid?

Trip Delay and Lost Baggage

Bad weather can cause flight delays, which can cause you to miss your event departure. What if you arrive at your destination but your luggage doesn’t? And, what if that luggage contains the wedding dress for your destination wedding? What if your connecting flight gets cancelled? How can you recoup the costs for an unexpected hotel stay and new flights to return home?

Medical Emergencies

A medical emergency can arise at any time, whether due to an existing medical condition, a sudden injury, or an illness. Being far from home and far from good medical care can be extremely stressful. No one likes to think about it happening, but a medical emergency can happen to anyone of any age and any time.

Last year, a 23-year-old client slipped on the private yacht he was on and severely injured his back. He was in the middle of the Caribbean ocean, miles away from “civilization” and proper medical care. Another client, who was on an African safari in Kenya, experienced a medical emergency that required immediate surgery. In both situations, the clients were evacuated by helicopter to the nearest hospital.

Emergency Evacuation

Medical issues are not the only reason that you may need to be evacuated. Many parts of the world, even so-called “safe” spots can experience a terrorist event or civil or political unrest. Or, a natural disaster, such as a hurricane or earthquake, may occur. How will you get home and who will pay for the additional expenses to get you home? Who will reimburse you for your lost vacation?

Kidnap

While rarely publicized, crisis events such as kidnap for ransom, extortion and wrongful detention are ever-increasing threats, not only to you but to your extended family. An often overlooked area is college students spending a semester abroad. Has your teen been prepared so that he or she knows how to live safely and not attract unwanted attention? How can you avoid being a target or reduce the risk of being kidnapped? What resources do you have if you or a family member were to be kidnapped?

All of these unexpected occurrences are real risks that travelers face with each trip. However, the risks can be mitigated with some pre-trip planning that includes ways to avoid or reduce risk as well as options for risk transfer.

Pre-Trip Planning

Just as you are going to plan to pack the proper attire for your trip, plan to protect your health and safety, too. First, determine if you need any vaccinations for the locations you are visiting. Enter your destinations into the Centers for Disease Control and Prevention website (www.cdc.gov) and you’ll know which vaccinations you may need and how far in advance you need to get them. If you are going to be gone for several weeks or months, complete your routine health care visits (physical, dental hygiene, eye exam) before you go.

If you take medications, keep your medications in their official containers and have your doctor supply prescriptions in the language(s) of the destination location(s). Travel with your prescriptions and medications in separate locations in case a bag is lost or stolen. Remember, some medications are illegal in certain foreign countries. Research the legality of your medications before you take them.

Make copies of your passport, bank cards, insurance card, driver’s license and emergency contacts and keep them in an online repository like Dropbox or provide copies to your trip insurer so that if your wallet is stolen, you can retrieve them electronically. Guard your credit card and personal information at all times.

If you are going someplace you have never been before, research where the nearest hospital or medical facility is located. Keep a personal health history with you, preferably in the local language. Have a plan of who you will call and what you will do in case you are injured. Have an emergency contact card in your wallet and make sure the data is current. Know how to ask for help in the local language.

Pre-trip planning reduces the fear and anxiety that accompany an unforeseen event. Most likely, nothing will happen but, if it does, you will be prepared and will have a much more successful outcome.

Risk Avoidance and Risk Reduction

As risk managers, our job is to help our business and personal clients minimize or avoid travel-related risks. Of course, avoiding certain activities such as sky diving or rock climbing while on vacation will reduce the risk of injury, but so will not advertising your wealth which can reduce the chances you will be a crime victim.

However, not all risks are avoidable. The prudent action is to takes steps to reduce as much of the risk as possible and to develop a plan in case something happens. A good first step to reducing risk is to research the location which you want to visit on the U.S. State Department’s website (www.state.gov/travel). The site describes the current situation in that country and lists any travel alerts and warnings. They can also assist with arrest and detention, death abroad, lost and stolen passports, medical emergencies, missing persons, natural disasters, abductions, crime victims, and locating loved ones in a crisis.

You can also register with the State Department’s Smart Traveler Enrollment Program (www.state.gov/documents/organization/83011.pdf) which is a free service that allows U.S. citizens traveling abroad to enroll with the nearest U.S. Embassy or U.S. Consulate and provides them with the latest safety and security information. You can also contact the U.S. Embassy in the event of an emergency and receive assistance which allows family and friends to contact you in an emergency.

The Federal Aviation Administration’s website (www.faa.gov/air_traffic/flight_info) allows visitors to check all the U.S. airports for delays in real time. Most airlines also offer updates on flight delays and many allow you to register for text message or email updates.

Emergency concierge services can provide translation services, legal assistance, emergency cash transfer and other crisis avoidance assistance.

Risk Finance (Risk Transfer)

A popular option for reducing risk is to transfer the risk to another party. Specialty insurance products offer some real benefits.

Travel Insurance

Travel insurance offers travelers coverage for unforeseen problems, from a cancelled flight to a serious illness—or in rare cases, even an act of terrorism or the financial default of a travel supplier. If an illness, accident, or other covered unforeseen circumstance forces you to cancel or interrupt your travel plans, you face two potentially major financial losses: money invested in non-refundable pre-payments and medical expenses that may not be covered by health insurance.

A travel insurance plan can also cover you for unexpected costs incurred before or during your trip so costs are less likely to come out of your own pocket. A travel insurance plan can reimburse you for the pre-paid, non-refundable portions of a trip if you need to cancel or interrupt your trip for a covered reason. A travel insurance plan can also include medical evacuation coverage (the price of which may cost upwards of $100,000) and medical expense coverage, plus reimbursement for lost, damaged or stolen luggage and personal effects. Most travel insurance plans also include 24/7 assistance services to re-book flights and hotels on your behalf and act as a personal travel assistant while you are away from home.

There are also some do-it-yourself websites (www.insuremytrip.com or www.travelinsurance.com) where you can research and purchase travel insurance online. Beware, though, that not all products are the same and it is vital that you compare each carrier’s coverages and exclusions if you choose this route.

A better option is to have your personal risk advisor help you tailor a travel insurance product that specifically meets your needs. For instance, Chubb’s Passport 360 is a robust travel accident program that provides many forms of protection in one package. Passport 360 covers evacuation for travelers if there is a medical emergency or security threat while traveling. Coverage can be enhanced with optional upgrades such as trip interruption/trip cancellation and event ticket cancellation. You do not need to be a current Chubb policyholder to purchase their travel insurance.

AIG owns TravelGuard, which offers many excellent travel coverage solutions, ranging from basic flight insurance to all-inclusive plans. Their plan provides year-round coverage which lets you avoid the hassle of purchasing insurance trip by trip. The policy features include trip interruption and cancellation, trip delay, delayed baggage, lost or damaged luggage, medical expenses, medical evacuation, and rental car coverage. Coverage can be bought for an individual or family and non-family members, such as personal assistants or nannies, can be included. Their plans also include 24-hour travel assistance.

Kidnap and Ransom Insurance

Many homeowner’s products designed for affluent and high-net worth individuals automatically include coverage for kidnapping expenses, so it’s advisable to check with your personal insurance agent to see what coverage you already have in place.

A kidnap and ransom policy can be purchased to cover both your business and personal travel for up to one year and covers events such as a kidnapping or alleged kidnapping, personal extortion, property extortion, wrongful detention and hijacking. The policy also includes the services of experts trained to respond to these types of events.

With this policy, you will be reimbursed for expenses such as ransom and extortion monies, transit and delivery payments, consultant expenses, judgement, settlement and defense costs, death and dismemberment and personal financial loss.

One of the insurance companies that offers kidnap and ransom coverage is AIG. A valuable feature of their policy is the complimentary pre-incident briefing services as well as access to their response consultant for general inquiries and brief updates. Their crisis response team is also available 24 hours a day, seven days a week.

Conclusion

Travel, like any other activity, contains risks and, as your professional risk advisors, we want you to be aware of these risks so that you can make informed decisions about the best way for you and your family to travel safely.

Please let us know if we can answer any questions you may have regarding how to travel safely.

Bon voyage!