||The importance of adequate insurance cover for an overseas stay cannot be overestimated, although as René Gillet of insurance brokers, Dr Walter, in Germany observes, “Many students do not really see the need for taking out insurance until something happens.”
Ross Mason, International Director of Work and Travel Insurance Services, based in the USA, agrees with Gillet. “I don’t think students will ever realise they need insurance coverage, and in most cases, if they can get away without purchasing it, you will find that most students will not purchase any.” Mason believes that schools, study abroad agencies and other organisations involved in language travel have a responsibility to make insurance compulsory for students. “Schools and organisations that send students abroad [should] make it a mandatory requirement to have adequate insurance coverage in place,” he explains. “Students will only realise how important it is when they find out how much it will cost them if they get sick!”
David Wood, Travel Account Manager in the Business Development Division at Endsleigh Insurance Services in the UK, reports that many schools and advisors involved in language travel believe that some students do not purchase an insurance policy at all. “A number of the institutions and organisations that we work alongside believe that not enough international students purchase insurance. You only need to look at the claims examples [see boxes] to see the potential exposure this could create for.”
This rather lacksadaisical attitude towards insurance on behalf of the students is borne out by research conducted by Wander Student Travel Insurance, based in the UK. The research revealed that one in five students surveyed had never taken out travel insurance cover, despite 67 per cent saying that they take between one and two holidays a year. Among those who do take out travel insurance, nearly 40 per cent said their parents made them. The research also showed that while 55 per cent of respondents said they always take out cover, 19 per cent indicated that they never do and 26 per cent that they sometimes purchase an insurance policy. While 33 per cent of students surveyed acknowledged that insurance was important, 30 per cent admitted to being too lazy to book travel insurance and a staggering 27 per cent said they didn’t think insurance was necessary.
“Students who travel without adequate cover put themselves at risk of facing hefty medical bills, should the worst happen while they are away,” says Claire McKinnon at Wander. “Something as simple as a broken arm can cost thousands in medical care and repatriation costs, which is a price few students can afford to pay.”
Wood points towards a trend of schools and agencies incorporating insurance within their study abroad packages. “A large proportion of our partners provide insurance as an element of the student’s course,” he reports. “The main driver for this is from a ‘duty of care’ perspective. Our partners are keen to provide this service to ensure the students have good cover in place.”
Insurance policies for study abroad students must cover them for several different eventualities. “Students have a different risk profile to the usual leisure traveller,” asserts Mason. “In most cases they are abroad for a longer term and thus will need benefits to match. It is also very important to have mental health benefits moving to a new country and studying abroad is a huge experience for anyone, and suffering from culture shock, homesickness and other mental health issues is very common.”
Insurance policies for students should cover medical expenses, accident indemnity, travel assistance, lost luggage, third party liability and trip cancellation, but it is important to check the polices offer adequate cover, warns Gillet. “If [students] go to a [different] country, the standard policies they might have with a local insurer in their home country [may] not meet the requirements for benefits and often have low insurance sums,” he claims. “In my opinion, the most important policy is the medical insurance with unlimited coverage and medical repatriation. Second, liability insurance is important. Many students do not have this insurance and have not even heard of it. But it is very useful and protects you from having to pay high amounts for claims and damages if you unintentionally damage property or injure a person.”
To ensure students have a targeted insurance product, Mondial Assistance UK launched Wander International Student Insurance in 2009. “Wander was created specifically for students,” explains McKinnon. “The whole ethos behind Wander and our insurance products is that the student can insure themselves for the relevant levels of cover they choose: bronze, silver, gold, winter or extreme sports, etc. The website look and feel is student it gives plenty of information and links to other relevant sites.”
Most claims received from international students are, according to Wood, for possessions, such as digital cameras or laptops as “these are most appealing to thieves and more prone to damage”. The second biggest claims they receive are for medical expenses if a student is in the UK for less than six months, for example, they would not necessarily be eligible for free treatment, and the third is for cancellation/curtailment of the trip.
Insurance companies are constantly tweaking their products to ensure they meet demand. Gillet reports that they change their policies according to amendments to legal regulations in certain countries or for visa applications, causing them to include new benefits or raise insured sums, for example. “We constantly check requests for changes or new benefits in our policies,” relates Gillet. “If there is a demand for such a policy, we adjust our standard products [or] we can adjust benefits and even clauses if an organisation has a specific demand or wish.”
Jean-Luc Guermont, CEO of Avi International in France, reports that they have added a delayed luggage insurance to all their products. “[This is] because we insure interns who fly to a country and take their intern position the next day. Without fresh clothes in the case of a delayed bag they do not start their internship in a good condition.”
Insurance is certainly an essential component of any language travel trip so it is imperative study travel advisors offer these products to their clients. As McKinnon concludes, “Travellers without adequate insurance will have to foot their own medical bills and the costs of flights home, which could run into thousands of pounds. With most students living on a budget, cutting costs on travel insurance could cost them more than they bargained for.”
“A 16-year-old girl was on a high school exchange programme in the USA and suffered a severe car accident. Although it seemed that the automobile insurance was responsible for the medical costs , we directly issued a letter of guarantee to the hospital for the hospitalisation from intensive care to the date of discharge. Then we arranged a plane ticket for the father so he could stay with his daughter, we also paid accommodation costs for him. When the student returned to Germany we paid for additional ticket costs for her and her father who accompanied her.”
René Gillet, Dr Walter GmbH, Germany
“A Japanese student fell off his bicycle and broke eight teeth. We paid for emergency dental and also restorative work for his teeth. Since it was the end of the academic year some work was done in the USA in the emergency room at a local hospital and with a local dentist and some after he was back home in Japan. The bike was [also] destroyed so we paid it back to the host family third party liability coverage.”
Jean-Luc Guermont, Avi International, France
“A student was studying abroad as part of their course. Whilst away they decided to spend their weekend at a local beach. Whilst there, the student [and others] was approached by two individuals who threatened and forced them to hand over their cash and belongings. Fearing for their safety, the student handed over the cash and belongings. They then reported the incident immediately to the police. Endsleigh settled their claim, reimbursing the student for the cash, mobile phone and camera that was stolen to the value of UK£163.47 (US$264). This allowed the student to continue their trip.”
David Wood, Endsleigh Insurance Services Ltd, UK
“We have seen an increase in the number of agents and language schools that would like to provide an insurance service to their students,” says David Wood at Endsleigh Insurance Services in the UK. “We believe one of the main reasons for this is the duty of care that they want to provide their students. Our partners also realise the benefit of offering such a service and agree that it makes the service or their school’s proposition both more appealing and indeed compelling when potential students compare their services against their competitors.”
Offering insurance products certainly is something all agencies should investigate, and increasingly insurance companies are looking to create partnerships with language travel agencies. Annabelle Franco at CareMed in Germany says that 92 per cent of their business comes through their partnerships with schools, universities and agencies, while Jean-Luc Guermont at Avi International in France reports that two-thirds of their business comes via agents. “We have about 450 agents in 45 countries. Our documentation is translated in 12 languages including Arabic, Chinese and Russian,” he relates. Avi International operates a special website for its agents, where they can log in, register students and print the insurance cards in their office.
Depending on volume, commissions can range from 10 to 30 per cent. Some agents prefer to buy net and mark up the price they sell to their own clients. Guermont adds, “Whenever a student wants to extend his or her policy we ask for [the] original policy number and then refer him/her to the original agent who booked the first policy. It is our way to make sure we do not under-quote our clients and also a nice way to say thank you for bringing us your business.”
Things to look out for
Getting the right insurance can be a minefield for students and although they may be tempted to opt for the cheapest cover this could mean having to pay a higher excess. It might also mean less cover for certain eventualities.
One of the main aspects to be covered is medical expenses. Check that the medical cover is adequate. The UK consumer advocacy organisation, Which?, recommends travel insurance that covers at least UK£2million (US$3.27 million) of medical costs in Europe and UK£5 million (US$8.1 million) for the rest of the world. This may seem like an absurdly high amount of money but not when you consider how much medical costs can be. The student may also need to be brought back home from their destination country for medical reasons, so check that this aspect is covered in the insurance. Students should be reminded that the insurer should be informed of any pre-existing medical conditions.
If a student is planning to work in their chosen study destination, they should tell the insurance company before departure, and should check that they will be covered for this as some policies require the policyholder to take out an additional cover for working overseas and volunteer work.
The insurance package should also cover for lost or stolen baggage and possessions, and Which? recommends a coverage of at least UK£1,500 (US$2,459) for this. Most insurance polices will limit the amount claimable for individual items to between UK£200 (US$328) and UK£500 (US$807) per item.
Which? also recommends an insurance policy that offers cancellation and curtailment cover of at least UK£3,000 (US$4,840), and personal liability cover at of least UK£1 million (US$1.6 million).