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the hidden costs of ‘free’ travel insurance policies (from Ha’aretz)

 

Haaretz put out a great article about the buying insurance when going abroad:

The hidden costs of ‘free’ travel insurance policies

Nobody wants to think about ending their vacation in the hospital. That may be why, unlike car, health and life insurance, travel insurance is usually a last-minute affair.

By Rina Rozenberg

Nobody wants to think about ending their vacation in the hospital. That may be why, unlike car, health and life insurance, which most people investigate thoroughly before choosing a provider – consulting with friends and experts, comparing prices, even (shudder) reading the policies – travel insurance is usually a last-minute affair, arranged in between packing your bags and checking the weather forecast at your destination.

Another reason people take travel insurance so casually could be that it’s relatively inexpensive. Somebody offers you a policy with your ticket, or you get it through your credit card. Roughly half the travel insurance policies in Israel are issued by the country’s health maintenance organizations, the kupot holim, according to estimates by industry insiders. Most of the rest are from credit card companies and travel agencies, while actual insurance agents are believed to control only 10% of the market.

The price differences among these sources are negligible. But when it comes to coverage the differences are significant, making it important for travelers to do a little homework before setting out for the airport.

1 Don’t make do with the free coverage provided by your credit card issuer. It may not cover the cost of hospitalization.

The credit card companies do not charge customers for basic travel coverage, and in some cases it is automatic; the customer doesn’t even need to contact the company for it to kick in. The problem is that free policies tend to have more constraints and limitations than policies you pay for. Any serious injury or illness requiring surgery or protracted hospitalization will probably leave the policy holder owing huge sums to the overseas hospital.

That’s because they do not provide for full reimbursement. Free policies issued by the credit card companies set a cap on daily hospitalization and other costs, while policies that cost money generally cover more.

For instance, the Visa Cal credit card company will pay up to $450,000 for hospitalization and other medical costs, but has a $2,000-per-day limit on hospitalization reimbursement. If your medical care costs more per day (or in total ), you are responsible for the balance. Isracard has the same daily cap. Leumi Card’s is lower, at $1,350 a day. Sources in the insurance sector say hospitals in Europe and the United States charge at least $3,000 a day.

The credit card companies do offer policy upgrades – for a fee, of course.

2 Do you have high blood pressure, heart disease or some other preexisting condition, chronic or otherwise? You may need special coverage as part of your travel insurance.

A preexisting medical condition is a “medical condition for which the policy holder received drug treatment, medical care or hospitalization in the six months before the trip,” says Michal Weiner, head of the medical-insurance and personal accident department at AIG Israel. If you travel abroad without coverage for a preexisting medical condition that causes you trouble you will wind up footing the entire cost of care yourself, she warns.

The credit card companies’ basic, free policies do not provide this coverage; you can get it, but you have to pay.

Anyone with a chronic condition such as asthma, slipped disc, heart disease or diabetes – even if the condition is stable – should think about this carefully.

Of the kupot holim, Leumit and Maccabi each offers a one-size-fits-all travel insurance policy that cover preexisting conditions. Clalit and Meuhedet both offer riders, supplemental insurance, at a reasonable per diem rate.

3 Even if you bought an insurance policy through your health care fund, it isn’t the actual insurer, and the actual insurance company won’t be aware of your medical condition. You should advise your insurance agent accordingly.

A few months ago the insurance commissioner at the Finance Ministry, Oded Sarig, issued a draft clarification on medical insurance policies sold by insurance agents, which for the purposes of this article include the health-care funds.

One of the reasons for his paper was that, as Sarig noted, a health-care fund member could mistakenly think that when they purchase travel insurance from their health care provider, the policy is tailored to their medical profile. That’s a big mistake.

“The policy holder figures the health-care provider knows them thoroughly and checked their medical records before offering the policy, but it isn’t so,” says Yaron Baron, sales manager at the DavidShield insurance agency. “The kupat holim is serving as a marketing channel. Clal Insurance or Harel is providing the actual insurance.”

4 Usually a $500,000 policy is adequate. All travel insurance policies have a coverage ceiling of between $500,000 to $1 million; the truth is that the number usually doesn’t matter much.

“In most cases the coverage offered by medical and hospitalization policies is high enough,” says Baron, even though his agency offers PassportCard, with coverage of up to a million dollars. He thinks the number is mainly a marketing gimmick: He says he cannot recall a single case of a traveler needing more than $500,000, the lowest ceiling of any Israel travel insurance policy.

That does not mean that such cases do not exist, of course. Gabi Nakibly, VP marketing and sales at Clal Health Insurance, recalls the case of a customer who collapsed while in the United States and ended up in the hospital for 10 weeks. The bills came to $2 million. “Since we have working relations with hospitals, we managed to get the bill reduced,” Nakibly says, adding, “But that was an extreme case.”

5 Tailor your policy to your trip. If you’re going to spend your vacation mountain-biking on single-track trails skirting deep gorges, white-water rafting or doing some other extreme sport, do mention it to your insurance agent so you can purchase appropriate coverage. If you’re taking along expensive equipment mention that too, and find out how to get it insured as well.

Note that standard baggage insurance also has a cap, usually $1,000 per piece but sometimes as much as $3,000.

If you’re taking expensive items, such as a laptop, gold jewelry or a smartphone, you’ll need extended coverage.

6 Make sure your travel insurance picks up the cost of flying you back to Israel for medical care, if necessary. It will raise your premium for your entire trip by about $15 at Meuhedet, for instance.

7 No matter what insurance policy you buy, there will be co-payments: You will pay part of the bill. How much depends on the policy and the issuer.

And one other thing. Make sure to hold onto all your receipts; without them your insurer won’t reimburse a single cent.

how to get an extra ₪ 1000 out of your next vacation

It’s almost that time again.  Pretty soon we’ll be rolling in dmei havrah and planning our getaways.  Last year around this time I discussed how to save ₪ 1000 on your next vacation.  Now I’d like to discuss the flip side – how to get an extra ₪ 1000 out of your vacation.

#1 – Plan, but be flexible.  I love planning trips.  I enjoy going through the municipality’s website, reading blogs for ideas, building an itinerary and then googling for coupons (just type in the attraction, hotel, tzimer or resteraunt and the word “קופון” – you’ll be surprised how much you’ll find).  But despite best efforts, life happens and it becomes necessary to play it by ear.  Sometimes a new interest pokes its head; maybe the planned idea just isn’t working out.  No matter what, the best thing is to not take it personally and be open to alternatives.  Try to make a mental list of the things you want to do and set a priority.  Then when you’re running late, it won’t be such a big deal to strike a less important activity from the list and enjoy your vacation.  Speaking of which…

#2 – Remember what you’re buying.  A vacation is a purchase like any other, only you are buying an experience, not a thing.  And it is very important to remember this.  Getting frustrated and yelling can ruin an otherwise wonderful trip.  On the other hand, letting little things go and planning time to relax can pay off immensely.  Last year, I woke up and found a long line of ants in the bathroom of our tzimmer, leading up the area where my wife and I left our toothbrushes.  I could have freaked out, called a manager and probably have even debated a discount on the room at that point.  But at what cost?  My wife would be freaked out and have horrible memories of what should be a wonderful vacation, just because of a few ants.  So I took some tissues, spent a minute cleaning up the ants and, on our way out for the day’s activities, I kindly explained the situation to the woman in charge and asked her to spray while we were out.  When we got back, the room was spotless, the bathroom was fixed up and the woman in charge went out of her way to help us in any way possible for the remainder of the trip (the managers are used to people freaking over small things like this, they appreciate people who are a bit more understanding.)

#3 – Take pictures – People need tangible objects to appreciate the intangible.  This is why beauty parlors leave out beauty magazines in their shops and other service providers give out small trinkets to remember them by.  And now that we live in the age of digital pictures, taking pictures is a one time expense with no marginal cost per picture (or roll of film).  So take a bunch of pictures and spend some time after the trip to go over the pictures and take in and appreciate what you saw and did.

#4 – Save marginally – You can still stretch a dollar on a trip.  Last year, as I was getting ready to order a cab from Zichron Yaakov to Binyamina and later Ramat HaNadiv, my wife decided to text Egged and see if there was a bus that could take us instead.  She found a bus that took us to exactly where we needed to go, within ten minutes.  Over the course of the trip, her tactics saved us about ₪ 250.

#5 – Spend marginally – At the end of one of our trips my wife and I were expecting to go horseback riding with what we though was going to be a few couples at a ranch by Netanya.  Unfortunately, when we arrived, it turned out we would be riding with a large group of around 30 rowdy teenage guys.  Marginally, I had the option of our payment by ₪ 150 for a private tour with just the instructor, my wife and myself.  Considering (1) my wife just saved us a ton so money by avoiding the cabs and much more importantly (2) the current situation would have been a horrible experience for my wife and would have been a waste of the money we were already paying, I gave the rancher the extra money and my wife and I had a wonderful time.

#6 – Take advantages of your surroundings and make your own activities – Try to find those spots that are not “anytown” Israel and make due with the local flavor.  The last time my family visited, we made a picnic in the Old City of Tzfat with some local cheese (we finally found it!), olives, and grape leaves.  And really, is there any meal more Tzfaty?

Have a great vacation season.

By the way, if you’re looking for some ideas of what do in Israel this is a map I made of places I have been (in blue) and places I want to go to (in yellow).  I left out Jerusalem because simply put, Jerusalem has too much to offer and cannot fit on a simple map.

Please feel free to add to the map if you like.  Also, if you have any questions or want any recommendations on where I have been, feel free to e-mail me at jonnydegani@gmail.com

how to save ₪ 1000 on your next vacation

I personally believe that there is no better place to vacation than Israel.  There is so much natural beauty and so much to experience.  But vacations can get expensive and sometimes so much so that it seems impossible to arrange within a budget.  Here are some tips to save on the various expenses that are part of a vacation:

#1 –Bargain on the price of the hotel room.  As westerners, we are averse to bargaining, but Israelis are not.  Ask for a discount, tell them your budget and see what they’ll do.  When I recently booked a room I asked for a further discount and was immediately presented with (1) an upgrade for ₪ 100 less and (2) a coupon book for all the kosher restaurants in the area.  This is what happens when you just ask.

#2 – Consider a tzimmer.  This is by far the biggest secret for vacationing in Israel.  A tzimmer is really just a hotel with a jacuzzi in it.  Some of them are private cabins and some are virtually identical to hotels, but almost all of them are cheaper than most hotel rooms.  Generally, a tzimmer is a bit fancier, more elegant, and offers spa treatments (which are optional and often overpriced) but because most tourists have never heard of a tzimmer, the supply remains up, the demand is low and as a result, so is the price.  Check out places like www.zimmer.co.il for tzimmer listings.

#3 – Have at least one picnic a day instead of eating out every meal.  It is nicer, probably healthier and much cheaper. And don’t worry about shlepping food everywhere; odds are there is a supermarket in whatever city or town you are going to.  That being said…

#4 – Limit eating out to once a day.  Eating out is usually the biggest expense aside from the hotel.  Do you need a fancy restaurant in the morning?  Why not go to the local bakery and get some fresh bread and some cheese at the makolet.  This can save you literally ₪ 100 a meal.

#5 – Hike. Israel is a country of hiking.  Almost every area in this country has fun and inexpensive trips available.  Check out sites like www.tiuli.com for some really fantastic trips are either free or cost very little.

#6 – Be your own tour guide. There is so much information on the internet that is so easy to find.  Have different members of the family learn about different areas beforehand.  Share and talk about things together.  This will not only save you money, but make the trip much more memorable and personal.

#7 – Take the bus. Okay, probably not the most romantic idea, but it can be a huge money saver.  On my upcoming trip I weighed two options, renting a car and using the bus to get the main destination and from these using cabs.  I called up the local cab companies in the vacation area and asked the prices of the trips I want to take (add ₪ 15 to whatever they say to be safe).  Turns out I can save nearly ₪ 500 by not renting a car.  It is just one bus each way and some cabs – not a bad tradeoff at all.

#8 – Bargain on luxuries.  Remember that whenever you are going to buy a souvenir or something nice you can always bargain.  On trips, I do not want to get into aggressive bargaining, but I have saved a few hundred shekels by just politely asking for a discount.