Travel Insurance: Putting Profit First

According to experts, insurance premium paid for a tour is very small in relation to the total tour cost. But, this is considered an important step when travellers meet unlucky incidents during their journey. However, for years, travel companies disregard the role of this insurance.

 

In case bad luck happens, most tour guides or persons in charge of the tour only pay lip service to unlucky tourists to “draw experience”, not remind their customers or keep medical service statements of customers for their customers to claim compensations. In reality, if customers forget to ask tour operators for the insurance, they will deliberately skip it. Many travellers have complained about this. In many cases the value of insurance coverage is humble but settlement procedures are time-consuming and unprofessional.

 

Representatives of some major local travel firms said the Law on Tourism provides that travel insurance is not compulsory for domestic tourists. Thus, many tour companies and tourists make light of travel insurance. But foreign tourists consider travel insurance the most important belongings when go on holidays abroad. Travel insurance policies are as important as their passports.

 

Currently, domestic tours are usually short; thus, both operators and travellers belittle insurance. When travellers choose tours, they mainly care for prices, not the degree of safety and risk aversion during their journey. Not fully understanding their long-term benefits, travellers often ignore their own interests.

 

Even compulsory insurance for outbound tours, most travellers see this as a procedure of the journey. A very few people understand that this is one of their interests, thus they do not know the insurance coverage, claim procedures, and interests. Many travel companies said most tourists are uninterested in insurance policies. Meanwhile, travel companies only write “insured” on tourist profiles, specifying the degree of coverage. When the competition is very fierce as now, price reduction is the top priority to attract customers. More expanses will make tours more expensive. Therefore, not many travel firms are interested in this form of insurance.

 

Mr Phung Tan Loc, General Secretary of Vietnam Insurance Association, said: "The tourism sector served more than 4.5 million international tourists, more than 15 million domestic tourists and 3 million domestic tourists with outbound tours in 2010 but the travel insurance market was very modest. Up to 95 percent of travellers served by Vietnamese travel firms were not insured. Currently, the travel insurance premium is very small now, particularly just VND1,500 for domestic tourist and US$1.5 for a foreign tourist. This value actually does not affect tour prices.

 

Nonetheless, the Law on Tourism lacks specific sanctions to penalise violators. Travel insurance is not considered obligation of travel companies but a choice or value-added service for customers.