Domestic travel insurance – is it worth it?

From Beirut to Bloemfontein, there is no escaping one simple fact: emergencies can – and do – happen anywhere. Luggage can be lost, ankles broken and trips cancelled. While most corporates have realised the importance of international travel insurance and adhere to strict duty-of-care policies, domestic insurance is not always a priority. Liesl Venter finds out more.

When a business traveller hits the road, they need specific protection – making for an easy enough rule of thumb for any corporate sending employees out into the big wide world.

No, says Simmy Micheli, manager – sales and marketing at Travel Insurance Consultants (TIC), it’s not that simple. While corporates have a duty of care towards business travellers and insurance is always advised, there is no ‘one size fits all’ insurance for international and domestic travel.

“There are very different issues at play when business employees are travelling locally than when abroad,” she says.

Add to this that the domestic business travel insurance industry is still very new; it is not as common a practice as one might think.

“Domestic business travel insurance is still in its infancy having only been on the market for a couple of years,” says Micheli. “But it is a sector that is growing fast.

More and more corporates are realising the value of domestic travel insurance and understanding that employees are as much at risk locally as they are internationally even though the risk might be very different.”

According to Micheli, at least 50% of corporates purchasing TIC’s annual corporate policy are opting for the inclusion of cover for local journeys.

Greg Dillon, executive: business development at Price Forbes, agrees, saying corporates are becoming more aware of the need for domestic travel insurance and taking advice about purchasing this type of insurance.


Domestic vs international

Travel, says Micheli, always involves risk. “This applies as much to local trips as to journeys abroad. The package offered locally, however, is slightly different to that available to international travellers.”

This is due to the fact that, locally, personal insurance and cover remains in place in the event of an incident, while this is not necessarily the case when travelling abroad.

Explains Micheli: “If an employee is travelling abroad and is injured in a car accident and hospitalised, typically the travel insurance would reimburse the hospital for the costs incurred. Locally, though, that would not be the case as the medical aid of the employee would be covering the hospital costs.”

Many locals who travel for business often also have their own business travel cover in place, she adds.

“A local journey is defined as a trip by air, road or rail within South Africa that is in excess of 200km of the employee’s residence or place of work. It begins when they depart from either home or work and continues either until their return or up to a maximum of 45 days,” says Micheli.

Travel insurance protects the financial investment in a trip. This is often the reason why corporates are far quicker on the uptake for international travel as the investment is simply so much higher. Dealing with the aftermath of lost baggage or cancelled trips from a local perspective is often less hassle and cost and therefore not always a priority to insure against.

“There is, however, an increasingly better understanding of the risks of local travel and the importance of having the right cover in place to protect not only the employee but the company against it,” says Micheli. 

She advises local travellers to work closely with travel buyers in corporates to ensure they understand what existing cover a traveller has when taking a domestic trip. “Buying cover for general risk such as lost baggage, cancellation and car rental excess is just as important in the local environment as it is internationally,” she says.

Also important to consider when purchasing local insurance is to cover for medical transportation and evacuation as well as burial expenses.

According to Micheli, domestic travel insurance allows for a daily hospital cash benefit for every day the employee is hospitalised while on the journey, but it will not cover the medical costs of travellers.

She says from an international travel perspective, covering against the financial losses of a failed trip, ensuring employees are medically insured and having insurance in place to address major risk, such as terrorism attacks, is important. Local travellers are best insured against trip cancellations and delays, lost and stolen luggage as well as car accidents.

“The benefit of travel insurance, for local or abroad, far outweighs the risk of not having it in place,” says Micheli.