Self-drive rental protection: Peace of mind for every journey

Self-drive holidays are now very popular among Hong Kong travellers. People love the freedom to explore places at their own pace. In Japan, spots like Hokkaido, Okinawa, and the area around Mount Fuji are top choices for road trips. However, several recent car accidents overseas involving Hong Kong drivers remind us of the risks. 

Even if you are an experienced driver in Hong Kong, you need to be very careful in a new country. Traffic rules, driving cultures, and road conditions are different everywhere. You may face unfamiliar speed limits, driving on the other side of the road, sharp mountain bends, or wild animals suddenly running onto the road. In winter, icy roads, thick snow, and low visibility make driving even more dangerous.

If you have an accident abroad, the total cost is often much higher than basic medical expenses. Take Mr. Wong as an example. He went on a self-drive trip to Japan with his family. While driving near Mount Fuji, his car hit a streetlamp. The rental car was damaged, and he and his family were injured and sent to hospital, which forced them to stop their trip and fly back to Hong Kong early. On top of medical expenses, they lost money on prepaid meals and theme park tickets they could not use while staying in hospital. The rental company also charged a "Rental Car Excess" for the damages, plus an "Returning a Rental Vehicle" penalty because Mr. Wong was injured and could not return the car himself. 

Luckily, Mr. Wong bought a family Travel Insurance plan with rental car cover. The insurance company paid back around HK$50,000 for medical expenses, trip interruption, and rental car cover under the policy. This took away a huge financial load so his family could focus on getting better. 

Most insurers also offer a 24-hour world travel emergency assistance hotline. If something goes wrong, you can call them right away for urgent help, such as medical transport back to Hong Kong.

A recent strong earthquake in Kumamoto, Japan, made many travellers worry about their upcoming trips. Since Japan is so popular with Hong Kong tourists, many people with booked flights and hotels felt unsafe and wondered if they should still go. 

To give travellers more options, some insurance companies now offer "Cancellation of Journey for Any Reason" protection. With this cover, if you cancel your trip for personal reasons, such as fear of earthquakes, sudden work, or family matters, you can get back part of your prepaid money. For instance, Mrs. Chan booked a 5-day trip to Fukuoka with her husband. She was worried about the nearby Kumamoto earthquake, so she decided to cancel. She had spent HK$20,000 on non-refundable flights, hotels, transport tickets, and concert passes. After applying the 50% policy excess, she got back HK$10,000.

If a serious earthquake happens within 7 days before your trip and forces you to cancel, Travel Insurance usually covers your non-refundable costs. What if an earthquake or typhoon hits after you arrive and delays your return flight past your policy end date? You do not need to buy a new policy. Most travel plans have an "Automatic Extension of Cover" that gives you 10 to 14 days of extra protection for free to cover extra hotel and transport costs. To minimise your risk from natural disasters, secure your Travel Insurance right after you book your flights and hotels. Most policies cover unexpected events starting up to 30 days before your departure, so buying early gives you the best protection.

If you travel 3 or more times a year, consider getting an Annual Travel Insurance policy. Whether you take a quick day trip to Shenzhen or a long 90-day holiday, an annual plan covers an unlimited number of trips all year long for overseas medical expenses, accidents, and lost luggage, giving you total peace of mind whenever you travel.

This Chinese version of this article was published in the Hong Kong Economics Journal 

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