Travel Insurance

Important Financial Steps to Take Following an Accident Overseas

A medical emergency can be especially scary if it happens while travelling. Getting the right care is critical, but what can you do to minimize the financial costs?

Many may be worried about what to do if they become the victim of an accident while travelling. Experiencing a serious accident itself can be harrowing enough, but the subsequent financial ramifications can contribute to continued stress even well after one is back to normal. Whether one gets into a car accident, contracts a life-threatening illness or gets injured during an activity, there are several things one can do to minimise the associated costs. Below, we discuss important financial steps to take in the event of an accident while travelling abroad.

Document and Report Everything

Depending on the severity of the accident, try to get as much information as possible at the scene. For example, if it's a mild accident such as a fender bender, take photos of the accident and save copies of any receipts, itinerary, medical bills or correspondence with one's insurer. If an accident is severe and one wakes up in the hospital, one can request a police report. Having adequate proof of what happened during the accident will decrease the risk of a claim getting rejected. Additionally, if the accident involves a third party who will be pursuing legal action, having adequate proof can help one's case and may ease the litigation process. Finally, as soon as possible, one should call one's insurer to let them know of the incident and follow their directions on next steps to take.

Pay Off Related Expenses ASAP

To prevent an accident from becoming a long-term financial burden, try to pay off accident-related costs as soon as possible, especially if they were charged to a credit card. Hopefully one's travel insurer processes claims quickly, but in the event it takes several months to process or a claim ends up getting denied, it's important to avoid only paying the minimum requirement on accumulated bills. Since some countries have exorbitant medical fees (like the United States), it can be tempting to put those costs on the backburner or wait in hopes of a claim payout. However, this can wreak havoc on one's credit card bill since interest can accumulate quite quickly and exacerbate one's debt burden.

This graph shows cost of hospital stay by country.

Take Steps to Minimise Post-accident Domestic Healthcare Expenses

If one needs follow-up healthcare after an overseas accident, hopefully one's health insurance plan is comprehensive enough to cover it. However, if it's not and one is still stuck with a hospital bill, one can consider several things to minimize the cost. First, negotiating a bill can help reduce some of the cost as hospitals tend to prefer upfront payments to monthly payments (or none at all). Second, if one doesn't have enough for a lump sum payment, one can explore whether a hospital offers a 0% interest repayment plan. That way, one can pay what one can afford each month and not run the risk of racking up a lot of interest.

Responsible Considerations for Your Next Trip: Emergency Funds & Travel Insurance

One of the most important things to keep in mind when travelling is to have an emergency fund. While it may take somewhat longer to save enough for a trip, such a fund will prevent a situation where one can't afford medical, litigation or repatriation expenses. Saving only enough for the trip means one risks coming up short following a possible accident that requires payment for medical or litigation costs upfront.

For those who may be worried about getting in an accident while travelling, travel insurance can be an extremely beneficial asset. The hundreds of rupees you will pay for protection could save you an exorbitant amount of money in the event of an emergency. When shopping for policies, it's important to consider one's specific itinerary. For instance, certain policies may cover a rental car if driving is a part of the itinerary. If one plans on participating in sports, certain insurers may cover bodily injuries or damage to equipment that may occur during such activities. Last, if one travels often enough, a long-term plan could be the right move. Requiring only one payment upfront, such plans provide coverage for many trips over time.

Dan Grossman

Dan is a Senior Research Analyst at ValueChampion India, focusing on credit cards. He holds a B.S. in Mathematics & Economics from the University of Michigan, and previously worked in the financial services industry at Capital One and Moelis & Company.