A spokesperson from the General Insurance Association of Singapore (GIA) said that travellers are “strongly encouraged” to understand the policy terms and conditions, exclusions as well as benefits of the travel insurance they purchase before their trip.

“This is especially for higher risk activities, which may be excluded from a basic travel insurance policy. Depending on the insurer, an extended cover may need to be purchased to cover these activities,” said the spokesperson.

The type and range of adventurous or sporting activities covered also differs among insurers, the spokesperson added. 

For instance, insurer A may cover for scuba diving up to 30m depth, while insurer B may cover for up to 20m depth.

“Each insurer will stipulate the activities covered and its exclusions, and individuals are encouraged to compare policies to purchase one that meets their needs,” said the spokesperson, adding that the type and range of cover, policy terms and exclusions are commercial decisions made by each insurer. 

Travellers looking to engage in higher risk activities should review their policy to ensure that these activities are covered under medical expenses, accidental death, and permanent disability, said the GIA spokesperson.

In addition, they are also encouraged to purchase policies that cover for personal liability relating to these higher risk activities in case of any injury or damage caused to others as these may also add up to substantial amounts, the spokesperson added. 

Those who require more coverage can also purchase personal accident insurance to supplement their travel insurance benefits.

Yet, there are gaps that need to be addressed given that the area of adventure tourism is “still rather new”, noted Assoc Prof Lau.

There are still limitations pertaining to the types of activities that can be covered, he said.

These include the types of pre-existing medical conditions that prevent coverage, types of adventure gears and equipment that needs to be certified and geographical coverage, according to Assoc Prof Lau.

“Some insurers are apprehensive to cover activities such as high-altitude tracking (beyond certain height) or independent travel without being accompanied by an experienced (and licensed) guide,” he added.

“On this premise, insurance providers need to be innovative and keep up with the demand and changes in tourism trends.”

The main reasons why there are limitations to the type of activities covered under insurance policy are to reduce the insurer’s liability and to make the premium affordable for most travellers, said Associate Professor Chen Renbao from NUS.

“If the traveller takes risky activities within the travel period, the policyholders normally need to pay an additional premium and this policy only covers the activities indicated in the policy, or those activities normally excluded in the policy,” said Assoc Prof Chen, who is from the department of finance. 

He also added that travel insurance normally only covers travel-related risks such as travel accidents, plane delays or loss of luggage. “Most travellers do not take part in risky activities during their travel and keep their premiums low,” he said. 

However, Assoc Prof Chen noted that the demand for insurances that cover adventurous activities will increase as people become more interested in these types of activities. 

On whether this calls for a specialised travel insurance policy targeted at adventurous activities, Assoc Prof Chen said that insurance companies should come up with such policies to meet people’s needs.

But insurers also need to use available data to price these policies well to reflect the underlying loss distribution, he noted. This means to use data from past years to estimate the probability of an accident happening and the average amount of loss that will occur should an accident happen.

“What could be the benefits of having such a policy? Well-designed travel insurance policy will provide both needed coverage for travellers of taking risky activities in case of injuries or even death.

“This will reduce the financial burden faced by the policyholder and his or her beneficiary. At the same time, insurers will have the needed business and have market competitive advantages,” added Assoc Prof Chen.

Likewise, Assoc Prof Lau from SUSS agreed that insurance providers should start to look into specialised adventurous activities to be covered.

This way, clients may benefit by paying lesser premiums compared to an insurance that covers a wide range of high risk activities that one may not be interested to participate in, he added. 

“This will reduce the cost for the clients and make the products more appealing and also increase the take-up rate by prospective adventure tourists,” said Assoc Prof Lau.

“In the long run, this will further encourage the adventure tourism sector to grow faster as more people are more willing to embark (on) such tourism options with the knowledge that they are protected – to a certain extent – with specialised insurance.”