With endless possibilities now open to travellers, the world has become accessible in ways that were once unimaginable. This can make planning your next getaway an exhilarating experience, so the last thing you want to think about is how it might go off the rails. But as the old adage goes, you’ve got to hope for the best and plan for the worst – especially if you’re in the high-net-worth category.
You’re probably familiar with basic travel insurance policies which cover things like cancellations, medical expenses and loss of – or damage to – your property. But this may not be enough. Most high-net-worth people have a more complicated lifestyle, which can make them susceptible to greater financial loss. Here are a few ways you can protect yourself, your family and your personal property by using a bit of travel smarts and ensuring your policy has got you covered.
The more devices connected to a single household and the greater the number of family, staff and advisors that you communicate with, the greater your risk of becoming a victim of cybercrime. “As hackers and cybercrime increase, the high-net-worth are going to become more of a target,” warns Kurt Thoennessen, vice president of Ericson Insurance Advisors.
Some insurance providers are starting to offer protection for losses due to cybertheft, but it’s a good idea to be conservative about what information you share through electronic devices, whom you share it with and how often you communicate. Never share banking information or passwords this way.
You should also restrict the level of detail you share with people on your social media accounts about your travel plans. You may want to think twice before posting that pic of the plane bound for Fiji, letting everyone know you’ll be gone for two weeks. It doesn’t take much for cyberstalkers to figure out where you live or get other details about your lifestyle and income. You can start by adjusting the privacy settings on your media accounts so that only select people can see what you post – not everyone who comes across your profile.
When using technology abroad you should know that, in some countries, every time you log on to your computer you’re on a government network – and nothing is private. This is currently the case with China. So, if you’re a business traveller with sensitive information on your laptop, know that it could be scrutinized by a government agent. The same is true with your cell phone. Using a VPN (virtual private network) isn’t a guarantee that you’ll be fine. If you’re particularly concerned, you can travel with a separate laptop or smartphone loaded with just the information you need for that particular trip.
2. Property protection
With more frequent catastrophic weather worldwide comes an increased chance of damage to your vacation home. Flooding and wildfires have become more common in recent years and are expected to continue to rise. Your financial planner can work with you and an insurance provider to assess your risk and ensure you’ve got sufficient coverage.
Don’t forget to protect your primary residence as well while travelling. Consult with a security expert who can help secure your home without making it feel like Fort Knox. They can devise a home protection plan that uses as much or as little technology as you’re comfortable with. But don’t underestimate the value of having a family member, friend or neighbour keep an eye on things for you as well. According to AS Solution, a provider of international protection services, the most important factor in effective security is people. When protective security succeeds in averting a breach it’s often because people did the right things, in the right way, and at the right time. This means having qualified professionals install and monitor the right systems, and having a neighbour or someone you trust keep an eye on things and report anything suspicious in your absence.
3. Know where to go
If you’re up for a really authentic travel experience (who doesn’t like to hit upon a local gem?), do your research beforehand and know which areas are safe and which are not. The U.S.-based security consulting firm TorchStone advises that you consult with a travel company that knows what the current conditions really are. It also helps to speak with friends who have been to your destination. While there, avoid drawing too much attention by wearing flashy jewellery, stay in populated areas and use the local currency rather than American dollars. Your debit or credit card can be stolen or scanned even when in a protective radio frequency ID sleeve, so leave these in your hotel room safe and stick to using the hotel ATM only.
If you need ground transportation, familiarize yourself with local traffic laws before deciding to drive yourself. In some countries, you could be found criminally liable for a relatively small incident like a minor traffic accident. If hiring a driver, use a trusted, vetted source that’s very familiar with the area and well trained.
4. Extended travel protection insurance
A typical travel insurance policy will cover things like cancellation insurance, emergency medical or dental procedures, and loss of luggage or theft. But for some high-net-worth travellers, this one-size-fits-all approach may not be enough.
A Globe and Mail article published in 2017 notes that kidnapping and ransom demands are more common than you might think – and don’t necessarily apply to high-net-worth people alone. When I mentioned to a colleague that I was writing this article, he told me that he’d once been physically forced to withdraw money from an ATM while on a trip abroad.
You might be surprised to learn that your insurance policy can cover not only a ransom payment but also the crisis management team of specialists to negotiate the release of a loved one, as well as the resulting psychiatric care or loss of income that would follow such an event. You can also get coverage for boat, bus or aircraft hijacking, as well as car-jacking of your personal or rented vehicle.
Think this sounds overly cautious? Maybe. But ransom payments are a popular source of revenue in places like Mexico and other Latin American countries, the Middle East and some African nations such as Nigeria and South Africa. It may be more difficult to get coverage for countries such as Syria, Iran or Afghanistan where advisories against all travel are often in effect. Before you start planning, check out Travel Advice and Advisories, the Government of Canada’s official source of destination-specific travel information.
If you’re into high-risk activities like skydiving in Scandinavia or tiger-watching in Thailand, you could be refused medical coverage if you suffer an injury while participating. Though a worldwide disability policy will protect you to some extent, you may want to spend a little extra on a short-term policy in addition to this, to cover extreme events.
Our comfort level with risk has a lot to do with what we’ve got and what we can stand to lose. By all means do not spiral into a state of planning paralysis, rather, take a mindful approach to protecting yourself from reasonable travel-related risks. If you’re struggling to get some perspective on the matter, a conversation with a trusted financial expert who understands your total financial picture can help you discern what’s in your best interest. Your job, after all, is to just have fun.
Lucy Conte, Strategies editor in chief
This article was published in T.E. Wealth’s Strategies newsletter, September 2018 edition. Read the full edition here.