GENERIC:
Which Travel Insurance Should I Have?
This is a practical review of which Travel Insurance is best for the long-term / expatriate traveller.
The short answer is that, for those planning to travel for more than 2 years, I recommend that you look at World Nomads.
For those people from the UK, Australia, or New Zealand who are travelling overseas for less than 2 years, Down Under is also worth a look.
For those planning to travel for less than 1 year, Southern Cross are also worth a look.
For the detail, read on.
My Summary:
If you plan to travel overseas for more than 12 months, make sure that you are properly covered. Most Travel Insurance policies require:
- You to take out insurance before you leave your home country (which means that you won’t be able to renew your insurance whilst you are still overseas in year 2 of your trip)
- Your journey to start and end in your home country (which is not the case if you plan to travel for more than one year – so, effectively, the insurance cover is null and void)
After reading the online independent reviews and pulling out all of the ‘high level’ policy coverage information, I selected my preferred insurers and policies… only to find that, when I got into the policy wording detail, I could NOT really insure with them because I could not renew for the second (and subsequent) year whilst still overseas. Either I just couldn’t do it or I had to buy a different (and much more expensive) policy.
The Southern Cross TravelCare policy, for instance, was $610 in year 1 but for year 2 I had to switch to their Working Overseas policy at a cost of over $2,000 for equivalent cover. Similarly, the Downunder Comprehensive policy was only renewable one time to a maximum of 24 months in total.
I needed to find an insurer who specialised in Expatriate / Long-term / OE insurance… In the end, I chose the World Nomads Explorer plan:
- It met my requirements;
- I can buy it online (even if I am already travelling);
- They will insure me even if I just have a one-way ticket and have no idea where I am ultimately going;
- I can extend my cover whilst I am still travelling;
- I think that, for me, it’s the best value for money.
If I had been planning to return home back to NZ within 12 months, I would have chosen the Southern Cross TravelCare plan.
My Insurance Requirements:
CANSTAR do a pretty decent review of Travel Insurance for New Zealanders but it focuses is on Holiday Makers rather than Expatriate / Long-term Travellers who are overseas for more than one year. The Expat has to look beyond such reviews and interpret the information in their own way…
I don’t really care about things like flight delays… I am on an extended holiday anyway… I’ll just stay another day or two…
I don’t really care about stolen cash, stolen goods, etc… I am not taking anything of much real value and everything that I am taking is easily replaced… even my passport (should I lose it)…
I only really care about 2 things:
- My Health;
- My Personal Indemnity.
For me, these are by far my major threats. This type of insurance is known as Medical & Personal Indemnity Insurance.
The cost of medical evacuations from the United States, for example, reportedly starts at US$75,000 and often rises to US$300,000 or more. Even medical evacuations from relatively local (to NZ) destinations like the Pacific Islands have been known to exceed US$75,000.
My other requirements are:
- I need a policy that allows me to be overseas for more than one year;
- I need to be able to renew my policy for another year whilst I am still overseas.
My Investigations:
My investigations determined that:
- Your country of residence influences cost (presumably because the Health System in your own country determines the insurer’s own exposure to cost – if the insurer can fly you home to a good National Health System then all the better for them)
- Your insurance premium goes up if you are going to the USA (presumably due to the high medical costs in the USA)
- Medical & Indemnity Insurance is, effectively, a subset of Travel Insurance
- Policies offered by Medical Specialists (like the Southern Cross in New Zealand) compare surprisingly well with Backpacker Insurance specialists
My Comparisons:
I have already “culled” out providers whose costs are over NZ$1,200.
My Travel Insurance Comparison details have been put into a spreadsheet.
The most important things to me are (essential):
- Overseas Emergency Medical & Hospital Expenses: I prefer this to be unlimited.
- Emergency Medical Transport & Repatriation: I prefer this to be unlimited.
- Overseas Emergency Medical Assistance: I prefer this to be unlimited.
- Personal Liability: The higher the better.
Of medium importance are (desirable):
- Cancellation Fees & Lost Deposits: As a single traveller buying a 1-way ticket, NZ$2,500 is enough.
- Dental Expenses: Normal visits to the Dentist are not covered. Cover is for an unexpected event where there is pain that requires immediate treatment. The higher the better.
- Luggage & Personal Effects: The total value of what I am taking (including my Smartphone, Tablet, etc) can be replaced for about NZ$5,000. As most policies pay “the original purchase price less an amount for depreciation” for unspecified items and “current {replacement} value” for specified items, cover for NZ$5,000 is all that I need.
Of low importance are (nice to haves):
- Trip Interruption & Resumption: I’m GRANDPAcking… what is there to interrupt?… I might book my next flight in advance along with 1-2 days in a cheap hotel for when I arrive at my new destination but that’s all… as long as Cancellation Fees and Lost Deposits are covered I’m OK… NZ$5,000 should be plenty to cover even the most expensive one-way flight to South America.
- Hospital Cash Allowance: As long as the medical bills are being covered, what do I actually need that won’t be covered by my NZ$80 / day budget anyway?
- Documents, Credit Cards, Traveller’s Cheques & Cash: The most cash I’ll ever be carrying at one time will be about NZ$1,000. Credit Cards and Traveller’s Cheques are not an issue. A replacement Passport is only a few NZ$100s. Cover of NZ$1,000 should be plenty.
- Delay Allowance: If I’m delayed somewhere it’s not that much of a problem.
Of no importance to me are:
- Accidental Death / Funeral Expenses / Repatriation: My estate can cover this anyway… and I won’t be in a state to care.
- Permanent Disability: Shit happens. Whatever I get from insurance will be irrelevant in the greater scheme of things.
My Conclusion:
I am not:
- Going to the USA;
- Driving cars; or
- Doing anything that could potentially harm anyone else…
Therefore, I am not likely to be sued for mega-bucks; This means that I hold Personal Liability less important than Medical Cover.
I was guided towards CANSTAR‘s recommendation: Southern Cross TravelCare. I liked the ability to claim online. The $25,000 for “Luggage & Personal Effects” is actually only $7,000 for “Unspecified Items”; to get over that you need to pack items worth more than their stated maxima (which I do not have) and specify them when applying for the policy. I am unsure as to whether $1,000,000 Personal Liability is enough?… probably yes, but most other policies offer significantly more.
My second choice was Downunder’s Comprehensive International insurance policy. I like the fact that they offer $5,000,000 Personal Liability cover (Southern Cross only offer $1,000,000).
I read the Policy Wording of both of these policies and discovered that there was a problem with both:
- Southern Cross: The excellent value TravelCare plan is OK for the first 12 months but thereafter I will need to switch to the Working Overseas plan which is over 3x the price;
- Downunder: You can only renew your policy for a further 12 months whilst overseas which limits your total period of cover to 24 months.
I read the Policy Detail of each of the other insurers in my Comparison Table. Only 2 insurers provided the type of insurance that I needed: World Nomads and Travel Insurance Direct (TID).
I searched the internet for others, there are others but their policies cost more than my $1,200 limit… and, their policies are no better than those offered by World Nomads and TID.
My choice was between the latter two. I chose the World Nomads Explorer Plan. If you don’t have a Return Ticket World Nomads expect you to pay for your one-way ticket back home if you have to be repatriated. I have no problem with this.
