Why Get Backpacker insurance? The basics. Find cheap, value insurance and understand the jargon!
The insurance industry is so complicated and packed with jargon that even the basics involve quite a comprehensive explanation… to look in depth would require a degree I reckon! This guide aims to provide you with enough understanding so you can go out and find a policy that will a) cover the things you actually need it to, b) not fail when you try to make a claim, c) be the best value option for your needs, which isn’t always the cheapest policy, but the most suitable.
The main topics discussed are:
Why take out travel insurance?
The three main types of travel insurance.
What sort of inclusions are there? And which do I need?
Tips for finding the right policy.
Recommendations for finding the best value policy
The Insurance Gamble
Insurance, in my mind, is a form of gambling. You pay a certain amount into the machine each year and its down to luck whether it ever pays out. Some people get their car stollen and make back the thousands of dollars they have paid in, others get their car stollen and find out they had ticked the wrong box on a form and will get NO MONEY back…
So why bother with insurance? The question should be “Can I afford NOT to have insurance?” When travelling I am unsupported and in unfamiliar surroundings. Adventure travelling without insurance goes beyond gambling and into the realms of insanity… watch this video and decide if you would be glad to have insurance paying for you to be helicoptered to a western standard hospital:
This girl had insurance and ended up surviving the ordeal and without the massive bill at the end. You may not be intending on going bungee jumping, but you could be in a car accident or have an apendicitis or worse… Or nothing bad could happen, thats the gamble.
Standard types of travel Insurance:
Generally up to about 90 days of travelling without returning home. Always check the specific amount of days as these can vary, however you will normally choose your exact travel dates, so if it is longer than allowed the site will probably tell you when you request a quote.
TIP: If you are going on any trip that could remotely be described as backpacking, ignore “Single Trip” insurance, its almost always more expensive with less inclusions!
a 12 month policy that will cover you for all trips taken in the given year. This will normally work out cheaper than buy single trip insurance for each trip. You cannot travel continuously for a year of course, trip lengths will be limited to a certain amount of days which will depend on the company, probably somewhere between 30 and 90 days.
For long term travel. Sometimes this is clumped under “single trip” but choosing an insurer that recognises backpacker travel as something different from just a long holiday is often better. I’ve found that 30 day backpack insurance compared to 30 single-trip insurance from the same company often not only comes in cheaper but with way more inclusions.
Inclusions (and Exclusions)
There are plenty of inclusions that it may or may not be worth paying extra for – it comes back to gambling again at this point. Ask yourself what sort of risks will exist on your trip that may be worth being covered for? ALWAYS READ THE SMALL PRINT, I know its boring! but the skeptic in me believes insurance companies make it complicated to confuse you so you will tick the wrong boxes and they won’t have to pay out on your claim. So, be careful. If its not on your policy, you are NOT covered for it!
This is the main consideration for getting travel insurance but every company is different, as is each policy. If you are going to the USA/Canada where medical cost are far higher, you might want to consider better coverage. For some EU travellers visiting Australia (visa dependent) there is a reciprocal health-care scheme meaning you can get much of your emergency healthcare cheap or free, so the minimum medical insurance may be enough. ALWAYS check your specific circumstance.
If you run some one over in your hire car… is it already covered by the hire company? Don’t pay extra money to the car company if your travel insurance already has personal liability! But check what the public liability you have includes. Once again, if travelling somewhere like the USA a low public liability cover like $200,000 may not cover a serious accident and the victims’ hospital bills – you will be liable for every cent over the 200k.
Will you be covered for canceled flights? Or for the airline going bankrupt? Or flight delays that mean you miss connections? If you are flying primarily with budget airlines you are at a higher risk of problems, so the extra cover may save you some expense.
Will they pay out a lump sum for this? no one plans to end up dead, but ask yourself will I have family that need money if I die? Morbid, eh?!
You normally have to select this as an additional option. Unless you are going heli-skiing for 6 months or something buying a full trips worth of extra cover is probably not economical, you can normally get separate insurance as and when you need it.
If the airline loses your bags that could be quite costly… as far as delayed baggage goes, keep essentials and a change of clothes or two in your hand luggage rather than paying extra money for insurance.
Beware of the “single item limit” clause… you may find out they will only give you $250 for your $1500 laptop.
Many banks already insure your credit cards etc. so you may not need extra insurance for this. Are you travelling in a way that you’ll be handing your passport over to a lot of different people? or travelling somewhere with a high passport theft rate (like Moscow)? Or somewhere with poor ATM access (like Myanmar) where you’ll be carrying a lot of cash?
More expensive plans generally tend to have a lower excess. Bare in mind things like, if you are paying to protect against travel money theft, but your excess is $250, how likely is it you will ever be carrying more than $250 in your wallet? Which inclusions does the excess apply to?
Ask yourself, if it costs an extra $50 to have your excess reduced to $0 that means you will save every time you claim, but will you claim? or have you wasted $50. Gambling time again!
Insurance policies often don’t pay out if you were intoxicated at the time of the accident. If you like a beer, try to drink it after the bungee jump rather than before! Once again, check through the small print, but if you don’t find anything about alcohol in their I would still suggest erring on the side of caution and avoiding reckless activities whilst under the influence.
These vary, read the policy carefully and consider whether they are relevant to you. Dental costs normally are not covered by medical. Always check exactly what each inclusion actually relates to, don’t assume from the title of the inclusion that it will always include what you think it should.
Tips for finding the best price
Sadly it does involve a little bit of looking around to get the best price, knowing exactly what sort of policy will meet your needs will speed up the process though. Some companies have great prices on short trips, others have better value for long trips etc.
How long is your trip?
Some companies seem to have a better per day rate for long trips, others seem to get more expensive per day the longer your trip is and are only good value for shorter trips (Like Allianz). Some insurers will not insure longer than 12 months (even some of the backpacker specialists!) and very few will do more than 18 months, although a few hit the 2 year mark.
Be realistic about how long your trip will be, you can always book in additional insurance if yours is going to run out, but you won’t get money back if your bank account empties and you go home 3 months early.
Being over 55 can increase the price. Not much you can do about that!
Where are you going?
Every company has a different policy, some want to know which continent, other want to know which specific country! Some will do Worldwide with or without exclusions (such as N. America).
Where do you live (have residency)?
Most insurers provide country specific insurance. In terms of English speaking countries I’ve found the UK to offer cheaper travel insurance than anywhere else. Also, bare in mind many insurers will only insure you if you have residency in their country of business.
Who are you travelling with?
Couples insurance often works out cheaper than two single policies. Some insurers offer “family” insurance covers two adults and all dependant children. If you are not travelling with children then this may end up more expensive than than two single policies or finding a company that specifically offers couples insurance, but its very handy if you are travelling with kids.
Make some phone calls
Ultimately, the more different quotes you get the more likely you will find the best price, you can even try taking your best quote and asking another company to beat it, If you are buying a $1,000 worth of insurance the agent may be willing to knock off some of their commission to get your business… If you don’t ask you don’t know! The internet is convenient and all, but talking to a real person can yield a better price.
What Insurance do we use?
We personally travel with World Nomads Travel Insurance for a few reasons
- We can apply for insurance and any claims online, without having to return to our home country
- They cover more adventure activities than any other insurer
- They insure people from over 150 different countries
- They’ve always had our back