My Travel Insurance


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:

  1. My Health;
  2. 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.