This article is a part of my travel tips series for New Zealand travellers. If you’re not from NZ, this post won’t apply to you. You can see the rest of the Kiwi traveller guides by clicking here.
My travelling whanau.
Today we’re talking about travel insurance.
As with most things, this aspect of travel is a little different for us New Zealanders. In fact, travel insurance has different rules/limits/prices in pretty much every country around the world. Like my previous guides on Schengen travel for Kiwis and banking for Kiwis, I’m going to grind down our options to see what is truly the best travel insurance for us New Zealanders on the road.
Why you need travel insurance
I’ve noticed a lot of Kiwis tend to skip over this part of travel.
Nah bro, it’ll be sweet.
Nek minnit you’re in a Thai hospital with a broken arm and $5,000 of medical bills at your bedside.
This is why even on the smallest of trips, you need to get insured.
Bali for a week? You need insurance. Big six month trip after graduation? Yes, insurance. Even if you’re just heading to Aussie for a weekend? Insurance insurance insurance.
I would even go so far as to say it is the most important thing to buy when you travel. Yes, more important than your passport. Forgetting your passport can’t kill you. Not having travel insurance can.
Let me tell you why.
Not all countries are like New Zealand. Back home, if you get in a car crash on the way to Rotorua the ambulance will pick you up and take you straight to the hospital. They’ll fix your broken leg. Go home and rest. No need to pay a cent. Back to work next week.
Most of the world is not like this.
In other countries, accidents cost money, especially when you’re a foreigner. If you fall down a mountain while hiking in Nepal, the bill to airlift you out of there and get you to an emergency room could be close to $50,000. If you need extended care, some hospitals can cost up to $10,000 per night. These are not bills you want to be left with after your holiday. Can you imagine coming home from a trip $100,000 in debt?
Those are extreme (but possible) scenarios, however travel insurance will also cover you for things like car accidents, missed flights if you get sick/injured, missed tours and hotel rooms you’ve prepaid for, even stolen baggage and electronics if someone jacks your bus or train.
The best part is, most good travel insurance policies will only cost you $3-$4 per day. For that price travel insurance is always worth it.
Now of course, there are several choices when it comes to buying insurance. The policy you decide to go with should depend not only on price, but also what kind of coverage they offer. Let’s go through the things you should be looking out for:
These are the things that are non-negotiable. Your insurance policy must have the following:
- Accident and sickness medical: This includes hospital and specialist care, dental care, surgery, post injury care, ambulances, and medical evacuation. Look for coverage of at least $500,000.
- Emergency medical: This relates to times where you’re stuck on a mountain or in the jungle, or in a country that doesn’t have appropriate medical facilities to treat you. It should include emergency evacuation by plane or helicopter. As you might guess, this is expensive. It should also cover transport of your remains home in the event of your death (this is important – it will be very expensive for your family to fund this). Look for coverage of at least $500,000.
- Personal liability: This covers situations where you’ve caused damage to people or property and are at risk of being sued. This will cover your legal fees and any compensation you’re required to pay. Look for cover of at least $500,000.
Other important things:
These things are not life-or-death, but will still be important to have.
- Trip cancellation: If your trip is cancelled for any reason (like the All Blacks lose and you kick a pole and break your leg), you’ll get reimbursed for all the expenses you’ve already paid. That includes flights, accommodation, tour fees etc. At least $5,000 coverage is ideal.
- Trip interruption and changes: If you have a serious injury on the road and you’re in hospital for a week, you might still want to continue your travels but things would’ve changed. You would have missed flights, missed tour dates, you might have been evacuated to a different country. With this coverage your insurance company will cover the costs of all these changes. Look for coverage north of $2,000.
- Baggage and personal effects: If your camera, laptop or phone gets swiped on the train, travel insurance should cover the cost of replacement. What is covered will depend between companies. Look for standard coverage of at least $2,000.
Depending on the type of trip you’ve planned, it could also be important to seek special coverage, like a specific sport or activity you plan on doing. If you’re going on a surf trip, double check that you get full coverage while you’re in the ocean (some companies won’t cover certain activities).
Most companies will offer coverage for a few other things, like your rental car deductible, missed concert or event tickets etc, but the ones listed above are the essentials. Make sure the coverage is rock solid on each of them. The other stuff will be mostly a bonus.
What are the travel insurance options in New Zealand?
There are a many options for you to consider in New Zealand. I don’t have time to investigate them all (pretty much every bank and insurance company will offer something), but I have chosen six of the most popular providers to look into. Of course, feel free to research a few more if you feel the need.
In the summary below, I’ll compare each of them on the provisions I consider most important, including price, and hopefully I’ll be able to give you a recommendation on who is best and who to avoid. Here’s who we’ll look at:
Southern Cross: A popular Kiwi insurance company that is a familiar name to many of us.
World Nomads: Global insurance company with flexible policies and very popular among backpackers.
1cover: Multinational company with a New Zealand arm that has good, affordable policies.
STA Travel: NZ Travel agency that caters to students and budget travellers
American Express: Big American company that offers policies in New Zealand.
AA: Another Kiwi brand that most will feel comfortable insuring with.
I haven’t looked into every single aspect of their policies, but I have rounded up the most important things: Medical, emergency medical, dental, cancellation, personal belongings and personal liability, among others. Here’s how they stacked up:
Basic travel insurance plans
First, we’ll look at the basic, entry level plans. These are the plans that cover just the essentials.
The below table summary is based on a one week trip to Europe for a single, 30 year old traveller:
Note: Some of these numbers might not be 150% accurate, because each company has different names for things so it was difficult for me standardise it. But I’m confident the numbers above are pretty close to what you’ll get.
Too many numbers? Here’s the short version:
1cover is the clear frontrunner on price, but the policy is really thin – it literally covers only medical and personal liability. However I’d be happy with that as long as I wasn’t going anywhere crazy and not planning on doing anything crazy (like a trip to Aussie, maybe). STA travel has the best coverage but super expensive, more than double the price. Who you choose totally depends on where you’re going. For me personally, I’d probably go with 1cover or American Express.
Next up are the premium plans. These are the plans that cover the essentials such as medical and personal liability, but also cover all the other little things like personal items, loss of income etc etc. Not all policies are the same though, so make sure you read each policy carefully before you buy. Here’s what the numbers look like:
To me all these policies look pretty similar across the board. I don’t think it would matter too much which one you choose – meaning the deciding factor for me would be price. I’d go with the cheapest – 1cover. The policy is great and covers all the essentials.
One word of caution here though: Going with the cheapest isn’t always the best option. Let me explain:
Why not just choose the cheapest plan?
First of all, no two companies are the same. For example, 1cover might be the cheapest for a one month trip but it might not be the cheapest for a one year trip. Therefore it’s important to check out the prices for your exact travel dates and determine what is actually the cheapest.
Secondly, you should choose the policy that best suits you. If you are carrying a lot of expensive camera equipment, each company will charge a different premium for the extra cover. You’ll need to get in touch with each company and get a quote for your personal situation. Likewise with the activities you’re planning to do. If you’re climbing in the Himalayas, some companies may not be willing to cover that. You’ll need to check who is happy to cover you for the travel plans you have.
The above rates are also based on a single traveller. Perhaps you are travelling as a couple or a family – that’s going to change things. Some companies will be tailored more for families and some tailored more for single backpackers, so make sure you check. Some companies will offer better cover for your family at a higher price, which could be important for you.
As you can see there’s many reasons why the cheapest company may not be the best for you. Before you pay anything for travel insurance, double check the policy and make sure it covers everything you need it for. If you cannot tell from the policy statement, call and ask! A policy is worthless if it doesn’t cover everything you’re at risk for.
Check if you’re already insured
Do you have a credit card? Perhaps you’re already insured.
If you have a free or low-fee credit card, it’s almost certain you won’t have travel insurance included with it. However, if you have any kind of platinum credit card, there’s a good chance you’re already insured.
Many banks in New Zealand offer you free travel insurance for short trips (usually up to 30-60 days) if you have a premium credit card. Call your bank or credit card company and ask.
Sometimes it’s even worthwhile to just upgrade to platinum before your trip to get the free cover. Since the annual fee on a platinum card is usually only $100 or so, if your travel insurance is going to cost more than that you might as well just upgrade your card instead.
Also check any family or business insurance policies you have. Many have travel insurance written in and you may already be covered under a policy that a family member has.
I recommend getting an Airpoints credit card, so you can earn points for free flights. Many of the platinum cards offer free travel insurance too. I have a breakdown of all the Airpoints credit cards in New Zealand here.
What to do when shit happens
The first thing you should do if something happens overseas is call your insurance company. Every travel insurance company will have a 24 hour number you can call. Not only is it important to call and get their advice on what to do, they have contacts and can connect you to the right doctor/hospital/lawyer.
The exception is when you’re in an emergency. If you’ve been in a bad car crash and you’re losing blood and your vehicle is in flames, just call the police and get to the hospital. Hopefully that’s just common sense, but ensure your safety first. You can sort out the insurance details later.
This should also be obvious, but make sure you keep all your receipts and invoices. Take photos of them and store them online somewhere as well, your email or Dropbox is a good place. You will need all these documents when it comes time to make a claim.
Summary for those who were too lazy to read the article
*Based on a one week trip to Europe for a single, 30 year old traveller:
- Cheapest basic insurance: 1cover
- Cheapest comprehensive insurance: 1cover
- Most expensive insurance: STA Travel closely followed by AA
- Cheapest insurance to get if you’ve already left home: 1cover
- Before you buy a policy, call your bank or credit card company – there’s a chance you’re already insured.
- Make sure you keep all documents like receipts and invoices for claims.
- Call your travel insurance as soon as any incident happens overseas – they can advise you on what to do.
P.S. The only insurance companies above I have actually purchased policies with myself are World Nomads and Southern Cross. Both were great. I cannot vouch for the others.
P.P.S. If you’ve had experiences with the above companies or any other NZ companies, leave them below and let us know about it. I can’t dig into every single insurance company in NZ, but any experiences you share will be helpful for others!