Note: I have a specialised guide on travel insurance for New Zealand travellers. If you’re a Kiwi, click here.
Update 2020: Most travel insurance providers are distancing themselves from covering any costs relating to Covid19. This includes hospitalization, medical care, trip cancellations and emergency evacuations. The best thing you can do right now is to travel locally, or if you must travel overseas and are in the high-risk group for Covid19, be mindful that your budget needs to include the cost of medical care and self evacuation. Of course, travel insurance is still recommended!
Travel insurance: It’s like the washing dishes of travel. Nobody wants to think about it, but sooner or later you just gotta get it done.
Today I’m going to break this topic down for you so you’ll know exactly what kind of coverage you should have and why you need it. There are many different policies and providers, but if you know what you’re looking for travel insurance is actually really simple. By the end of this post, you shouldn’t need to spend more than ten or fifteen minutes sorting out insurance for your next trip (yes, it is that easy).
What is travel insurance?
It’s exactly what it sounds like – protection for your trip. Just like you get car insurance for your car, and house insurance for your house, you can get travel insurance for your travels. Whether it’s theft, injury, natural disasters, or any other crazy travel damper, travel insurance will have you covered for any physical or financial loss.
Why do you need it? An example…
Lots of things go wrong when you travel. And even if things don’t actually go wrong, things always have the potential to go wrong. Here’s an example:
Let’s imagine you’re in the Philippines and you decide to go sand boarding. It looks like so much fun. Once your tour group gets to the dunes, your guide says, “Whatever you do, don’t put your hands out!”
Yeah okay, sure, I won’t put my hands out.
You run up the dune and look down at this enormous sand mountain you’re about to conquer. Ready. You lie on the board, take a deep breath and…go. Ohhhh yeah. This is cool. Then you start picking up speed. Whooshhhhhh. And then even faster. You’re zooming! And now you’re freaking out. Please don’t get any faster. But the laws of physics can’t hear you. You’re flying now. Seriously, you can feel the centrifugal force in your brain. This is too fast, you’re going to die, you need to slow down. Without thinking, you put your hand out. CRACKKK. Your wrist jars in the sand and you somersault into the air. That was your wrist breaking. OH MY GOD WHY AM I IN SO MUCH PAIN. You land hard. Another crack. That was your shoulder. I’M GOING TO DIE. You’re lying in the sand crying, your arm flopping around like a noodle.
You’re taken into surgery to repair your wrist and your shoulder. The surgery was successful, but they’re going to hold you for three days. Your hospital bill is $12,000.
If you have travel insurance, you’ll simply call your insurance company after the accident. A good insurance provider will not only pay for everything, but also make sure you’re in a reputable hospital getting the right treatment, that the changes to any travel plans are sorted and so on. You’ll pay a small deductible, maybe $100. They’ll pick up the tab for the other $11,900, plus all the subsequent changes to your flights/accommodation that are needed. If you require medical evacuation to a different city or country, they’ll take care of that too.
How travel insurance has helped me
You might be surprised to hear, that story above is actually a true story (one of many!) I’ve heard on the road. I’ve just dramatised it a little bit (okay I dramatised it a lot). But here are a few instances where travel insurance has worked for me, too:
- While I was living in China, I used to buy these bananas on the way home from class. And every night after eating them, I’d feel like something was blocking my throat. After a few weeks, I decided I had better see someone. I went to an international clinic, one of the best in Shanghai, and saw the throat specialist there. She was a German lady with a whole bunch of fancy letters after her name. She stuck a thin tube up my nose, with a camera on the end, and then fed it through my nasal passage and down into my throat (yes, it was uncomfortable). The camera was linked to the monitors in the room, so as she wiggled the tube around I could actually see inside my throat on the big screen TV in front of me. And then she said, “As you can see, there is absolutely nothing in your throat, it’s not infected or inflamed, it looks perfectly fine!” From memory, this elaborate treatment cost around $600, and my insurance company picked up the tab.
- I had just landed in Kenya, and was about to start my three month journey through East Africa. Two days after I landed, I received a message from my brother on Facebook. My grandmother had just passed. I was thirty hours away from home, but of course there was no way I was going to miss my grandma’s funeral, which was in just a few days. The last minute flight home was around $1,100. Travel insurance agreed to pick up the bill.
What things should you look for in your coverage?
When choosing a policy it is essential that you understand the terms. Here’s what you need to look for. I’ll divide this into three groups: (1) Absolutely Essential, (2) Important, and (3) Everything else.
- Accident and sickness medical: This includes hospital and specialist care, dental care, surgery, post injury care, ambulances, and medical evacuation. I would look for coverage of at least $100,000 (a simple surgery in many countries can cost up to $20,000).Travellers from some countries (such as Australia and New Zealand) will be able to find coverage of up to a million dollars. While you’ll probably never need this it’s nice to have!
- 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.I’d recommend coverage of at least $300,000-$400,000. 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). Again, in some countries it’ll be standard to get up to a million dollars of coverage – maybe a little overkill but nice to have.
- 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 (you break your leg, there’s a hurricane, your passport got stolen), 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 you lose your GoPro, your iPad, your passport, even your sexy new hiking boots, travel insurance should cover the cost of replacement. How much they’re willing to cover depends on your policy, and usually you’ll need to declare and pay extra for coverage on more expensive items, like a fancy camera or expensive camping gear. 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 (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.
Is there anything insurance won’t cover?
Some people think because they have travel insurance that everything under the sun is covered. It’s not.
For example, if you hire a motorcycle but you don’t actually have a motorcycle license, you probably won’t be covered if you have an accident. This is kind of obvious (would your car insurance at home cover you if you didn’t have a driver’s license?) but some people seem to get caught out by things like this.
If you missed your flight or train because you were hungover, they probably won’t be covering that either.
I could write out fifty scenarios like this, but much of this comes down to common sense. But this is also why it’s important to read the policy. If you can’t find the answer to your question in the policy, call or email your insurance provider before you buy.
Why you should buy travel insurance before anything else!
This is risky and I highly recommend doing things the other way around.
Travel insurance only covers you for things you’ve committed to after you’ve bought your policy. If you book a two week vacation today and then a cyclone destroys your resort, you can’t suddenly buy a travel insurance policy tomorrow and get everything back. You will not be covered. This is like crashing your car and then trying to buy car insurance for it the next day while it’s already lying wrecked at the bottom of a cliff. It doesn’t work that way. You need to have a policy in place before the incident happens.
That’s why I always recommend buying insurance first, before anything else. That way, you can start booking things like flights and hotels knowing that it’s all covered in case anything happens. If you’re about to book part of your travels and don’t yet have insurance, STOP. Be smart and get insured first.
Where can you get good travel insurance?
If you need to buy travel insurance, my first bit of advice is to check if you’re already covered. This is most common with people that have a credit card. Usually if you have a gold or platinum card, it will include travel insurance, you just need to let your bank know about your trip. Make sure you read the policy carefully. Many will only offer coverage for 30-60 days, meaning it’s not suitable for long term travellers, and many credit card insurance policies are quite limited in coverage as well.
It is also possible that you are covered under a business policy or a family policy. Check with anyone in your immediately family if their insurance policies include travel (even if they’re business or credit card policies) and if it extends to family members (this is common).
If you’re still not covered, you’ll need to buy a policy. There are many providers out there:
- STA Travel can be a good option for very cheap and basic insurance.
- IMG Global is more an expat medical insurance, but can be an option for long-term travellers.
- HTH is another option, I have no experience with them but they have a decent reputation.
Who do I use?
The company I have been using for the past few years is called World Nomads. I’ve been super happy with them, and here’s why:
- They’re affordable – Their policies are not expensive. You can get coverage for trips to almost any region and it won’t cost a fortune. Most policies I’ve purchased were around $2 per day.
- Their coverage limits are high – This will depend on where you’re from, but you should be able to get coverage at the upper limits of what I recommended above, with options to upgrade.
- You can buy a policy in the middle of your trip – This is probably the main reason I’ve been using World Nomads. My trips are rarely planned and it’s not uncommon for me to be travelling several months longer than I expected. It is super convenient that I can buy online whenever I want, and don’t need to submit exact travel dates. I previously used a New Zealand company called Southern Cross, who were great, but I no longer use them because they don’t have the same flexibility.
- Getting coverage is easy – Whenever I buy coverage with World Nomads I am literally done in five minutes. There’s no long form to fill out. I put in my age and destinations, check the policy hasn’t changed since last time, and boom. Five minutes. It’s that fast.
Again, I encourage you to check if you’re already covered, and if not, shop around and get the policy that’s best for you. Please make sure you read the policy and don’t just check the price. It’s important to know exactly what you’re covered for.
If you’d like to check out what your policy with World Nomads will look like, you can get a quote in less than ten seconds by visiting their site or by using the quick calculator below:
Still got questions? Leave them in the comments below!
Disclaimer: This is not a sponsored post. My recommendation comes from my own experience with World Nomads, and I pay for all my own World Nomads insurance in full. My experience with any travel insurance provider may differ to yours. The post above contains affiliate links. For further clarification, you can read my Disclosure Policy.