This is something you most certainly should not try to save money on. A solid insurance is essential. Especially if you travel long term and have nothing else to rely on. You need to know that you are properly covered or you could end up in serious trouble if you happen to be unlucky. Saving money for the cheapest, crappy option and not reading the terms is a huge mistake that in worst case can cost you years to pay off.
So, I’m going to go through a few of the important things you have to watch out for when choosing a travel insurance.
Which company to use is difficult for me to answer. It really depends on the country you are from. Research is very well worth the time. Check reviews, ask the insurance company about anything you feel you need to know and finally the evil one; READ THE TERMS!
I cannot stress this enough. No matter how much it sucks it is something you just have to do for you own sake. Insurance companies, which may not come as a surprise to anyone, are doing anything in order to get out of their end of the deal, and they use a lot of tricks. You need to know what you can do and what you can’t do in order to be covered.
My insurance company cheated me in several ways because I hadn’t read the policy and what was included. And also because I was traumatized and frightened out of my mind to think clearly. I don’t want that to happen to you. Knowing your insurance policy is essential because they are unlikely to help you. You have to demand that they stick to their policy.
Important things you need to check
For each point, check that the amount they cover actually is enough to make a difference. If they cover search and rescue but has a low limit it’s pointless.
1 What types of extreme sports do they not cover? And it doesn’t have to be extreme to be on their list. Even if you think you are not going to do anything extreme you have to check anyway. There might still be something you want to do that you don’t consider extreme that they don’t cover, for whatever reason. You may also change your mind at some point and suddenly decide to do something you never dreamed of.
2 Which countries are you not covered in?
3 At which altitude are you no longer covered? Often a travel insurance only cover you up until an altitude of 2-3000 meters (6-9000 ft) for no particular reason. Which means you wouldn’t be covered in most parts of countries, such as; Peru, Bolivia, Bhutan and Mongolia. Any mountain region is completely out of the question. If anything happens while you are above the artificial limit the travel insurance company has set you are not covered at all.
4 How much do they refund if your things are stolen or lost? Check the limit per item AND the total limit. Usually this is pretty low and will likely not be anywhere near enough to cover everything you have. Also check if a deductible applies. This is usually set fairly high so you won’t get much, if anything, covered.
5 Do they cover medical attention, doctors, hospitalization and transport back home?
6 Can you contact them 24/7?
7 Counseling after traumatizing experiences. (I’m covered by this but my insurance company “forgot” to tell my that I could have gotten counseling after I was taken hostage.)
8 Do they cover search, rescue and evacuation?
9 Do they cover in case of terror, war and hostage taking? (Also this one my insurance company “forgot” to tell me about. They should have offered to bring me home and also to bring me to a safe location. Both of which are covered, both of which they didn’t help me out with. I had refused to be brought home though.)
10 Do they cover legal support?
11 Are you covered if you study, work or volunteer?
12 Are you covered if you are in traffic accident? Can you rent a motorbike or car? Will they cover the cost if you accidentally damage property?
13 Do they cover expenses when flights are delayed or baggage is lost or delayed?
14 Do they cover expenses for accidents and injuries?
15 Do they cover travel documents?
Lost and stolen items
Check the policy on lost and stolen items. Make sure you understand the policy. It’s basically a requirement that if something is stolen you are only covered if you held the item in your hand while staring at it while it happened. If you didn’t do that it’s most likely not covered by the insurance. If something was stolen from your locked private room it’s a requirement that there is visible sign of intrusion AND you have to get a police report or they won’t cover it.
1 Cash will most likely not be covered at all.
2 Items stolen from cars and boats are typically not covered.
3 Check how much electronic devices will be covered by. You will see the limits are set ridiculously low making it impossible to get even half of the items back from the insurance money.
4 You have to report the theft within a certain number of days. Make sure you know how long you have.
If you travel with expensive electronics such as a laptop and DSLR camera watch out for the individual item limit. Many travel bloggers recommend World Nomads, but they have a $550 single item limit you need to be aware of. You can’t get any high end laptop or DSLR replaced for that.
Watch out for the specific wording in their policy
Again I will use World Nomads policy as an example because it’s well known and used (and recommended) by many. However here are 2 quotes from World Nomad’s policy to watch out for.
“stolen items, where they are not effectively supervised or where you do not take reasonable care for the safety, security or condition of your belongings”
“simple theft, where you do not observe the theft occurring”
What does, “not effectively supervised” mean exactly? What about, “take reasonable care”? “simple theft, where you do not observe the theft occurring” is probably everything except mugging and robbery.
Now, I can’t speak about how World Nomad handle their cases since I’ve no experience with them. But I can tell you how my insurance company (which is one of the highest recommended travel insurance companies in Denmark) has handled my 3 cases.
The way they phrase their policy (which is similar to World Nomads) I believe to be deliberately vague so it always comes down to a lack of definition. Reasonable? Effectively? They can always claim this wasn’t the case unless you are beaten down and things are taken directly from your person.
I had a case where my belongings were locked in my private room while I was out. The cleaning ladies locked themselves in and stole money from my backpack. I saw this late in the evening and I was going to the airport the next morning at 6 am. With no sign of forced entry and no time to get a police report they denied the claim.
Had I brought my money instead and lost them, they wouldn’t cover it because they don’t cover loss of cash. Had I given it to the reception for safe keeping and someone had stolen it again they wouldn’t cover it because I wasn’t watching the theft.
No matter what they always have one point in their policy they can use against you to not cover your loss. No matter what I had done there was no way I could protect my money properly according to my travel insurance. The best thing you can do to keep your things safe is to follow my advice suggested here.
In another case I had a phone charging at the reception of a hostel. I had handed it over to the receptionist in the evening who I assumed took some kind of responsibility for it. (Which can be argued was my mistake.) The next morning it was gone. He had no clue what had happened. He asked the security guard but he hadn’t seen anything.
Since I wasn’t South African I couldn’t blacklist my phone and when I couldn’t blacklist my phone I couldn’t file a police report. My insurance company denied the claim because “it wasn’t effectively supervised”.
When I was robbed I was obviously witnessing the theft and therefore they had to cover my loss. However, they still tried to cheat me by covering my camera for less than they were supposed to and they didn’t correct it until I complained about it. But it was also here I learned that in their policy they set the maximum coverage per item unrealistically low. Meaning, there is no way you will ever be able to replace anything with the money you get. I had things stolen for a total of around $1500. They, reluctantly, covered approximately half of it.
So, if you want your insurance to matter, read the terms thoroughly. Don’t assume you are covered (like I did) just because you buy a travel insurance from a recommended company. Also consider getting an item insurance if you have high value items.
If you bring anything particularly expensive items, such as a MacBook, smartphone or DSLR camera, I strongly suggest you look into getting a specific item insurance added to the travel insurance. You still won’t be covered in full, but if your whole backpack is lost, this can make a significant difference.
If the regular travel insurance cover stolen/lost items up to something like $2000 and you have a MacBook, smartphone and DSLR camera worth $3000 then the $2000 won’t be enough to cover anything but those 3 items (and not even enough for that).
Which means everything else; your backpack, clothes, water filter, other minor electronic devices etc are lost. Even if the rest isn’t worth much it all has to be replaced. Had the expensive items (the MacBook and the camera) been covered by individual item insurances, then the $2000 could have replaced everything else in your bag.
The items with a specific item insurance would be covered separately making the fairly small extra cost for individual items a worthwhile investment.
Let’s use my insurance as an example with a very rough estimation of the content of my backpack. I have a MacBook worth $1500 from new, a camera worth $500, a GoPro worth $500, a smartphone worth $500, some hard drives, memory cards and other small electronics for, I don’t know, let’s say $500. Then there’s the backpack, the cases for the electronics, technical hiking gear, shoes and minor items. I have no clue how much it is, but let’s say it would cost me $1000 if I had to replace it all.
That’s a total of $4500 for everything. If my backpack is stolen my insurance company will refund no more than approximately $1500. Which means a minimum loss of $3000. My insurance company does not provide an option to pay extra to be covered for more than $1500.
But because I’ve added an item insurance for my MacBook, which only costs a small amount compared to the travel insurance itself, the MacBook would be covered by the item insurance and the rest of my belongings are covered by the standard $1500.
So, for a small extra expense I double the refund I’ll get if everything is stolen. I would still be down by the $1500 that isn’t covered but it’s certainly better than losing $3000. Unfortunately I don’t think there exists any insurance company that would actually give you an honest coverage. The best you can do is to minimize your loss if you happen to be so unfortunate to lose everything.
If I’m wrong about this please don’t hesitate to let me know. I would love to know I’m properly covered by a decent company.
You can crunch the numbers for your own gear and see if it’s worth it or not to add individual item insurance. Remember to include the cost of the specific item insurance and whatever amount they won’t cover. Which brings me to the next thing to look out for.
Expensive items will, according to insurance companies, lose value very fast and if it’s lost they won’t replace the full amount of the item but only the “repurchase value” of a similar product. Which is yet another nonsense insurance argument. (It’s something you cannot actually compare, but I won’t go into the details about that here.)
So, when deciding if a specific item is worth covering, first check how much you paid for it from new, then how much the insurance company will replace it with (which depends on how old it is) and then how much you have to pay for the insurance itself
Let’s say you have a MacBook you bought for $1500. It is one year old and therefore will be covered for $1200 if lost or stolen. The cost of insuring the item itself is $300 for a year.
Then you are in actuality paying $600 to cover the MacBook for $1200 ($300 in lessened value because it’s 1 year old and $300 paid in insurance.) Meaning you will get $900 back out of the $1500 you spend on the item.
In case you aren’t fully covered and the deductible is $100 (or whatever number it may be) you have to include that as a loss too, changing the above example into a cost of $700 to get back $800.
These numbers are all random, but it’s worth spending 5 minutes to see if it is actually worth it or not. For expensive items in general I’d say it is worth it, but there is a significant loss no matter what. You are simply minimizing it.
To be properly insured it might be worthwhile to have 2 different insurances. For instance one covering medical attention and one covering you items.
By now I hope you understand that reading the terms are critical! Then you have a better chance to avoid these annoying cases and you also know what to say and not to say when filing the claim.
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