How to Pick a policy for an adventurous Trip

 

Image courtesy of Worldcare

Over the last week I have been getting my last bits of admin completed prior to departure for Kathmandu. One thing I had been putting off for weeks was arranging travel insurance, I knew it would be boring and cost more money than I wanted it to so putting it off seemed like the best option. While this isn’t an exciting aspect of planning a trip, I think it is a pretty crucial thing to look after, a necessary evil – particularly for a trip like mine which will involve trekking and has the potential to require expensive evacuations.

A good policy will cover everything from medical bills, cancellations and lost luggage through to emergency trips home if a relative should fall ill (some will even pay for you to resume your trip afterward). In the past I’ve used a travel insurance policy to replace my camera, I probably broke even on the cost of the policy + the excess.

In New Zealand there are plenty of insurance providers to choose from but I found a lot of them resell the same policies. After spending half a day on the phone and crawling through endless policy disclosure statements I was able to whittle down the choices to just a few on the basis of what they would not cover. Below I’ve summarized the things I took into consideration when shopping for insurance.

Choosing a Policy

When comparing policies I considered 3 main criteria that needed to be met:

1. Cover for trekking at altitude

This is mainly for getting assistance if you suffer from altitude sickness or become unable to continue trekking for any other reason – including natural disasters.

  •  I found a lot of companies have an altitude limit (generally 2500m) or will charge a premium if you want cover at high altitude (e.g. World Nomads charged an additional premium which doubled the cost of insuring for altitude cover).
  • Some other companies will not cover you in remote areas unless you are with a licensed guide
  • Most regular policies will not cover anything that involves ropes, not important for me but might be worth bearing in mind

2. Travel to “Risky” Areas

Pakistan and some of the other countries which I will be visiting are considered (by the NZ Ministry of Foreign Affairs) to be high risk destinations:

  • I found that many policies have a clause hidden in the disclosure statement which voids any cover when travelling in High or Extreme risk areas
  • Be particularly wary of this if choosing a ‘worldwide’ coverage policy

3. Cover for My Kit & Camera

My single most expensive piece of kit is my camera – so I wanted to make sure this would be covered. There are a couple of things to be wary of here:

  • All policies have a maximum coverage limit for lost/stolen baggage claims – this is the total amount you can claim for a single event.
  • A lot of ‘basic’ type policies may only offer ~$3,000 or less of cover in total, comprehensive policies typically offer somewhere in the range of $10,000.
  • Most policies have further restrictions on the maximum amount you can claim on particular items, I found a lot of basic policies had limits of $500 for electronic devices and cameras. These policies will typically offer extra cover for named items, but this will come at substantial additional cost.
  • Check that the amount of cover that you’re getting lines up with the gear you might need to replace, for some travelers a basic policy will do just fine.

Medical Cover
Also important for me to consider was medical cover – however I found this was not a big distinguishing factor between insurance providers. What I did notice was that typically, basic policies provide ~$10M of cover for medical fees whereas comprehensive policies offer unlimited assistance, I think racking up more than $10M in an overseas hospital before being sent home is pretty unlikely.

Recommended Providers

Who did I Chose?

After considering all of the above and spending the best part of a day calling insurers I purchased my policy from State Insurance, their policy had appropriate levels of cover for my gear and had no exclusions for altitude or risky areas. As an existing customer I also received a 10% discount (although if you ask nicely I suspect they’ll do this for anyone). State is a re-seller for Covermore travel insurance which seems to have a pretty good reputation for dealing with claims – interestingly for me it was more expensive to buy directly from Covermore.

Disclaimer! At the time of writing I can’t say how State/Covermore have handled my claims, should I make any I’ll update this post

Other Contenders

These providers did offer cover for risky areas and trekking at altitude without any additions needed.

  • STA – Reasonable value with good activity cover out of the box – was offered a 10% discount here too, however with individual item claims limited to $500 their basic policy was not sufficient to cover my gear. Comprehensive policy was too expensive.
  • Travel Insurance Direct – More expensive than State & STA but again, reasonable activity cover out of the box.
  • DUInsure – Downunder Insurance gave me the cheapest quote I received that covered everything, it was so cheap that it made me a bit suspicious. Couldn’t find much reliable about their service online other than 2 less than positive reviews.

Also-Rans

A few of the other insurers I checked out, these providers either didn’t offer cover for trekking/Pakistan or required an additional premium for such cover.

  • World Nomads – There are a lot of positive comments about this company online however I wouldn’t get caught up in the hype and Lonely Planet/Nat Geo endorsements. They are flexible but don’t include the activities you’d expect by default. When checking them out adding cover for trekking at altitude doubled my premium.
  • Southern Cross Travel Insurance (SCTI) – No cover available for areas deemed as Extreme or High risk by MFAT, good value policies otherwise.
  • NZ Travel Insurance, 1Cover & TINZ – Didn’t cover trekking at altitude.

Understanding Travel Insurance

While there are a mind boggling amount of policies and providers to choose from they all have some pretty similar elements.

Premium: This is a one off payment made at the time of purchase.

Regions: When you are looking for a quote the first thing you will have to specify are the locations you plan to travel to. For most purposes the world is broken down into ~5 regions, each with an associated cost level based on risk and the cost of care in those regions. America (or Worldwide) is the most expensive region, usually followed by Africa, Middle East & Aisa, Europe, UK, then Australia and the Pacific Islands. If travelling across multiple regions most insurers will base your premium on the region you will spend most time in. If you are spending some time in America it might be worth buying this policy separately (however only a limited number of insurers will sell you policies when you are already abroad).

Excess: When you make a claim you will have to pay an excess, this is obviously to dissuade you for claiming on small events. Some policies allow you to specify a lower excess (e.g. $250, $100, or $0) but this will increase the premium.

Activities: If you are planning an adventurous trip you will want to check out your insurer’s Policy Disclosure Statement (PDS) for activities covered by default. You will find that a lot of policies do not cover snow sports, driving a scooter/moped or anything deemed ‘extreme’ – in many cases you can add cover for skiing/boarding but even then it won’t cover you if you go off piste.

Exclusions: There are certain events any policy will not cover, e.g. accidents when you are drunk or high, misplacing your gear in a public space, the list goes on. You should find the insurers’ PDS and look for a section with Exclusions in the title.

Making a Claim: While you’d expect that in this day in age this would be a simple online process, however you should check what an insurer needs you to do in order to make a claim – sometimes the process may be protracted and difficult to do while overseas, requiring original documents to be posted and not much ability to contact via the web.

Cooling Off Period: In New Zealand all insurers are required by law to give customers 14 days from purchase during which they may revoke their policy and be refunded their premium.

This post is based on my experience alone, I have not received any payment or free product for this writing. I would strongly advise that you thoroughly read any potential insurers Policy Disclosure Statement before signing up.