You’ve just finished high school, college or a job you’re leaving behind, and you’ve decided to take a gap year.
You won’t regret it.
Traveling the world, especially at a young age, is a life-affirming experience.
And while it may not be the most exciting part of the preparation process, sorting out your travel insurance is of utmost importance.
Just ask your parents. I bet they’ll agree!
But with such a dizzying array of competing policies and providers, how on Earth can you work out which is best for you?
I worked as a travel agent for two years, and I learned a thing or two about insurance policies. I’ve got you covered with a comprehensive gap year travel insurance guide.
Why you need travel insurance
Australian Foreign Affairs Minister Julie Bishop once told her electorate, “If you cannot afford travel insurance, you really can’t afford to travel overseas.”
Why would she make such a claim? Because stacks of uninsured Aussies were getting into financial trouble abroad.
Granted, this quote could have been a clever bit of sales copy coined by an insurance marketing guru.
But it’s sage advice, nonetheless.
A minor overseas medical complication could cost a traveler thousands. Something more serious could bankrupt them for life.
I should know.
Three days in a Swiss hospital set me back 11,000 USD, money I certainly didn’t have at the time. Graciously, my travel insurance covered the lot!
Taking a Year Off? Follow These 8 Steps for Choosing Gap Year Travel Insurance
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1. Understand the underwriters
Travel insurances providers adopt slick names and branding that appeal to specific demographics.
Behind these names are the insurance underwriters—huge, multinational companies that carry out complex risk assessments to determine customer premiums.
It’s a good idea to Google an underwriter to research their credentials.
2. Understand that travel agents work on commission
Travel agents are a godsend when it comes to whipping up a complex round-the-world airfare. As for insurance, however, they seldom offer the best deal.
A little-known trade secret is that travel insurance commissions can be as high as 40 percent. In practice, this means your charming agent is pocketing almost half of your insurance premium themselves.
The moral of the story? When it comes to travel insurance, always check out what’s available online instead of just taking your agent’s word for it.
3. Determine which excess you want
Excess is kind of like a fee you pay every time you make a claim. The higher the excess, the lower your premium (initial cost).
For example, if you select a policy with a $250 excess, you’ll forfeit that amount each time you make a claim. But you’ll pay less upfront.
A higher excess is ideal for travelers whose primary concern is to cover the cost of an expensive incident. A single $250 payment for a serious medical emergency isn’t a big deal in the grand scheme of things.
Travelers who want to cover their personal belongings from loss or theft would be better off going with nil ($0) excess.
4. Research policies’ regional costs
All travel insurance policies are priced on a sliding scale that’s determined by region. After all, a visit to the E.R. in the United States would cost substantially more than in Cambodia.
But many travelers don’t know that some policies provide complimentary coverage for brief visits to more expensive regions.
Say you’re spending six months in Asia with a week-long stopover in Los Angeles on the way home.
In this case, “Provider A” might charge the entire journey at the North America rate while “Provider B” might just charge you for the Asia region.
It’s worth investigating these situations, because the difference in price between the two would be massive.
InsureandGo tends to offer a bit more flexibility than others.
5. Shop around
In any given country, there could be dozens of travel insurance providers competing for your business. As is the case in any open marketplace, some offer considerably better value than others.
With so many options available, shopping for the best deal can be a confusing affair. So you’ll need to adopt a methodical approach. I’ll let you borrow mine:
- Determine what coverage you must have and what you don’t need.
- Create a shortlist of the best-priced policies that align with your needs.
- Examine the fine print before making a decision.
Comparison websites such as Compare the Market and Compare Travel Insurance provide quick ways to differentiate policies in the U.K. and Australia, respectively.
Note that certain companies only insure citizens of specific nations, while others provide coverage for multiple nationalities.
6. Read the Product Disclosure Statement (PDS)
Okay, I know. Spending an entire Saturday afternoon pouring through a dry legal document isn’t the most pleasurable of pastimes. After all, you’ve got an exciting and fast approaching gap year to plan!
Having said that, you do need to have an understanding of what you’re covered for. It could literally save your life.
If nothing else, work out which common travel insurance exceptions apply.
7. Know your exceptions
Plenty of sneaky exceptions are hidden in each PDS. Some are standard across the board, while others vary between policies and providers.
Common medical exceptions
- No coverage for motorbike accidents in which the rider doesn’t have a valid local license.
- No coverage for injuries that occurred during a state of intoxication.
- No coverage for expenses incurred due to specific psychological conditions.
- No coverage for certain adventure sports, such a trekking above a predetermined altitude. World Nomads is great for outdoor activities, though!
- No coverage for snow sports injuries. Travel Insurance Direct is one of many providers with a ski plan. It’s often possible to add coverage for snow sports for an additional fee with other companies.
Common personal belongings exceptions
- No coverage for belongings which were not adequately monitored. Most PDS have similar wording on this point. A certain amount of interpretation is involved and each claim is treated on a case-by-case basis. Essentially, you need to keep a close eye on your gear at all times, regardless of which policy you take out.
- No coverage for theft from cars left overnight.
- No coverage for stolen cash over a set amount.
8. Work out what coverage is important to you
Hijack cover may not be high on your priority list, although medical expenses certainly should be.
Overseas medical expenses
Medical expenses are the number one reason travelers purchase insurance.
And with good reason.
A nasty accident in a developed country could amount to a medical bill that’s impossible to pay. I’m willing to wager you don’t want to call your parents from a foreign hospital and ask them to mortgage their home.
Some policies offer unlimited medical coverage, while others set a maximum limit such as one million USD. Unless you’re headed to the United States, it’d be pretty hard to rack up a hospital bill higher than that.
Thrifty travelers prefer to save cash by seeking out medical-only travel insurance. Allianz is one of many companies to offer such a product.
Emergency repatriation and evacuation should be considered. Without it, a broken leg would require a business class airfare to get you home. Atlas Travel is excellent for medical evacuations.
Pre-existing medical conditions are rarely automatically included. Speak to your insurance provider about any ongoing concerns and arrange for extra coverage if required.
Be aware that a few nations have reciprocal medical agreements in place. When traveling to partner countries, some travelers choose not to bother with insurance at all.
Lost and stolen luggage
How much thought you give to this section depends on how many expensive items you bring. A traveler backpacking for a year with only the bare essentials wouldn’t need this type of coverage, while a tech fanatic with all the latest gadgets would.
The total coverage amount is often irrelevant. Rather, the coverage limit per item is what matters most.
Say you have a $250 item limit and lose your $2,000 camera. You’ll only get $250 back. If you have a $250 excess, that’ll drop down to zero.
Assess your gear and ask yourself, “Can I afford to lose this?” If not, you should probably ensure it’s fully covered, even if that involves an additional fee.
More expensive policies, such as Worldwide Insure’s Elite plan, tend to offer the best coverage for personal belongings.
Work and volunteer cover
Given you’re on a gap year, there’s a good chance you’ll be working or volunteering at some point. Certain policies cover workplace injuries while others don’t. Many have restrictions such as non-manual and non-hazardous work only.
Companies such as CareMed offer specialized packages for short-term overseas workers that may be worth considering.
Cancellation cover protects travelers if they have to abandon their trip due to unforeseen circumstances. This is more useful for high-end luxury holidays than for humble gap year backpacking trips.
A select few high-end policies, such as InsureMyTrip, cover the cost of travel should you cancel for any reason.
Unfortunately, there are too many variables to simply tell you which policy to take out. It ultimately comes down to what you want to be covered for, where you’re from and how much you’re prepared to spend.
But with this information at hand, you’ll be better be better equipped to navigate the ever-confusing world of travel insurance.
And once all this boring stuff is out of the way, you’ll be able to focus your efforts on traveling the world in style.
Have a good year abroad. And remember—be safe!
Harry is a South American-based freelance writer who covers travel, the arts, and culture, among many other things.
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