One in every three traveling Kiwis are uninsured
October 29th, 2009
By John Grant
How often do you buy travel insurance when heading overseas?
Research conducted by Southern Cross Travel Insurance shows 1 in 3 people departing New Zealand have no insurance protection for their trip.
Of the 40,000 Kiwi’s leaving the country every week, about 13,000 are taking risks that could cost them plenty, and all for a saving of probably less than $40.
With earthquakes and tsunamis happening in our neighbouring Islands, taking the risk of being uninsured could have devastating financial and other consequences.
With half of those travelers heading to Australia you could probably understand why no insurance was purchased. Many think that it’s not necessary to take insurance, especially with reciprocal health arrangements existing between our favorite destinations of Australia and England.
This agreement gives Kiwis full access to Australia and England’s public health system. There are of course many extra complications if you are hospitalised in another country. These include financial costs such as loss of deposits on forward travel, additional costs of accommodation for traveling companions to expenses like extra phone bills.
Anybody who thinks that their contents policy will cover their personal effects while overseas should think again. All contents insurance policies that we reviewed did not extend cover beyond New Zealand.
Considering all of this one would wonder why people risk being uninsured for such journeys.
And thats without even considering liability insurance. New Zealand is quite unique in having its own accident compensation scheme. Other countries do not and the willingness to litigate on injury issues really creates a significant risk to uninsured travelers. Most policies provide up to $5 mil. protection. As the slogan says – ‘Don’t leave home without it!”
Cover for at least $2 mil. and in some cases $5 mil. is provided and is absolutely essential for travelers. Consider for example what could happen if you accidental left an iron on in your hotel room and the subsequent potential claims against you that could flow from such an event.
If circumstances cause you to change plans mid way through a pre-booked trip, then losses can mount quickly. Cancellation or changes to travel arrangements can happen for many reasons. These include family illness, accidents, sickness etc. “Australia is no different to many other destinations in terms of travel related risks. Lost or damaged property items, travel disruptions, missed connections and crime are the sorts of things that we see in claims”, said Craig Morrison Chief Executive of Southern Cross Travel Insurance.
If you’re traveling further afield then the potential costs can really start to climb. A coronary on US soil could cost you $60,000 or more. During a six-week tour of the US a recently retired businessman was rushed to hospital suffering from severe angina attack that required immediate coronary artery bypass surgery. Five days after the surgery the client suffered a stroke and vital organ failure. The client remained in hospital for another 30 days and required life support. He was later repatriated with an intensive care doctor and intensive care nurse. Costs included medical, evacuation and additional expenses and amounted to over $725,000.
Policies are relatively low cost illustrating the likelihood of claims is not too significant. But as remote as it may seem, the costs of not doing anything about taking insurance is just downright scary.
Polices are generally purchased for each travel undertaken. However frequent travelers are able to buy an annual policy.
The cost of travel insurance starts as low as $29 and there can be discounts if you apply online.
Tags: insurance, John Grant, SCTI, southern cross travel, Travel Insurance, uninsured
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October 29th, 2009 at 7:56 pm
I travel a lot and always take out travel insurance. It really irks me when I read the news and see some “poor Kiwi” stranded in Vietnam or somewhere in Europe, their friends and family back in NZ appealing for financial help, setting up a bank account so people can donate money to help out the poor stranded Kiwi. Utter BS! If you can’t afford the extra few dollars (comparitive to what the rest of the trip cost) then you can’t afford to travel. I have NO sympathy.
October 29th, 2009 at 7:59 pm
I’m with you veedub, should be required by law or no go.
October 30th, 2009 at 4:16 am
Bollocks. This is insurance industry clap-trap.
I read the facts as that 27,000 Kiwis are leaving NZ every week (1.4m a year) with insurance – and many or most are over paying.
While many will be covered by credit card policies, and many go to the USA, most of the rest are wasting money:
1: health care is pretty cheap in almost all of the world. The USA is an obvious exception.
2: The care you get when you are in an accident is related to what happens immediately after – and that has no relation to whether you have insurance. i.e. are you scrapped off the road and stabilised immediately or not.
3: insurance companies love to give scary stories of people that lost a lot – they are mere anecdotes. We hear about one or two, but one or two is a lottery winners chance amongst those 1.4m trips.
4: Liability is an issue in the USA, but most places it is not. It’s a rare problem, and one that can be solved by time and a little bit of cash
5: Insurance companies are notoriously difficult to extract money from – even when you are in the right.
I recommend getting insurance if you are going to ski or do something else vigorous in the USA, but that’s about it.
Lance
I’ve motorcycled in 60+ countries, skied in several, lived and worked in more than a few and been injured a few times. I’ve saved a bundle by not having insurance except for most US ski trips.
October 30th, 2009 at 5:23 am
Travel insurance is surprisingly expensive in NZ. Like any insurance, it is usually only worthwhile insuring yourself against large, crippling expenses, such as liability or medical costs in countries without a reciprocal arrangement. There is little purpose in insuring against loss of deposit or loss of baggage etc, as in the long run, it’s better to take this risk and save on the premiums.
My personal (and considered) strategy is NOT to insure myself for trips to Australia and the UK. I do buy insurance when travelling to other countries, but I buy the cheapest insurance available and ask for a high excess on the policy – the high excess reduces the premiums, and doesn’t bother me as I’d only be claiming in the rare event of a very large claim anyway.
December 14th, 2009 at 8:26 am
Veedub- How long do you travel for? 1 month? 2?
When most kiwis do their OE, they are away for 2-3 years. Do you have any idea how much a travel policy would be for that long? $$$$$$
In fact, when I left NZ I couldn’t find any company that would cover me beyond ONE YEAR (and that one year premium was $875 at the time!).
So what are we supposed to do? Not travel?