Travel Insurance: does your gap year/work abroad insurance cover you for everything you think it does?
According to a report, 1000’s of people are travelling with inadequate travel insurance without realising it.
They point out that in recent years the value of our personal belongings has gone up but travel insurance cover remains largely unchanged. This is especially apparent if you consider the high cost electrical items that we all want to travel with (mobile phone, tablet, laptop, digital camera, e-reader, etc). All of these items will fall under a sub-category of baggage cover called “valuable items” for which there is a significantly reduced limit of cover.
For example: an insurance policy may promote £2,000 of Baggage Cover, but when you examine the policy you will notice that “Valuable Items” are only covered to a maximum of £200. Additionally, there may be a “single item limit” which will further restrict what you can claim for. Finally, if you take away the excess (the amount of each claim that is deducted by the insurance company on settlement) you can be left with a massive discrepancy between the true value of your items and the amount that you receive from your insurance claim.
For those who skim-read their gap year insurance or holiday cover there is a real danger that they will mistakenly believe that all of their personal items will be covered to the generic overall “baggage limit”. In the event they need to claim, it can result in massive frustration and expense.
What can you do about this?
- Firstly, make sure you understand what the limits are. Read the small print and in particular look out for references to Valuable Items and Exclusions (some policies won’t cover certain valuable items like mobile phones). Once you know what is and isn’t covered you can consider your options.
- If you have Contents insurance for your home then it may include personal items on holiday. If it doesn’t, you may be able to add this option to the policy. But even here you need to read the small print. There will be a limit to the cover and normally it will only be appropriate for a short holiday rather than an extended working holiday. Any claim could affect your overall no-claims and you may need to pay a supplement.
- Limit what you take with you. One reason insurers restrict cover for valuable items is that they are high risk and easily stolen (especially if you are staying in shared accommodation). Also, high value items are subject to fraudulent claims and it is suggested that limiting the cover will deter false claims.
- Finally, take good care. At the end of the day, you need to exercise greater vigilance when you travel. Wherever possible lock valuables away or keep them with you. Never leave anything charging unattended, never leave your mobile phone on a table in a bar or cafe where it could be easily snatched. Keep laptops and tablets in a fastened bag and keep the bag in front of you where you can see it. Be careful leaving bags under chairs in cafes, bars and restaurants. Its a common place for theft.
In the short term, it seems unlikely that insurers will change their approach to valuable items cover; and if they do, you can be confident that the gap year insurance premiums will increase. But, lets not be overly critical of the insurance companies. At the end of the day, they need to ensure that they collect sufficient money (mostly via premiums) to cover their outlay in claims (whether that’s for baggage, repatriation or massive medical bills). If the value of their settlements increases then their premiums will have to increase as well. There’s a simple logic to it.
We have a responsibility to check the cover to be sure it is appropriate to our own personal needs and circumstances.
So, for now, please read your policy carefully, take a couple of moments to add-up the cost of the personal belongings that you will travel with and finally, consider what you can do without. A lap-top is a travel luxury but keeping it safe at all times can be a burden. Online access via mobile phones is excellent and you’ll never be far from an internet cafe. So, on reflection perhaps you can do without your laptop? If you can, leave your current smart-phone at home and dig out something old and of little value to travel with.
For more information regarding gap year travel insurance, how it works and what to look out for visit our Gap Year Travel Insurance page.