Long-term travel insurance: Prepare for a long recession break
Travelling for long periods of time requires a lot of preparation, with the all important insurance often getting left to the last minute.
With many people opting to take a gap year or two as a way of escaping the recession, what are the pitfalls, and what do you need to know before you decide which long term travel insurance plan to take out?
Sarah Garrod looks to see how long-term travel insurance differs from your bog standard cover for two weeks away in the sun.
With the gap year trend increasing as job searching and unexpected redundancy enables many of us to take some 'time out' to see the world, the insurance world must be rubbing their hands together.
And as the recession bites into our savings, ensuring you and your money are as safe as possible when travelling should be top of your holiday checklist. And don't forget, if you have any 'once in a lifetime' adrenalin filled plans, such as bungee jumping and white water rafting, you will have to make sure your insurance will cover you.
So what should you be thinking about before choosing a travel insurance plan that's right for you?
Peter Harrison, travel money expert at moneysupermarket.com, says: "Before leaving, gap-year travellers should inform their bank of where and when they will be travelling, to prevent their cards being blocked - providers monitor for irregular payment behaviour and a card being used in Bangkok when the they are usually based in Barnsley will flag their attention.
"Gappers should also photocopy details of their financial products and give them to a trusted family member. It will make life a little easier in an emergency."
He adds travellers should also ensure their cover limit takes account of expensive single items such as a camera or an iPod.
In general, insurers will not cover belongings if they are not adequately secured while you are away.
"Gap year travellers should also be aware most policies have clauses relating to the consumption of alcohol, so it pays to tread carefully," he warns.
As it can be quite complicated to decipher just what level of cover you should be getting, moneysupermarket.com recommends:
- Medical expenses - £2 million
- Personal Liability - £1 million
- Cancellation - £3,000 (or at least the value of your holiday)
- Baggage - £1,500
Mr Harrison's colleague, Maxine Baker, manager of travel insurance at moneysupmarket.com, warns to always check the details of your policy.
She says: "The most important thing that consumers can do when taking out travel insurance is read the policy wording and the details of the terms and conditions.
"A key point within the details of many policies is that if you intend to make a claim for lost/stolen passport or money you need to report this to local police or the hotel/accommodation within 24hours of the theft taking place and obtain written confirmation from either of these sources to be supplied to the insurer to validate the claim."
She explains this point outlines how crucial it is to be familiar with the policy wording and key facts.
"Always make a note of your policy reference number and take copies of the policy with you when you travel for your reference," she explains.
Brian Boosey runs the only specialist long-term travel insurance company in the UK, Coe Connections.
He says the majority of his clients tend to be young people, often studying a language abroad for a year while at university, and so requiring a longer term policy than is usually required. The company can provide cover once you have already left the UK, cover for working overseas and ongoing cover after 12 months.
Mr Boosey says: "It's a big market and the older market in particular is difficult. People need to be careful and need to get a good name, which will often mean spending a bit more."
Brian predicts the long-term travel insurance market will continue to grow in the coming months, as more of us escape Blighty to take some time abroad, enrolling on Teaching English as a Foreign Language Courses and seeing the world.
He also recommends consumers to be careful of what is included in the policy cover, particularly in relation to belongings, and to find a "sensible" medical expenses policy, somewhere between £1 and £5 million being fine, but up to £10 million being too much, and not necessary.
Ms Baker adds: "The key thing to remember if you are planning a long trip, such as a gap year, is that most annual travel policies are not suitable. Whilst they cover you for a year most have a limit - usually 30 days - on any one trip. However, there are a number of specialist providers that will cover longer trips.
"If you are planning an adventurous trip you'll need to check what activities are covered - for example Essential Travel has policies available from as little as £147.68 covering you for a full year of activities such as bungee jumping, canoeing, and jet skiing.
"Be sure to check the small print before buying to clarify exactly what is included in the policy. Medical treatment can be extremely costly whilst abroad and so medical expenses and personal accident cover are a vital part of your policy.
"Finally, you must also check the property you leave behind is adequately covered, and you will need to inform your home insurer if you plan to be away for longer than 30 days as this may invalidate your policy."
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