In this post, I describe why I think it’s important to purchase travel insurance for your extended career break if you plan on traveling domestically or abroad.
First, I’ll cover the basics of travel insurance, what’s covered and what’s not covered. Then, I’ll get into a discussion about the odds of actually needing to use it. Then finally, why I think the lower cost of travel insurance makes it cost effective to purchase.
What is travel insurance and what does it cover?
Travel insurance is insurance that people buy to protect themselves from unexpected costs associated with travel and to reduce their risk of major financial expenses.
These are some of the main things that traveler’s insurance will protect against:
- Unexpected cancellations due to illness, family emergency, or active duty military.
- Emergency medical costs like doctor’s office visits, hospitalizations, and medications.
- Evacuation to a hospital or repatriation to your home country for emergency medical care.
- Loss, theft, or damage to your traveling gear.
- Other miscellaneous expenses such as trip delays, trip interruptions, and baggage delays.
- Damage (not caused by you) to a rental vehicle.
***Be sure to read the fine print of your chosen travel insurance policy to see everything they cover. What’s covered in one policy may not be covered in another policy.***
What is NOT covered by travel insurance?
Not all risky activities like sky diving are covered by travel insurance. So if you get injured during a non-covered activity, any expenses for your medical care are your responsibility. So it’s important to get an insurance plan that covers everything you want to do.
Travel insurance will not cover treatment for any preexisting conditions. Nor will it cover anything that happens to you while under the influence of drugs or alcohol.
And very importantly for anyone traveling domestically, travel insurance will only cover you if you are more than a certain distance from your home address. So if you come home during your break, you will not have any coverage for any medical expenses incurred. With World Nomads travel insurance, for example, the injury or illness must occur more than 100 miles from your home address for you to receive reimbursement.
Important distinction: travel insurance protects your assets, it does not protect your health and well-being.
It does not create a giant bubble around you protecting you from illness and injury. You still need to be careful with everything you do. Don’t mix drugs and alcohol with risky activities. Don’t be an idiot. Get out of your comfort zone as much as you can, but don’t do something that’s outside your physical capabilities.
Wouldn’t car insurance cover medical expenses related to an automobile accident?
Car accidents are common all over the world and can cause those really high medical expenses we’re trying to avoid.
If you’re traveling domestically in a car that you own, then your car insurance covers any issues related to that. If you’re in an accident that another person caused, then their car insurance will cover your medical care. And if you are the cause of the accident, then the Personal Injury Protection part of your car insurance policy kicks in.
But I think it’s still a good idea to have traveler’s insurance to cover any non-car accident-related situations, especially if you are partaking in any outdoor adventure activities. And if you’re traveling abroad, don’t expect your car insurance policy to apply. If you’re in a rental car, your car insurance may not apply so make sure to research ahead of time.
What is the average cost of a good plan?
That all depends on where you live, your age, and whether you’re getting the better coverage for adventure activities (which I highly recommend).
I used World Nomads travel insurance during my Year Off and paid around $1300 for a whole year of coverage. If you round up, that’s around $120 per month for a good travel insurance package that covered everything I wanted to do.
The only way to know for certain how much a plan would cost is to get an estimate. You can get a quick and easy quote on World Nomads website.
What are the odds of using your insurance while gone?
I scoured the internet for data related to travel insurance use. But the only thing I could find was that 1 out of 6 travelers ended up encountering a situation that travel insurance would cover. And there was no distinction made between what those situations were. Were they just a stolen iPhone or were they an extended hospital stay?
The main claims you want to protect yourself against are the high-expense medical bills and repatriation back to your home country. So what are the odds of you needing to file that kind of claim? Unfortunately, there’s not much data out there on it. So we need to extrapolate some data that we do have and assume that it can be applied to someone traveling long-term.
According to the CDC’s website, there were 45.8 emergency department visits per 100 people in 2016 in the United States. This tells me that there is definitely a chance of you needing emergency care while traveling around the U.S. And I don’t think it’s unreasonable to assume that the numbers are similar in other developed countries around the world.
So because of these numbers and the chance of you needing emergency care, I think it’s wise to purchase traveler’s insurance to protect yourself while traveling both domestically and abroad. For only $120 per month, you’ll have protection against potentially tens of thousands of dollars of expenses.
How much money could your travel insurance save you if you needed to use it?
Take a look at some of the limits of your travel insurance policy. You’ll see how much you are reimbursed if something goes wrong. World Nomad’s policy protects up to $100,000 for emergency medical care. If something bad happened and you ended up hospitalized and needing expensive transport by helicopter and/or plane, then you could be liable for tens of thousands, even hundreds of thousands of dollars.
According to gaurdiandirect.com, the average hospital stay for someone aged 18-44 would cost $7400, and the cost for non-surgical treatment of a broken bone is around $2500. According to healthcare.gov, the average cost of a 3 day hospital stay is $30,000 in the United States. So the amount can vary wildly.
So why is it a necessity?
Because of the potential for those really high expenses, even if they’re not very likely, I think it’s worth it to spend $120 per month on a travel insurance package. That’s not much money for thousands of dollars of protection, not to mention peace of mind.
The travel insurance is definitely useful for lost or stolen valuables and delayed or missed flights. But because of the minimalist nature of long-term travel, I think the most important benefit is protecting yourself from the big medical expenses. Those smaller claims may add up to a significant amount of money. But if you’re carrying next to nothing with you, then there’s not much that thieves can steal in the first place.
Where can you purchase travel insurance?
You can easily purchase travel insurance online. I had World Nomads during my career break, and they’re highly recommended by a number of different travel experts.
There are many other options out there. Compare the quotes as much as you want but make sure your policy covers the activities that you really want to do. Don’t just buy the cheapest plan available.
Check out this comprehensive list of Travel Insurance Companies on consumeradvocate.org to help find the right plan for you.
Ready to start planning your Year Off? Check out the Year Off Planning Page.
Have a story about how you needed and used travel insurance while you were abroad? Please message me!
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