Budget Buster: If you travel without insurance, you’re rolling the dice

Don't be too cocky when you are on the road. Travel insurance is a necessity and should be bought as soon as you ...
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Don't be too cocky when you are on the road. Travel insurance is a necessity and should be bought as soon as you purchaser your tickets.

If you head overseas without cover, you're playing a dangerous game.

There's a sleepy little backpacker town in the north of Thailand where bandages and gauze are costume de rigeur. Almost every other tourist you see walking (or limping) around has some sort of road rash from a moped crash.

Comparing scars is a favourite activity in hostels. Many of the walking wounded confess they don't have any travel insurance, which makes me anxious. Now I know how mums feel.

A minor spill is one thing - bandages and stitches are cheap, and you get a unique "Thailand tattoo" to show off back home. But if you get in a major accident, you're deep in the poo.

Think ACC's got your back? Nope. Any overseas treatment costs are on you, and hospital bills can quickly become enormous. ACC doesn't cover illness either, or treatment when you return home from a trip longer than six months.

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The truth is, travel insurance is essential. Don't leave it to the last minute either; buy it the second you've booked your flights. That way if you get sick, your boss cancels your leave, or there's some other pre-travel disruption, you're covered.

Just getting the insurance isn't enough. First you've got to understand what it is you're buying. For example, even if those scooter drivers had insurance, they still wouldn't be covered unless they had a Thai or international driver's licence.

Your policy contains a long list of "exclusions", and you might be surprised just how many situations aren't covered. My insurer says drugs and alcohol are out, as are gambling, caving, abseiling, playing a contact sport, hitchhiking, hunting and a list of other activities as long as your arm.

As far as I can tell, drinking a cup of tea in my hotel room is acceptable.

The good news is that there is some variation out there. If you know you're going to be doing specific risky activities, shop around to find an insurer that will cover your butt.

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When it comes to illness, the most common mistake is not declaring a pre-existing medical condition. Even if it's an ailment you shrugged off 10 years ago, you can guarantee an insurer will dredge it up and somehow link it to your current malady. Disclose everything. You can often negotiate coverage for pre-existing conditions, and may not have to pay any extra for low-level ones.

Lost and stolen possessions are another minefield. Before you leave, take photos of all your stuff and hang onto the receipts if possible. You also need to specify any high-value items, because there are usually claim limits on each category.

If you do get robbed, be aware that the clock is ticking from the moment you discover the theft. You usually have 24 hours to report it to the local cops, or your claim will be rejected.

Feeling all clued up now that you've read this article? Think again. There's no way I could detail all the exclusions to watch out for, and every single policy is different. That means you have to check the policy yourself.

It's true that insurers love to wriggle out of paying claims, but they're also considerate enough to tell you ahead of time exactly how they're going to do it. Always check the fine print.

Got a money question you've been struggling with? Want to send a bouquet or a brickbat? Email Budget Buster at meadows182@gmail.com, or hit him up on Twitter at @MeadowsRichard.

 - Sunday News

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