Everything you should know about working holiday insurance
Working holidays are a golden opportunity for youngsters to get out of their monotonous, routine lifestyle and discover new life experiences. For those unfamiliar with the scheme, it is a bilateral arrangement agreement signed between two governments to allow young people to work and travel overseas. While it is wonderful to embrace new opportunities, such as befriending people from all walks of life or undertaking paid or voluntary work, if you haven’t secured proper protection against the potential losses and risks while you’re abroad, you may see your trip end in financial ruin.
As such, it is imperative that you have the right insurance policy in place before you set out on your adventure. Medical and accidental benefits are of course necessary, but working holiday insurance can also offer you peace of mind from knowing that your medical and potential repatriation assistance costs would be covered if any unfortunate event were to occur. In this feature by Pacific Prime, we will take a closer look at this relatively new type of insurance product, namely its common benefits scope, major exclusions to look out for, and things to consider when purchasing.
What does working holiday insurance cover?
Working holiday insurance typically offers the following coverages whilst you are away from your home country:
- 24-hour worldwide emergency aid, with unlimited coverage for evacuation and repatriation assistance
- Medical coverage including surgical and hospitalization expenses
- Personal accident coverage (including major burns benefits)
- Personal liability
- Travel interruption benefit including trip cancellation, curtailment of the trip, and travel delays
- Cover for personal belongings
It’s also important to be wary that cheaper, basic travel insurance policies will generally provide minimal benefits for medical emergencies only, and generally have low coverage limits for all benefits (both medical and travel-related).
What are the major exceptions of working holiday insurance?
As with other forms of insurance plans, you should read the T&Cs thoroughly to ensure that the scope of coverage is enough to address the costs of unforeseen expenses, and to familiarize yourself with the items excluded from the policy, so that you won’t be caught off guard by any unpleasant surprises at the last minute.
Many people travel to partake in adventure sports especially in countries such as Australia and New Zealand. These adrenaline-pumping sports include skydiving, parachuting, gliding, bungee-jumping, etc. While you plan to get your heart racing, you should note that not every high-risk activity is automatically covered. Again, you should consult your insurance agent, and check the policy terms carefully before you take the leap of faith.
Pre-existing conditions are health conditions that exist before you secure a new health insurance plan, and they are typically excluded from coverage automatically. However, some insurers do offer the option of covering certain pre-existing conditions, though agreeing to a waiting period or paying extra premiums will usually be required.
Items lost due to negligence
While your luggage and personal items are covered for theft, damage, and loss, it’s your responsibility to keep them safe. So if you leave your belongings ‘unattended’ or fail to report to the relevant authorities after the item is lost, your claim may be rejected.
Working holiday insurance does not cover any illegal acts, including illegal employment. While you are free to switch as many jobs as you like, it is imperative to make sure that the companies you work for are employing in accordance with the local legislation.
Due to the high costs of potential compensation, most insurers exclude some types of work from their working holiday insurance, including pilots, tour guides, escorts, athletes, movie or TV filming crews, drivers of any kind of conveyance, divers, or any jobs in casinos, construction sites or nightclubs, etc.
What should I consider when purchasing working holiday insurance?
Working holiday insurance is indeed a relatively new insurance product, yet there are already many available options on the market, which vary considerably in fees and scope of protection. We have come up with a number of criteria that you should take into account to help you select the product that best meets your needs.
Don’t select on prices alone
We all love to save money, but that some policies are cheaper than others does not come without reason. Insurers with cheaper plans are more likely to be less established ones and hence have a smaller risk pool. Consequently, they are more likely to run into profit issues or even bankruptcy!
Increase your excess if necessary
If price is your major concern, you may ask insurers to lower your premium by opting to pay a higher excess in the instance that you need to make a claim. That way, you can save more on insurance as long as you don’t lodge any claims.
You will be surprised at how different travel insurance prices and scopes can be. If you purchase insurance via an agent, the prices usually have commissions added on. With this in mind, the most convenient and cost-effective way to compare quotes is to engage the services of an insurance brokerage like Pacific Prime.
Compare quotes with a professional insurance broker
Most established insurance brokerages such as Pacific Prime provide online quotation services which allow you to compare different quotes in seconds. With over 18 years of experience and nine offices across the globe, Pacific Prime leverages its relationship with different insurers to fight for the best plans and prices for our clients. Contact us today for unbiased insurance advice, an obligation-free quote, and plan comparison!