Travel insurance is crucial

Southern Cross, the health and travel insurer, is a vast organisation.

So to keep the minions in various parts of it feeling connected, a ‘‘dashboard’’ is sent round each quarter so said minions can see what their colleagues are up to.

The latest one lists the top three claims in the first three months of this year.

The first is a claim for the $167,000 costs of air ambulancing a New Zealander hit by a car in Mexico, resulting in multiple fractures, to Los Angeles and treating him there.

The second was a claim for $91,000 for a person who fainted after a long bicycle ride in France and suffered fractured ribs and a damaged kidney.

The third was for $76,500 for hospitalisation for appendicitis in the United States.

The amazing thing is that only two of those would have made last year’s top 10 claims from the giant travel insurer. Those claims were (in order): $245,000 (aortic aneurysm while travelling in the US)

$234,000 (helicoptered to a larger hospital in Europe with bleeding and water on the brain)

$196,000 (admitted to hospital in Europe with abdominal sepsis and bowel obstruction)

$187,000 (investigation in Europe for brain malfunction called cerebellar ataxia)

$180,000 (respiratory failure secondary on board a cruise ship, brought back to New Zealand by air ambulance)

$140,000 (hospitalised in Asia and diagnosed with GuillainBarre Syndrome and aspiration pneumonia)

$135,000 (suffered a fatal stroke while travelling in the US)

$121,000 (fell while in the US and fractured their spine, caused by cancer and required radiotherapy)

$120,000 (suffered a bowel obstruction while on-board a cruise ship, admitted to hospital in Asia for surgery)

$90,000 (admitted to hospital on a South Pacific island following a seizure after renal failure, brought back to New Zealand by air ambulance).

These are huge numbers and the first rule of managing risk is if you can insure yourself against the risk of having to pay a really large sum of money, you do it.

That’s why we have car insurance (rear-ending a Ferrari), and house insurance (a big fire destroying it), and health insurance (your knee needs replacing).

All this adds up to some simple morals.

If you travel, you need travel insurance.

If you travel with kids, you triple need it.

If you are young and you are travelling alone, you need it.

The alternative should the worst happen can range from not being able to get treatment, to you or your loved ones in New Zealand having to impoverish themselves by finding tens, if not hundreds of thousands of dollars to bail you out.

Travel insurance is a pain because it lifts the cost of travel, but like insurance on loans, there’s a strong argument that it should be viewed as a necessary cost.

Now travel insurance is not like a Monopoly Get-out-of-jail-free card. Policies generally have so many exclusions, that you should invest a good couple of hours before you buy reading the policy.

For example, insurers won’t pay for events caused by certain reckless actions, such as accepting an invitation to tour a Brazilian Favella from a shifty-looking man who approached you in the street.

But when the worst happens overseas, and that usually means something medical, you need immediate access to money and advice, and having a big insurer there to provide both is necessary.