Wheel traps for the unwary
What you need to know about travel insurance for a scooter or motorbike
Riding a “scooter”, motorcycle or moped in Southeast Asia is bordering on a rite of passage for young Kiwi travellers in popular tourist destinations such as Bali, Thailand, Vietnam and Greece. Most are blissfully unaware that motorcycle cover in their travel insurance policies almost always has exclusions that render the cover worthless for a great deal of travellers.
Some travel insurers blanket exclude motorcycle riding or being a pillion passenger in their standard cover. Even policies and extensions that explicitly offer motorcycle cover have exclusions that require the rider to A: have a New Zealand motorcycle licence to ride anything over 50cc, which rules out the majority of young tourists; and B: be riding legally in the country they’re visiting, which is often not possible.
It’s one of many insurance gotchas, that Kiwi travellers need to beware of.
Keen to see Southeast Asia on two wheels last Christmas I did a deep dive into insurance policies, just to find most New Zealand travel policies and extensions leave travellers at risk of huge bills if they are injured.
In Vietnam, the catch was that although we could ride a 50cc legally, we didn’t stay in a single hostel or hotel willing to rent anything less than a 100cc. Requests for where to source a 50cc were met with shoulder shrugs, because Vietnamese don’t tend to own such small scooters. I’ve heard the story is similar in Bali.
I checked my AA Platinum travel insurance and also the AA Travel Insurance policy of my travelling companion carefully and neither would cover for medical, damage or liability in Vietnam for the motorcycles we could hire, because tourists on standard 125cc scooters aren’t riding legally. Other policies I checked including 1Cover were the same.
Zoom Travel Insurance’s marketing caught my eye. “Ride Worry Free” it said. “Whether you’re zipping around Bali on a scooter, cruising the Amalfi Coast on a Vespa, or motoring through Mexico on a motorcycle, Zoom travel insurance has you covered . . . but there are some conditions that apply”. Those conditions were the same ones above that rule out cover for many of the travellers that want to ride motorcycles. There’s nothing worry-free about that.
Shortly after my travel article appeared, Southern Cross Travel Insurance’s [SCTI] public relations team emailed me about their $20 motorcycle add-on. Digging into the policy wording I found the $20 extension covered riding pillion with a licensed local, which incidentally was covered without an extra premium in my credit-card policy. But it had the standard exclusions A and B above, rendering it unusable for a good chunk of young travellers.
Kiwi holidaymakers on motorcycles concern Insurance & Financial Services Ombudsman Karen Stevens. The Ombudsman service has dealt with cases where people had no idea they weren’t covered.
“I don’t think it would even occur to [young people] when they travel that they’re not covered for certain modes of transport that might be perfectly acceptable for locals to use in the country they are visiting,” said Stevens.
She is frustrated that most people don’t read and understand their insurance policies.
Kiwi crash victims often appeal on Givealittle for tens or even hundreds of thousands of dollars when they find that their insurance does not cover them.
When it comes to the riding legally exclusion in travel insurance, laws differ in every country. In Bali, riders need a local Indonesian or international licence to be legal, and therefore covered. Insurers are unlikely to accept a local licence “bought” at the police station as some travellers report doing.
The Royal Thai Embassy London
website says an international driving licence is required to ride legally in Thailand. According to the Australian Embassy in Cambodia, a licence is not required to ride a motorcycle with an engine capacity up to 125cc.
In all of these countries, Kiwis who want their insurance to pay out are still limited to 50cc if they don’t have a full New Zealand motorcycle licence.
The cost of damage to motorcycles is another issue, although most don’t cost more than $1000 or so to replace.
In Laos, I could ride legally thanks to holding a NZ motorcycle and international licence, but my travelling companion took a risk. After a brush with the tarmac, we read his New Zealand insurance policy wording, which highlighted another insurance snag. It would only pay for damage if the rental vehicle had been hired from a “licensed rental vehicle agency”, which no doubt a Laos hostel isn’t.
Finally, most policies don’t cover the cost of the rented motorcycle being stolen, which is not unheard of sadly.
I don’t think it would even occur to [young people] when they travel that they’re not covered for certain modes of transport that might be perfectly acceptable for locals.
Insurance & Financial Services Ombudsman Karen Stevens
● As the Herald on Sunday went to print, SCTI said it would update its policy wording and cover customers with a full New Zealand motorbike licence for riding up to 200cc even if outside local licence conditions. Car licence holders are still limited to 50cc.