Missing fine print fish hooks can cost you dearly
Travel insurance is as much about malaria as it is missing luggage and everyone should have it – just read your policy carefully.
US house prices halved and, in some areas, never recovered.
So fast have Auckland house prices risen that Gilbert that many even well-earning people have been locked out of ownership.
‘‘I bought the house I live in around five years ago. I would have been 34 at the time, and making good money.
‘‘It was frightening how much the bank was prepared to lend me, but the reality was within six months I would have been locked out of the market.’’
Gilbert said he was speaking out on the issue because he saw a great deal of KiwiSaver focus on people choosing the right kind of fund, and also fees and contribution rates.
But little attention had been given to alternative ways of getting people into homes, and letting KiwiSaver function purely for its intended purpose.
Gilbert is not the only person speaking up about KiwiSaver accounts being reduced to nearly nothing for the purposes of home ownership.
AMP’s Blair Vernon said in June: ‘‘The first-home withdrawal component of KiwiSaver is being used more and more, which is reflective of the reality of the cost of home ownership, particularly in the Auckland market, and of how hard it is to save for a down payment on a house.
‘‘If you’re in your 20s you still have time to recommence your KiwiSaver contributions and accumulate savings to fund your retirement. People aged 30 or over would struggle to save enough for retirement.’’ STACEY Liddle celebrated her 30th birthday in Thailand in October. It was a dream trip for the Australian student. That is, until a bus ran into the scooter she was riding, leaving her left leg mangled and broken.
After three weeks in a Thai hospital, she picked up a superbug and had to be flown to Sydney for an emergency amputation.
I have a lot of respect for Liddle. For one thing, she accepted her fate with incredible graciousness, and is already talking about using the experience to help others.
For another thing, she actually had the brains to take out travel insurance. Most of us tend to assume that bad things will never happen to us. It’s called ‘‘optimism bias’’, and it’s human nature. That doesn’t change the fact that bad things actually happen all the time.
Thailand’s roads are the second most lethal in the world. I learned this gruesome statistic after seeing more than a dozen crashes there within the space of a year. I also experienced the panic of rushing to hospital after a friend’s accident – thankfully not life-altering, although she did rack up a fairly impressive bill.
Getting travel insurance is non-negotiable, but be careful. Liddle’s policy turned out to be useless, because it didn’t cover riding a scooter.
‘‘It was my fault,’’ she told 9News. ‘‘I didn’t read the fine print.’’
Again, huge respect to Liddle for owning her mistake. Insurance companies are not actually evil, even if they do profit from our failure to pay attention. Every policy has a different level of coverage and list of activities you can and can’t do – it’s not some sort of standard boilerplate that can be glossed over.
Finding all the fish hooks can be tricky. I was just about to sign up with a new insurer this year, when I decided to double-check a confusing clause.
Just as well I did: even though I’d gone to the trouble of getting a Thai motorcycle licence, for some bizarre reason I wouldn’t be covered on the roads of Thailand unless I also got a New Zealand licence.
It’s literally my job to be aware of sneaky financial tricks, and I’d spent a couple of hours comparing options. Even then, I still ended up a hair’s breadth away from buying a policy that was totally useless to me.
What happens if you do screw up? Well, Stacey Liddle’s family and friends set up a GoFundMe page that raised A$25,000 (NZ$27,000) to get her home for the emergency amputation. That’s great, but the growing trend of crowdfunding for health expenses worries me. There’s an uncomfortable bias in which campaigns succeed – usually, people with a mainstream appeal who can get sympathetic news coverage, and are perceived to be faultless (good luck trying to crowdfund treatment for alcoholism or a mental health problem).
Even if you’re Mr Popular, the generosity of the crowd might not last forever. Bills can run into six figures with major surgeries, weeks in hospital, emergency evacuation, and travel and accommodation costs for loved ones – all of which would have been covered by insurance.
Travel insurance is often marketed as protection against lost luggage or missed flights, which might be why some people don’t take it seriously. I don’t care about those things either, but I do care about getting wiped out by some horrific accident or exotic disease.
I reckon it’s time to apply some peer pressure to this issue, like we’ve done with the drink-driving ads. If one of your mates is planning a trip soon, send them this article. Insist that they buy insurance. Ask if they’ve read the policy, and what they are and aren’t covered for.
These days everyone knows that if you’re going to drink, don’t drive. In the same tradition: if you haven’t read the fine print, don’t fly. Got a money question? Email Budget Buster at richard.meadows@thedeepdish.org, or hit him up on Facebook.