Backpackers Travel Insurance – Understanding How Excess Works

Though your backpackers travel insurance policy covers you for loss of goods, luggage or money, it is important that you are aware of the amount of benefit that can be paid and how much excess applies for each claim on that benefit.For example, your brand new i-pad is such a great travel tool, you take it everywhere. But while it was being charged at a cafe in Kathmandu, it goes missing whilst you were photographing a passing sadhu (holy man). You think no problem. I have a really good backpackers travel insurance policy so I will get my $1000 that I paid for it back. Maybe not.Check the benefits that are applicable to stolen goods. Though there may be a total of $5000 coverage, the limit for any one item is just $500. Okay you think. I get just $500 back. Maybe. Now check out what the excess is. That is the amount the insurance company deducts from any claims. In this case, lets assume it is $200 excess. So instead of getting back $500, you deduct a further $200 leaving you just $300. Enough for a great iPod but not an iPad.This is why it is so important to really investigate what your backpackers travel insurance policy will cover. Some policies allow you to increase the benefit for declared items, so you could have had your i-pad insured for the full $1000 value. You may also be able to pay a higher premium which may then cancel out any excess requirement. If you do this, then you may get your full $1000 back to buy a new i-pad.This is why it is so important to compare various policies to determine which is going to be most suitable for you. If you are not carrying expensive items, you may not even need any coverage reduced excess fees which will possibly reduce your premium costs.For any backpackers travel insurance policy, do not just read about the highlights of what is included. Also read the fine print with regards to claims, benefits and excess costs in the Product Disclosure Statement. Travel safely and securely.