On the cost of travel insurance at World Nomads

Regular Travelfish readers will be aware that we have, for a long time recommended the Australian-based World Nomads for travellers travel insurance needs. We think they’re a great company who are very focused on what independent travellers need.

That said, their rates have been inching up, and over on the Travelfish forum there has been a long-running Q&A session about travel insurance rates at World Nomads. In order to get some perspective from the World Nomads side of things I got in touch with Katrina Greeves who is the Product Marketing Manager there, and ran some questions by her about what was the reasoning behind these changes in price. My questions in bold.

Hi Stuart,

Thanks for the chance to answer some of these tricky questions posed the Travelfish community. We really appreciate the feedback – your community’s suggestions will help make our travel insurance better.

What has changed with how World Nomad’s organises its country brackets?
The price for travel insurance always changes depending on your country of residence and where you are going. We’ve recently made some changes just for residents of the UK and Ireland, which has affected the price of our policies if you’re going to S.E. Asia. For residents of the other 140+ countries we cover, our country brackets remain the same.

What brought about that change?
When lots of people from the UK and Ireland run into trouble in SE Asia and make a claim on their insurance, eventually, the pricing for everyone else is affected. Unfortunately, this is what has happened over the past 6 months with WorldNomads.com travel insurance, and that’s why S.E and Eastern Asia has been bundled into the same region as the USA, Canada, The Caribbean and Japan for the time being.

So, what you’re saying is, the rates are going up because a lot of Brits claim on their travel insurance – but isn’t that the whole point of having travel insurance?

Actually the main reason people should consider travel insurance is to provide help if they get sick or injured when travelling. Not everyone needs to make a claim, but the costs involved in helping those that do can be substantial. When you consider that it can cost up to $200 000+ for emergency medical expenses if you’re seriously injured, the cost you’ve paid for your insurance is probably the last thing on your mind.

Let’s be straight: In this case, our insurance underwriters for UK and Irish residents have been required to pay out claims in excess of premiums earned and so need to increase our pricing to cover those losses.

To explain, we work with multiple underwriters around the world who price risk (a.k.a travel insurance) differently. Our prices can change depending on a number of different factors:

a) the number of claims made from travellers in a particular region;

b) the amount that is paid out to help people when they get sick, injured or have their belongings stolen; and

c) the number of travellers going to a particular region, their age and how long they’re travelling.

Roughly what kind of increase in price for a traveller heading to SEA for three months does this equate to?
This is a tricky question to answer as there a lot of factors which change a travel insurance quote including: if you’ve bought a policy with World Nomads before, your country of residence, what adventure activities you’ll do and if you need extra cover for your laptop or other high value items. For a single, UK traveller, going to S.E Asia for 3 months and who’s not a World Nomads member, the base premium price increased by £32.65.

Other rates, especially for French travellers, seem unusually high – is this for the same reason?
The short answer is yes, over the past 12 months we’ve had to increase our prices for European residents.

Some people in the Travelfish community have noticed that our product for European residents is similar to other insurance providers. While we can not comment on why their prices are different, how they service their customers or pay their claims, we aim to provide the best value product, 24/7 travel assistance when things go wrong, and useful travel advice to keep our customers travelling safely.

World Nomads have a great brand, closely associated with backpackers and independent travel and they’re the first insurer many backpackers think of when they look for travel insurance. But the new rates make WorldNomads significantly more expensive than other insurance providers. What advice can you give to travellers who are trying to decide between WorldNomads and one of the other cheaper providers?

Yes, World Nomads travel insurance was built for independent and adventurous travellers. We don’t promise to be the cheapest, yet we’ll always add value where we can – like the flexibility to buy travel insurance and claim online (even while travelling), up-to-date travel safety advice, free language guides or offering travellers the chance to donate to community development projects through our Footprints program.

At WorldNomads.com, we’ll continue to choose insurers and emergency assistance partners that can support our customers globally, when they need it most. By all means, choose a travel insurance provider to suite your personal requirements. Whether it’s the price or the knowledge that you’re buying from a reputable company who’ll help you when things go wrong, just remember that insurance policies do differ and can change, and you should read the fine print to make sure you know what’s covered (and not). Our team is always ready to help answer your questions too – askus@worldnomads.com

Thanks Katrina for taking the time to answer the above.