Why does buying travel insurance have to be so hard?

(Come to think of it, why does buying any sort of insurance have to be so hard? But that's a topic for a whole blog in its own right.)

We spent eight hours on the web yesterday looking through the small print from as many backpacking/extended travel insurance policies as we could find. Every one has all sorts of headline-friendly cover that we don't need. Example: "Your valuable items are covered!" (which typically translates in the small print to "we only cover the first £125 ($232) of each valuable item, and there's an £85 ($158) excess, and we make a deduction for the age of the item, and you need to provide us with a police report, and full purchase receipts, and …"). Anyway, why would anyone take anything of any real value with them on a backpacking holiday?

Most policies, on the other hand, do not cover something that we think is absolutely necessary: terrorism. The risk of being caught up in an attack are incredibly small, but then so is the risk of getting caught in an Ebola outbreak, and that's covered. We believe that's exactly what insurance is for: the low probability but high consequence events. Not stolen alarm clocks. If we find ourselves being blown up by a crazed loony who thinks he's going straight to paradise, we want full cover to put our bodies back together and get us the hell out of there (not necessarily in that order). We do not want to have to start re-reading the small print of our insurance policy and preparing for an argument over semantics.

The British government has recently confirmed that we can forget about getting any support from them in the long term if we are attacked while abroad. But the Foreign and Commonwealth Office does suggest that the local embassy will at least help us out with immediate medical needs in an extreme case.

And why do most providers force us to say how long we're going to be away for, and refuse to cover us for longer than some arbitrary time (usually 12, 13 or 18 months)? We don't know how long we will be away. The whole point of this trip is to slow down, take time to discover the world, and see what experiences come our way. We don't want to be hurrying home because our insurance is about to run out.

It turns out that the backpackers' perennial favourite, World Nomads, looks promising initially because it is reasonably cheap, fully online (perfect for when you're on the road), and it can be extended as many times as you want during the trip. But whatever you do, don't be in a country when it decides to have a terrorist incident because you won't be covered. Unless you're an Aussie or Kiwi, in which case you might be, but not for cancellation costs. Confused? You will be if you start trying to read the Aus/NZ small print. Even World Nomads' staff don't seem to understand the finer points of their contract, although they are very friendly. We emailed them to ask about why the Aus/NZ wording provides some cover for terrorism but the UK wording does not. They denied that this was the case, saying that terrorism is never covered. Make your own mind up—here's the relevant wording:

The Aus/NZ wording:

We will not pay for any of the following losses: […] 8. A loss that arises directly or indirectly from an act of terrorism. The exclusion only relates to section; 2a Cancellation Costs [our emphasis].

The UK wording:

You are not covered for anything caused directly or indirectly by the following, unless You have contacted us and we have confirmed in writing that You will be covered: […] 16. any consequence whether direct or indirect of war, invasion, act of foreign enemy, hostilities (whether war be declared or not), discharge, explosion or use of a weapon of mass destruction whether or not employing nuclear fission or fusion, or chemical, biological, radioactive or similar agents, by any party at any time for any reason, terrorist activity [our emphasis], civil war, rebellion, revolution, insurrection, blockade, military or usurped power.

ACE Travel Insurance also looks good because it is cheap and it covers you for terrorism! As long as the martyr who chooses to make an example out of you plays nice and doesn't use nuclear, biological or chemical weapons. So by all means get attacked, but please stick to conventional means.

In the end we decided to go with Insure and Go's Backpacker Bronze policy. It is one of the cheapest policies we found, does not come with unnecessary cover for personal effects and luggage, and the exclusions do not mention terrorism at all! On the down side, their website doesn't quite work on the Mac. In such cases we normally close the window and find a product from a standards-compliant competitor, but in this case we had to just get over it. Also we won't be able to extend the policy, so we will have to switch to World Nomads if we're still travelling when the term runs out.