Basic vs Comprehensive Travel Insurance

Compare basic and comprehensive travel insurance policies in New Zealand to understand the cover, costs, and exclusions that best suit your travel plans. Our guide provides a detailed breakdown and video comparisons using real-life traveller profiles and policies from well-known NZ insurers to help you make an informed choice and travel with peace of mind.

Updated 11 June 2023

Summary

Basic and Comprehensive policies are distinguished by the cover they provide. As the name suggests, a Basic policy typically covers the bare minimum requirements to protect you during your travels, focusing primarily on unforeseen medical emergencies and personal liability.
In essence, a Basic policy is designed to cover the most crucial, high-cost potential issues that could occur while you're away from home, but it won't usually insure you for millions of dollars in medical costs, nor will it provide for incidental hospital expenses, personal money or high-value items.
Comprehensive policies offer extensive medical and personal liability cover, as well as a wider range of coverage for many different events that can arise during a trip; trip cancellations, travel delays, loss or delay of baggage, and sometimes even unexpected events like rental car accidents. Comprehensive policies cover nearly every unforeseeable event that might disrupt your travel plans or cause you financial loss during your trip.

To explain the simalarities and differences of both policy types, our guide covers:

To help explain the differences and what to be aware of, MoneyHub Founder Christopher Walsh compares 1Cover, AA Travel and Tower's basic and comprehensive policies side by side in the video below. It's essential to understand what you're buying - too many New Zealanders never read their travel insurance policy and have issues if and when they need to claim. Our guidance is designed to help explain what to look for in a policy.

Basic Travel Insurance - Inclusions and Exclusions NZ

Basic Travel Insurance Explained - Inclusions, Exclusions and Typical Customers

Basic Travel Insurance, as the name suggests, provides essential, no-frills coverage for travellers. It's generally the most affordable type of travel insurance, primarily because it covers fewer risks than more comprehensive policies. Basic policies are valuable as they cover the most costly and unpredictable aspect of travel - unexpected medical emergencies.

Key Cover:
While each Basic policy is different, generally, there is cover for the following:

1. Emergency Medical Expenses
This includes sudden illnesses or injuries that occur during your trip. Coverage usually involves costs for hospital stays, medical treatments, emergency surgeries, and sometimes even medical evacuation back to New Zealand if necessary. However, the costs may be capped by some insurers - it's essential to check the policy limit.

2. Personal Liability
This includes cover for claims where you're legally liable for causing injury to another person or damaging their property while on your trip. The insurance is designed to cover the legal expenses or compensation you're required to pay.

Typical Exclusions include:
1. Pre-existing Medical Conditions
Most Basic Travel Insurance policies do not cover pre-existing medical conditions, which means if you have an ongoing health issue before you leave New Zealand, any medical costs associated with this condition are usually not covered. This is where things can get problematic as many claims have been denied in the past for being 'pre-existing' - our dedicated guide has more details.

2. High-risk Activities
Basic policies often do not cover high-risk activities such as skiing, mountaineering, or scuba diving. If you plan to partake in these activities, you might need add-on coverage - as an example, our ski travel insurance guide has further information.

3. Personal Belongings
Basic policies limit the amount you can claim on baggage, personal effects and lost or stolen money or exclude claims altogether. Many New Zealanders have had claims denied because they didn't know what their policy covered - make sure you like at each benefit line by line to know the limits and cover.

4. Non-Emergency Medical Costs
Basic policies don't tend to cover dental costs (for pain relief), hospital incidental costs and the costs incurred by an accompanying person who stays with you.

Who Buys Basic Travel Insurance Policies?

The following information is not financial advice but a summary of our research. We are not suggesting anyone buy basic travel insurance over a comprehensive policy (or vice versa).

Short Trips to Australia

Basic Travel Insurance can often be sufficient if you're going on a short trip to Australia, where the risks are low, and your primary concern is medical cover.
The likelihood of many potential disruptions decreases with the duration of the trip, and a basic policy protects anyone from hospital bills, ambulance fees and consultations that the reciprocal health agreement won't cover.

Low-Risk Holidays in the Pacific Island

A basic policy can be sufficient if your travel itinerary primarily includes low-risk activities (like staying at a resort, sightseeing, shopping, or beach visits).

Backpackers and Budget-Focused Travellers

Many New Zealanders travel with very little valuables and don't see the need to insure for things they don't own. Basic policies protect against unaffordable medical costs and personal liability while offering a low level of cover for cancelled travel, missing bags and delays.
A basic policy isn't without its risks, and a lower premium may result in high out-of-pocket costs if an incident occurs that's not covered.

Know This: The price difference between a basic and comprehensive policy is often not that much, and the extra benefits offered by going for a comprehensive 'premium' policy can be considerable. Many people want peace of mind but don't want to overinsure (and therefore overpay). To avoid paying too much, we suggest comparing trusted travel insurance providers and buying a policy you understand and can rely on.

Comprehensive Travel Insurance - Inclusions and Exclusions NZ

Comprehensive Travel Insurance Explained - Inclusions, Exclusions and Typical Customers

Comprehensive Travel Insurance, also referred to as 'Gold' or 'Premium' cover, provides a wider scope of coverage for travellers. While it's generally more expensive than Basic policies, it offers protection against a broader range of potential risks, making it a popular choice for those seeking peace of mind during their travels.

Key Cover:
While each Basic policy is different, generally, there is cover for the following:

1. Emergency Medical Expenses
Comprehensive policies cover sudden illnesses or injuries during your trip. However, they offer much higher payout limits and can, in some instances, cover pre-existing conditions when disclosed and accepted when purchasing the policy.

2. Personal Liability
The cover is more extensive than a Basic policy, often including defence costs, a high rental vehicle excess and legal protection for claims against you.

3. Cancellation and Curtailment
This cover is one of the most significant differences between Comprehensive and Basic policies. A comprehensive policy provides generous (and, sometimes, unlimited) reimbursement for pre-paid travel and accommodation expenses if you have to cancel or cut short your trip due to specified reasons, as well as cover for restarting your trip, something that basic policies offer very little protection for.

4. Baggage and Personal Belongings
Comprehensive policies usually offer higher coverage for lost, stolen, or damaged baggage, as well as stolen or lost money and travel documents, and generous high-value item payout limits for things you're travelling with.

5. Travel Delays and Disruptions
Cover for travel delays and disruptions, including missed connections and accommodation expenses, is typically included and generous in nature to minimise the impact of any travel mishaps.

Typical Exclusions include:

High-risk Activities Unless specifically added to the policy, many high-risk activities may not be covered. If you're planning adventurous activities, check with your insurer about whether you can add coverage for these.
Undisclosed Pre-existing Medical Conditions While Comprehensive policies can often cover pre-existing conditions, they must be disclosed and accepted when purchasing the policy.
Claims due to intoxication or illegal activities Insurance companies generally exclude any claims arising from illegal activities or intoxication.

Who Buys Comprehensive Travel Insurance Policies?

While the below information is not financial advice, it provides insight based on our research into typical customers for comprehensive policies:

International Travellers Heading to Europe, the USA or other High-Cost Destinations

For those travelling long distances for a number of weeks, comprehensive policies provide broad coverage that can offer peace of mind and protect against the costs.

Travellers with Pre-existing Medical Conditions

Comprehensive policies often cover pre-existing conditions, making them the preferred choice for those with ongoing health concerns.

Know This: While a Comprehensive policy costs more, it offers a broader coverage and can save you from significant out-of-pocket expenses in the event of an unforeseen incident. We suggest comparing trusted travel insurance providers and purchasing a policy that suits your needs and travel plans.

Basic vs Comprehensive Travel Insurance NZ Comparison

Cost and Cover Comparison: Basic vs Comprehensive Travel Insurance

Because every trip is different, the best way to explain the differences in price and cover is via video. In the video below, MoneyHub Founder Christopher Walsh compares Basic and Comprehensive policies from AA Travel, 1Cover and Tower. Focusing on four traveller profiles, the video explains each policy's costs, coverage benefits, and potential limitations.

The traveller profiles include:

A couple, both aged 38, are planning a two-week trip to Bali.
A family of four with parents aged 43 and children aged 10 and 8, going to the USA for two weeks.
A solo traveller, aged 25, embarking on a three-month backpacking adventure across Europe.
A couple, both aged 60, are going on a luxury two-week cruise around Asia.

Our video is published to look for and how to compare, including the policy cost, coverage benefits, policy limitations and exclusions, coverage limits and fine print:

Basic vs Comprehensive Travel Insurance NZ FAQs

Frequently Asked Questions

Important: Before purchasing any travel insurance policy, it's essential to read through the policy, which outlines what is and what isn't covered. This will help you avoid any disappointments when making a claim. The questions below are for guidance only and have been summarised in the video below - all questions need to be directed to the insurer.

After starting my trip, Can I upgrade from a Basic to a Comprehensive Travel Insurance policy?

Typically, travel insurance policies require that any changes, including upgrades, be made before the start of your trip. However, this can vary between providers. It's best to contact your insurance provider directly to discuss potential changes or upgrades once your trip has already begun.

Are there any specific circumstances where Basic Travel Insurance is recommended over Comprehensive?

Basic Travel Insurance might be suitable for shorter trips, low-risk destinations, or when the primary concern is coverage for medical emergencies. However, the specific circumstances and needs of the individual traveller must always be considered. It's important to assess your personal risk tolerance, the nature of your trip, and potential out-of-pocket costs if an unexpected event occurs that isn't covered by a Basic policy.

How can I ensure that my pre-existing condition is covered under a Comprehensive policy?

When purchasing a Comprehensive policy, you should disclose all pre-existing medical conditions to your insurer. Sometimes, the insurer may require additional information or documentation from your doctor. Coverage for pre-existing conditions varies between insurers and may increase the policy's cost. Ensure you fully understand the terms and conditions of coverage for pre-existing conditions before purchasing.

If I'm travelling to multiple countries, should I opt for a Comprehensive policy?

The more complex or lengthy your travel plans, the more likely a Comprehensive policy may be beneficial. This is due to the broader range of coverage for events like travel delays, cancellations, or loss of baggage that can occur more frequently with complex itineraries. However, it's important to assess your specific needs and risks associated with the destinations you're visiting.

What factors can affect the cost of my Travel Insurance policy?

Several factors can affect the cost of a travel insurance policy, including your age, the duration and destination(s) of your trip, the number of people being insured, the type of coverage you choose (Basic or Comprehensive), and any optional extras you add to your policy. Additionally, pre-existing medical conditions may impact the cost.

What should I do if I don't understand the fine print in my Travel Insurance policy?

If you struggle to understand the details of your policy, don't hesitate to contact the insurer and ask for clarification. It's important to fully understand what your policy covers and excludes before you start your trip. Also, consider seeking advice from independent sources, such as consumer advocacy groups or legal advisors, to better understand your policy's terms and conditions.

Disclaimer: Always refer to your chosen insurer's policy wording for the exact terms and conditions; our guides are published to bring transparency to travel insurance, but policies and benefits can change anytime. If you have any questions, please ask the insurer and make sure you understand the answer.