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Important:Travel insurance rules continue to change as a result of the coronavirus pandemic. We’re working hard to keep up and make sure our guides are up to date, however some information may not be accurate during the pandemic. It’s even more important to double-check all details that matter to you before taking out cover. Please know that some policies may not be available through Finder at this time. Here are some helpful tips:
- If you're buying a policy today, it's unlikely that you'll be covered for any coronavirus-related claims
- If your travel plans go against government advice, your policy will most likely be voided and you won't be covered
Whether you're heading overseas for work or planning to work to supplement your travel, you need to find the right travel insurance policy. This article examines the types of working holiday insurance available, what these policies cover and what you need to know about when working overseas.
Comparison of travel insurance brands that cover working overseas
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Please note that the conditions listed in the table above should only be viewed as general conditions regarding working overseas. It's always a good idea to get in touch with your insurer to verify how any work you will be engaging in overseas will be covered.
What does working holiday travel insurance cover?
Before you start your journey, you need to make sure you have the appropriate working visa. A working holiday is not like a business trip and you need to have the right permit before you start working in another country. So, what are you covered for? While it will depend on your insurer, you can find cover for:
- Non-manual work. This can be paid or unpaid includes professions such as clerical duties, teaching and childcare.
- Manual work. Some policies offer cover for paid or volunteer work in industries such as maintenance, general farm work, retail and hospitality. If your profession is going to require you working at heights, make sure that it is included in the policy.
- Guide work. This include work as guide or instructor for activities such as skiing or surfing. Make sure that the activity is covered by the policy.
List of work that is generally covered by travel insurance
- Working on a cruise ship
- General farm work
- Working on a yacht
- Gym instructor
- Yoga teacher
- Swimming instructor
What don't working holiday travel insurance policies cover?
Just like what you are covered for, what you aren't covered for will vary from insurer to insurer. However, conditions that you should be aware of may include:
- Personal liability. While you will have cover for personal liability when travelling as part of most travel insurance policies, this benefit does not cover you while you’re working.
- Working at heights. Generally working heights of five metres or higher above ground is prohibited.
- Offshore. Most travel insurance policies will exclude cover if your overseas work will be offshore.
- Working underground. Generally there is no cover for working underground in mines or caves.
Working holiday travel insurance general exclusions
The general exclusions, or circumstances in which cover will not apply, are the same for working holiday travel insurance as for normal travel insurance policies. These include:
- Theft of unattended luggage. If you are deemed to have been negligent in the supervision of your belongings.
- Irresponsible behaviour. Reckless behaviour or acts committed under the influence of drugs or alcohol.
- Non-disclosure. Claims arising from circumstances of which you had prior knowledge and failed to disclose to the insurer.
- Illegal behaviour. Breaking of government prohibitions or regulations, including visa requirements.
- Actions by a government authority. Claims resulting from foreign government confiscation, detention or destruction.
- Self-harm. This includes suicide or attempted suicide.
- Pre-existing medical conditions. If you claim is related to a medical condition that was already affecting you prior to your departing on your trip.
- Adventure activities. Pastimes such as such as skiing, rock climbing, skydiving or hang gliding, unless included in the policy.
- Scuba diving. Underwater diving, unless you hold a current licence or are with a licensed instructor.
- Flying. Any form of air travel not in a licensed passenger aircraft.
Backpacker travel insurance
As mentioned previously, there are many reasons why people work overseas and one of those is to earn money to fund further travel. Backpackers often look for casual work on their travels and backpacker travel insurance often includes working situations in its coverage.
The main difference is that many policies will only cover light work such as fruit picking or bar work and will not cover heavy manual labour, where the risk of injury is obviously greater. For this reason, travellers taking out backpacker insurance and wishing to work whilst overseas should read the Product Disclosure Statement carefully to determine which types of work they are covered for.
Apart from covering employment situations, the other main benefits of backpacker insurance over normal travel insurance are:
- Extended cover periods of up to 18 months
- Cover for multiple destinations
- Cover for most adventure activities
Planning a gap year? Finding the right of travel insurance
Another circumstance in which a traveller might wish to work overseas is if they are on their gap year. A gap year is a year taken off after completing high school and before going on to university or into the workforce. Those on their gap year may be trying to see as much of the world as they can in the available time, so they need to make sure they have adequate travel insurance in case something goes wrong. And unless they have been saving for their gap year or are being funded by their parents, they will probably need to work at some stage on their journey, so working holiday travel insurance would be a wise investment.
Apart from organising insurance, other crucial steps in planning a gap year include:
- Finding accommodation. Locating good cheap hostels and contacting friends and relatives with a view to free accommodation.
- Getting vaccinated. Visiting your doctor and getting the correct shots for the countries you will be visiting.
- Researching destinations. Doing some research on where you are going and checking Smartraveller, the government advisory website for travel warnings.
- Doing the paperwork. Finding out what visas, permits, travel insurance and other travel documents will be required and obtaining those that you can prior to your departure.
Passports and visas requirements
Every Australian resident must have a valid passport in order to travel outside of Australia. Your passport must be valid for at least six months (a requirement for entering many foreign countries) and everyone must have one, including children and newborn infants.
You will also need a visa to work in any foreign country. The type of visa required will depend on the country and how long you plan to work there. If you are on holidays and want to earn extra funds doing casual work along the way, you can obtain a working holiday visa. Australia has reciprocal working holiday visa programs with a number of countries.
If you’re planning to work full-time, you may be required to have your employer sponsor you or to satisfy other criteria, such as having evidence of a return ticket to Australia and not staying longer than a certain time in the country. Visa requirements vary from country to country, so make sure you contact the relevant embassy and know the requirements well ahead of time if you’re planning to work overseas.
Am I covered by a Reciprocal Health Care Agreement (RHCA)?
If you’re working in a foreign country, you may be covered by a Reciprocal Health Care Agreement (RHCA). This is an agreement with Australia that allows you to receive basic health care under that country’s version of Medicare. Participating countries include Belgium, Finland, Ireland, Italy, Malta, Netherlands, New Zealand, Norway, Slovenia, Sweden and the UK.
An RHCA allows you to access free or subsidised medical treatment and prescription medicines, but the level of cover provided is limited and varies depending on the country you are in. It only covers emergency medical treatment and does not cover ambulance, dental care, elective treatments, funerals, medical evacuation to Australia, paramedical services, private patient hospital care, pre-arranged treatments or any treatment that is not immediately necessary.
Therefore, an RHCA is no substitute for travel insurance and should not be seen as such. Travel insurance provides comprehensive protection, covering all the things an RHCA does not (and much more), and it’s essential for Australians working overseas, whether they are in an RHCA country or not.
Does my superannuation get paid overseas?
If you’re working overseas for an Australian company, your employer is required by law to continue making superannuation contributions on your behalf while you are away. However, your employer may also be required to pay super for you in the country where you are working – a situation known as ‘double superannuation coverage’.
To avoid this problem, the Australian Government has developed bilateral social security agreements with a number of countries that require superannuation to only be paid in Australia and not in your country of temporary employment. These countries include Austria, Belgium, Chile, Croatia, Czech Republic, Finland, Germany, Greece, Hungary, Ireland, Japan, Korea, Latvia, Macedonia, Netherlands, Norway, Poland, Portugal, Slovak Republic, Switzerland and the USA.
To qualify for exemption from double superannuation coverage, your employer must obtain a Certificate of Coverage from the Australian Government, which you must present to the government of the country you are working in as proof that your super is being paid in Australia.
What happens to my tax overseas?
Working overseas can also create problems when it comes to taxation. If you are an Australian resident for tax purposes and working overseas, you are required to lodge an Australian tax return and pay tax on your foreign income. But you may also be required to pay tax on your income in the country where you earned it, which results in a situation known as "double taxation".
Just as with double superannuation coverage, the Australian Government has formed agreements with a number of countries to avoid the problem of double taxation. Under these agreements, you only pay tax on your foreign income once in Australia and you don’t have to pay any tax overseas. There are more than 40 countries now party to Australia’s double taxation agreement. If the country you’ll be working in does not have a double taxation agreement with Australia, your employer will need to compensate you accordingly as you’ll be taxed twice.
What if I'm a dual national?
Dual nationality can also pose problems when living and working overseas. If you are an Australian resident as well as a citizen of the foreign country you are working in, you’ll be subject to the laws of that country while you are there. As well as being bound by local laws regarding divorce and child custody, you could also be subject to military service, which is compulsory in a number of countries including Israel, Greece, Turkey and Egypt.
If you fail to report for service in such circumstances, you may face penalties, including imprisonment. If you are a dual national planning to work in a country where conscription is still practised, you and your employer should seek advice from the relevant embassy before you leave Australia.
Working holiday insurance for business travellers
Another form of traveller who requires working holiday travel insurance is the person who travels overseas in pursuit of business or who is sent overseas by their employer or invited to work for an overseas company for a set period of time.
In the case of the independent business person, they would need to take out business travel insurance on their own behalf, while in the case of the employee, the amount of insurance they might need would depend on the amount of cover being supplied by their employer.
Business travel insurance differs from normal travel insurance in that it provides additional cover for business-related risks such as:
- Loss or damage of expensive business equipment
- Repatriation and replacement of an ill or injured staff member
- Extra territorial workers compensation
- Corporate travellers family care
- Losses incurred due to identity theft
To save on costs, companies who do a lot of business overseas will often take out annual business insurance that covers a number of their employees for multiple trips within a 12-month period.
Travel insurance for the UK and Europe
If your working holiday is taking you to Europe or the United Kingdom, there are some specific things you will need cover for in your working holiday travel insurance. These include:
- Skiing and snow sports. There are extensive opportunities to enjoy winter sports in Europe, so make sure you are covered before you are tempted to strap on the skis.
- Scooter and motorcycle riding. This is a very popular means of transport in countries such as Italy and Greece, but you won’t normally be covered in the event of an accident unless you take out additional cover.
- Hire car excess. Rental cars are a great way to get around in Europe, but if something happens to the vehicle, you will have to pay a large excess unless you take out additional cover on your working holiday travel insurance policy.
Travel insurance for Asia
Six of Australia's Top 10 favourite international destinations are in Asia and many of us head there on our working holidays as well. Particular risks to insure against when headed for Asian countries include:
- Motorcycle and moped riding. In many Asian countries this is the main form of transport, so it’s crucial to make sure you’re covered in case of accidents.
- Medical and hospital cover. Much of Asia has a tropical climate and diseases such as malaria are rife, so as well as having all your vaccinations, you should ensure you have adequate medical cover in your policy.
- Political evacuation. Some countries in Asia have unstable political systems, so being covered for emergency evacuation in the event of political upheaval would be wise.
- Natural disaster. Earthquakes, tsunamis and typhoons can all pose a threat in Asia, so it would pay to be covered for emergency evacuation in these instances as well.
Travel insurance for USA and Canada
While travelling in the USA and Canada is relatively safe, there are two main areas where you should ensure you have adequate coverage in your working holiday travel insurance. These are:
- Medical and hospital cover. The USA has one of the most expensive healthcare systems in the world, with a hospital bed costing anything up to $24,000 a day. Australia has no reciprocal healthcare agreement with the USA or Canada, so if you become ill or injured there, you could be facing an astronomical bill. Make sure your working holiday travel insurance provides unlimited medical and hospital cover.
- Personal liability. While Australia is still in its infancy with regard to personal litigation, the USA and Canada are all ‘lawyered up’, so to speak. Make sure your working holiday travel insurance includes personal liability cover to protect you from claims involving injury to other persons or damage to property.
Overseas study travel insurance
If you’re studying overseas for any length of time, you may find you need to take a part time job to support yourself. In this case, you would be wise to have overseas study travel insurance that covers employment situations.
As a student, you may be able to reduce the cost of your insurance by excluding items you will probably not need such as snow skiing or scuba diving cover. However as a student you may also need to make sure you have additional cover for the following circumstances which may be more likely to affect you. These include:
- Having to return home unexpectedly due to a death or illness in the family. This can be a common occurrence for overseas students, so having additional cover for flights and expenses incurred would be advantageous.
- Loss of money through theft, credit card fraud or identity theft. Some of the most common losses experienced by overseas students are related to their finances, so having additional cover for this can be a real lifesaver.
Many universities offer travel insurance to students studying overseas and while this can be a good option, it is not compulsory by any means. You should read the fine print and make sure it covers you in the particular circumstances listed here before considering taking out such a policy.
Apply for working holiday travel insurance
As can be seen, working overseas is a complicated business and how much insurance cover you will need depends on how long and for whom you are working and what kind of work you are doing. Therefore, to be certain you are covered in the event of a work-related accident, it is vital that you do your homework before you go and find the working holiday travel insurance that’s exactly right for you.
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