General insurance - types of cover
Specialist brokers offer all kinds of general insurance policies, but the ones of most interest to expats are:
- Motor – Standard motor insurance policies are country specific, so if you drive move to another country, you need at least the minimum legal cover required there.
That means taking out local cover or an international policy designed for expats
- Home – Insuring your furniture and belongings for an international move means relying on cover provided by shippers that might not meet your needs.
After the move, whether you buy or rent, you need to safeguard that same furniture and belongings
- Gadgets – Technology is taking over many people’s lives and that means they travel with a stack of expensive gadgets, like smartphones, cameras, tablets, computers and games consoles.
Many motor and home policies offer limited cover for technology, so a standalone top-up is often an option.
Always keep track of how much your valuables are worth and make sure this is reflected in your home insurance. Keep photographs and estimates to prove your claim. Update them every couple of years to account for market changes, wear and tear and inflation.
Expats can’t rely on their UK cover
Relying on protection offered by British life cover or general insurance is not an option for expats.
All but a handful of policies will stipulate that cover is restricted to the UK except for limited circumstances, like taking a holiday overseas.
That’s because the risk and costs of cover are assessed against the odds of the insured events happening in the UK, not in another country.
Taking travel insurance as a safeguard against falling ill while overseas is an example. Travel insurance is the right product for a tourist or businessman making short trips abroad, but excludes cover for someone living in another country.
Trusting medical care to a European Health Insurance Card (EHIC) is also fraught with problems. An EHIC offers free or low-cost treatment but will not cover the cost of medical evacuation, which can run into tens of thousands of pounds.
Why expats need life insurance
Expats should top-up their life insurance even if they have cover from their employers because they often find out too late that they have no insurance if they lose their job.
They may have protection for them and their families while they are in a post, but this evaporates once they are no longer an employee.
That could leave expats facing medical bills and repatriation costs of thousands of pounds.
Ask an independent financial adviser who has no connection with the employer to look at the on-the-job cover and how much taking out a life insurance top-up policy might cost.
Buying other personal insurance, like life cover with critical illness and income protection is also worth considering.
How much life insurance does an expat need?
This depends on personal circumstances. Every expat and their family needs a bespoke solution and the blend of events covered and how much is paid out to settle a claim should reflect this.
Cover also depends on what type of expat you are.
Someone moving around as contracts and assignments change probably needs a portable policy that updates with each move.
Expats moving permanently to a new location can take country-specific protection.
To work out the level of life cover or income protection you need, list your outgoings and any extra costs you think you might have to pay if you are seriously ill.
The goal is to maintain your standard of living if you suffer a serious illness or die suddenly.
Consider these factors:
- How much money would your family need each month to maintain their lifestyle?
- How much would you need to clear the mortgage so they could stay in their home?
- Do you need extra to cover the costs of private schooling and university?
- Would your spouse or partner need to pay for help to run the house and look after the family?
- If you were seriously ill, would you have to pay to make your home accessible?