Travel Insurance Terms Explained
 

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Legal Expenses

So you're hot, excited and a bit drunk. Or you're generally just messing around. You jump into the pool and land on top of some random bloke. Unfortunately he is carted off to hospital to have your footprint removed from his back. He then can't work for 10 years, which is a mare as he has to support a wife and three kids. So, he sues you for compensation. He wins.

Let's say he was earning £40,000 per year and his medical treatment came to £50,000. 10 years x £40,000 is a minimum of £400,000. Add the £50,000, to make £450,000. As long as your personal liability is more than that, you are fine. If you have cover for £200,000, you will have to find the other £250,000.
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Stuff that backpackers tend to do include riding into people on mopeds, surfing over people, landing on people when jumping into water, etc. Sod's law also states that you will damage someone who earns a lot in a country where medical treatment costs a lot of money. So, how much do you need here?

Well, £1 million is your absolute basic. The case above of the bloke with kids is quite extreme, so in most cases going over £1 million would be quite difficult. You would probably read about the payout in the papers if it happened - that kinda thing. If you're going to America, where everyone sues everyone, and you are going to be doing stuff that puts others at risk, then consider £2 million.