Industry Voice: The increase in popularity of Gap Year travel insurance

A gap year has long been a rite of passage for many students, whether post-high school and heading to university, or between the worlds of graduating and starting a career. 

Either way, a gap year is a fantastic opportunity to broaden horizons and explore the world before the responsibilities of life take hold. It is something that, looking back, I would have thoroughly enjoyed – however, I ended up getting into the travel industry and seeing the world through multiple trips throughout my career!

The ‘grown-up gap year’

Particularly since the pandemic, we have noticed an increasing popularity for people in their 40s, 50s and beyond embarking on what we call a ‘grown-up gap year’. Many are either choosing to retire early and fund their trips from private pensions, or taking their tax-free 25 per cent drawdown and using it to take a sabbatical from their job. This doesn’t even have to be for a whole year: sometimes it is for anything from six weeks to a few months.

The fact is, backpackers are no longer twentysomethings, and nor is it mandatory to own a backpack. Some of them run very successful blogs where they document their adventures, and in fact there is a growing tribe of so called ‘digital nomads’ – essentially people backpacking around the world who work remotely and often document their lives and travels digitally as they do so.

We find that the requirements of this sector of the market are quite different from those of everyday travellers. For example, many younger clients want to do volunteering or plan to work in a bar or restaurant whilst travelling, and so it is vital for them that they are covered for this in their travel insurance policies.

Older clients may need to return home mid-trip so that they can keep an eye on children, their home, parents or pets, and so they of course need travel insurance that allows them to do this without voiding the cover.

Likewise, it is also really important that those who are well and truly bitten by the travel bug and decide to extend their trip can do so, as not all standard policies allow this. For this reason it was important to us that our backpacker insurance has the ability to be extended by up to five years whilst travelling, without the need to return home first.

It’s not only gap year travellers who need to make sure they are covered for more adventurous activities like kayaking, scuba diving, stand-up paddleboarding or bungee jumping, and we take pride in covering 92 activities as standard in our policies.

However, it is true that with wanderlust comes an increased spirit of adventure, so we also find we get requests for additional cover for activities like the ever-popular triathlon, or trekking up Kilimanjaro, as well as the more extreme sports such as bouldering (rock climbing without equipment), dog sledding and powerbocking (using stilts to perform extreme jumping, running and acrobatics)!

Where to be on your guard

When it comes to claims from our far-flung travellers, we recently analysed claims to uncover which destinations they are most likely to be victims of theft or robbery in. 

For our mainstream clients, Spain is by far the number one destination, based on our 2022 figures, whereas we found that Mexico is the number one place where backpackers are most likely to claim for theft. This is followed by Colombia, Peru, Indonesia and Argentina, with the US in sixth position. 

In seventh place is Brazil, where 4.5 per cent of claimed thefts took place, followed by Canada in eighth place and Costa Rica in ninth.

Top reported theft spots for gap year travellers

• 1. Mexico
• 2. Colombia
• 3. Peru
• 4. Indonesia
• 5. Argentina
• 6. US
• 7. Brazil
• 8. Canada
• 9. Costa Rica

Through our research, we noticed that theft and robbery were the most common crime-related claims made by our customers. They made up almost a third (32 per cent) of lost luggage claims, with the rest being for lost or broken items.

Through the data analysis, we also noticed that travellers are most likely to be targeted at transport hubs, while thefts from hotel rooms and hostels are rare.

By far the most frequent places where the thefts occur are in places like bus stations, railway stations or airports. We put this down to the fact that backpackers have the habit of putting their day pack on the ground and then a thief either steals it from behind the backpacker or causes a commotion elsewhere in the airport, station or car rental place, which causes people to momentarily look away from their belongings.

Whilst thefts from hotel rooms, in comparison, are rare, interestingly, we found that thefts from restaurants are actually higher than from hotels. However, it should be noted that thefts from hotels may be lodged by customers as losses, and not thefts.

The future of the gap year sector

Overall, gap year travellers and backpackers are an ever-growing sector of the travel insurance market. We have noticed that the general attitude towards travel has really shifted since the pandemic and we see more and more people of all ages making up for lost time with longer and more adventurous trips. I really don’t see this changing in the near future, especially as growing numbers of digital nomads take to the road.