A Guide to Buying Travel Insurance
Without question buying travel insurance should go hand in hand with booking your trip. It is just as important as remembering to check that your passport hasn’t expired.
Unfortunately, despite all of the fun that travel can bring, unforeseen circumstances can crop up no matter where you are and you need to be prepared for the unexpected. We’ve put together this list of travel insurance tips, questions and answers to help guide you through the process of booking travel insurance.
There are specific providers like Cover-More Travel Insurance who are offering Covid-19 cover. See more in our article about ‘Travelling During a Pandemic: Coronavirus Covid-19 Travel Insurance’. Hopefully this list will help you when trying to find the most suitable travel insurance Australia has for your specific travel needs.
Table of contents
- Travel Insurance Tips
- 1. Why Buy Travel Insurance?
- 2. Common Things That Travel Insurance Will Cover
- 3. Do I Need Domestic Travel Insurance?
- 4. When Should I Book Travel Insurance?
- 5. Where Should I Book Travel Insurance?
- 6. Will Travel Insurance Cover Covid-19 Related Expenses?
- 7. Where am I Travelling?
- 8. Will I Use My Travel Insurance?
- 9. Will My Travel Insurer Pay Out When I Need Them To?
- 10. What Kind of Activities Will I be Doing On My Trip?
- 11. Will I Be Taking Any Expensive Items With Me?
- 12. Do I Have Any Pre-existing Medical Conditions?
- 13. Travelling with a Disability?
- 14. Pregnant?
- 15. Check the Age Limits of Your Policy
- 16. What is A ‘PDS’ and Why Is It Important to Read It?
- 17. How Can I Save Money On My Travel Insurance Policy?
Travel Insurance Tips
1. Why Buy Travel Insurance?
Travel Insurance is a no-brainer. It is said that if you can’t afford travel insurance you probably shouldn’t be travelling in the first place.
Some countries even require you to have travel insurance before entering. And the Australian Government won’t cover any medical expenses that occur overseas so you can be hit with huge hospital bills and have to foot the bill of getting home. This can be in the order of hundreds of thousands of dollars. Surely you don’t need any more convincing after hearing that!
Other expensive things that can go wrong include possible trip cancellations, delays, lost luggage or even natural disasters and terrorism events. Having travel insurance and a covid travel insurance policy can help with these unanticipated costs. Make sure you always read the relevant policy information to make sure of exactly what is and isn’t covered.
2. Common Things That Travel Insurance Will Cover
Among the most common things travel insurance providers will cover are:
- Flight or tour cancellation
- Flight delayed more than 12 hours
- A missed connecting flight
- Forced cancellation of a trip before departure
- Lost / damaged / stolen luggage, cash or other items
- Medical treatment overseas
Many insurance providers like Cover-More Travel Insurance are now including some degree of Covid-19 Cover in their policies too but be sure to read the fine print. For providers offering specific travel insurance covid cover see our article about ‘Travelling During a Pandemic: Coronavirus Covid-19 Travel Insurance’.
3. Do I Need Domestic Travel Insurance?
While not as common as International Travel Insurance it is wise to consider Domestic Travel Insurance when travelling locally. Even though you mightn’t be overseas, you're still exposed to the possibility of similar unforeseen circumstances like lost baggage, cancellations or car hire collisions. These can be expensive. Why not take out cover to be prepared for the worst.
4. When Should I Book Travel Insurance?
It is best to book travel before you leave for your trip. But if you have left it a bit late some providers will still insure you once you have started your travel. Be sure to be completely transparent with your insurer (always). The sooner you book your insurance, the sooner you’ll be covered for any cancellations so really you should be booking it as soon as you know your travel dates.
5. Where Should I Book Travel Insurance?
There are various travel insurance providers including specific travel insurers, travel agents, insurance brokers (including health, home or car insurer) or credit card providers.
Travel insurance can be purchased online (directly from the insurer's website, from a comparison site or through an airline booking site), over the counter or on your phone. There are even travel insurance apps these days. You can see an extensive list of Travel Insurance providers in our post ‘Travelling During a Pandemic: Coronavirus Covid-19 Travel Insurance’.
6. Will Travel Insurance Cover Covid-19 Related Expenses?
Not necessarily. This is where it is very important to go over the fine details of your policy and your travel requirements when you take out your policy. Insurance companies have to provide a PDS (Product Disclosure Statement) and here you will find the exact details of your policy and what is covered. Please read this very carefully.
7. Where am I Travelling?
This is really important. It is critical that you look up your destination on the Government’s Smart Traveller website to make sure you’re aware of any risks, current safety advice, or ‘Do Not Travel’ alerts. These will affect your cover and it is your responsibility to check, not your insurance company.
You’ll need to get a policy that covers you for every country you’re travelling to, even if it’s only a stop-over. Not all travel insurance policies cover pandemics or epidemics such as SARS or Zika and not all policies cover you to change your plans due to a riot or civil unrest, for example.
8. Will I Use My Travel Insurance?
Hopefully not! But in reality approximately one in four people who take out a travel insurance policy make a claim. So it’s not wise to skip it as the odds are that you might need to use it. It’s a big risk not to take out a policy as overseas emergency expenses can be huge.
9. Will My Travel Insurer Pay Out When I Need Them To?
In the 2016-17 financial year, Australian travellers lodged almost 300,000 insurance claims. Around 85% of those received a payout. One of the most common reasons that claims that were declined was because the traveller had misunderstood the policy they'd bought*.
(*Source: Smart Traveller)
10. What Kind of Activities Will I be Doing On My Trip?
You’re going on a trip to have fun, right? Make some memories? Take some selfies? But some people’s version of fun is a little riskier than others. Some activities are deemed high risk and might not necessarily be included in a travel insurance policy. For example hiring a scooter, skiing, paragliding, bungee jumping and so on. Your insurance provided should have a list of activities that are included in your insurance and those that you'll have to pay extra for.
Also, an important thing to note is that if alcohol or drug intake is the cause of, or a factor in, an adverse event, it won't be covered by your policy. Just something to keep in mind when you’re out having fun.
11. Will I Be Taking Any Expensive Items With Me?
If you are taking any particularly valuable items with you like a computer, expensive jewellery or a camera, you may need to take out extra cover so that these items are covered if they are lost, stolen or damaged. Policies can also vary when it comes to how they cover valuable items. For example, items in your check-in luggage often aren't covered, and if you have items stored in your hire car they may not be covered. Also baggage left unattended is never covered, which can include a bag that is stolen while you're looking the other way. All the more reason you need to take a close look at your policy fine print to make sure everything you are taking is sufficiently covered.
12. Do I Have Any Pre-existing Medical Conditions?
Pre-existing medical conditions may not be covered in your policy. If you have a medical condition it is really important to discuss this with your insurer. You’ll need to ask whether they'll cover your condition automatically or whether you need to do an assessment.
Pre-exisiting medical conditions can range from allergies or asthma through to diabetes, heart conditions and knee replacements and anything in between. If you are in any doubt, declare your condition to your insurer. You don’t want to be caught short if the unexpected happens.
Something important to note is that many travel insurers won't provide cover for hospitalisation, medication or missed travel caused by a mental health condition. Others may provide cover if you declare mental illness as a pre-existing condition but you may be required to pay a higher premium. So please check the PDS carefully. If they discover it was a pre-existing condition you didn't declare, your insurer is highly unlikely to pay.
13. Travelling with a Disability?
There is no reason having a disability should prevent you from buying travel insurance, but it might make finding a suitable policy a little more time consuming and possibly more expensive. Depending on the insurer, disability may or may not be considered a pre-existing medical condition. Many insurers will automatically cover travellers with limited mobility, cognitive impairments or vision/hearing impairments, but in some cases this cover may come at an extra cost. As usual it is best to check with the insurer, as some situations will need to be reviewed on a case-by-case basis.
Very importantly, the Disability Discrimination Act ensures that insurers must assess the actual risks, rather than make assumptions about disabilities. Sometimes insurers may require a letter from a medical professional.
Check the fine print of your policy to make sure you don’t need to take out extra cover for things like wheelchairs, mobility aids or hearing aids.
It is important to note that some travel insurers don’t cover pregnancy at all, let alone pregnancy complications. And if complications are covered it is often only until a certain stage of pregnancy, for example between 23 and 32 weeks depending on who the insurer is. Premature births with intensive care and treatment could end up costing hundreds of thousands of dollars so it is critical that you read the fine print of any policy in relation to this matter. You may be able to pay extra for cover or you might not be able to access cover at all. Check with insurance providers.
15. Check the Age Limits of Your Policy
Most policies have an age limit and older travellers can get caught out with higher premiums, higher excess amounts and some restricted conditions. This is another reason to check through the conditions of your policy carefully and read all of the fine print.
16. What is A ‘PDS’ and Why Is It Important to Read It?
A Product Disclosure Document or ‘PDS’ is a very important document and will be your best friend when choosing the right travel insurance policy for your circumstances. It is a detailed outline of everything the policy does or does not cover including applicable cover amounts, etc. Important things to look at in the PDS include the table of benefits, the policy cover, general exclusions, pre-existing conditions, the word definition table and the claims section. A common reason for claims to be denied is when someone has misread (or not read) a PDS.
17. How Can I Save Money On My Travel Insurance Policy?
Here are some tips to save a few dollars when booking your travel insurance.
- Don’t wait until the last minute. The earlier you take out your policy the sooner you’ll be covered… for the same trip. You’re covered as soon as you take out the policy so you might be able to claim for any unexpected events prior to departure even if it is in the months prior. More bang for your buck, right?!
- Try booking online. Some insurers offer cheaper policies online but make sure they are an authorised and reputable insurer. You can see a list of providers in our article ‘Travelling During a Pandemic: Coronavirus Covid-19 Travel Insurance’.
- If you book with an insurer you already have a policy with you might have access to a multiple-policy discount, so check and see if any of your car, house or health insurers offer travel insurance as well.
- Make sure you compare lots of policies to find the best one for you. You might be able to find the same product for less with different providers.
- Check to see if your credit card already has travel insurance included. You might have access to travel insurance through your credit card provider without even realising it.
- Emergency Consular Assistance – The Australian Government provides a 24 hour consular emergency assistance. Call +61 2 6261 3305 from overseas or 1300 555 135 from within Australia
The Smart Traveller Website is provided by the Australian Department of Foreign Affairs and Trade and is an important resource for any traveller.
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