How To Find the Best Travel Insurance For You – Forbes Advisor Australia

No one ever expects their dream holiday to go wrong, but if it does, travel insurance can make the experience much less stressful and expensive than it would have been. It can also help ensure that life-saving medical treatment can be accessed, and provide you with the necessary stop-gap funds to get your holiday back on track. While travel insurance can help guard against bad luck on the road, it will not cover sheer foolishness or any intentional harm you cause.

Generally speaking, there are three tiers of travel insurance coverage:

• Domestic travel insurance for travel around Australia.
• Basic international travel insurance, which usually only includes medical cover.
• Comprehensive international travel insurance which includes medical, cancellations, luggage and other aspects

According to statistics, things do frequently go wrong for Aussies overseas. One in four experienced an insurable event on their last overseas trip, according to a survey by Smartraveller, a travel advice website by the Department of Foreign Affairs and Trade.

Falling ill and needing to be flown home can result in a bill that sets yourself or your family back hundreds of thousands of dollars. That is why, for many people, the peace of mind of a travel insurance policy allows them to relax and enjoy their holiday — no matter what occurs.

Is Travel Insurance Really Necessary?

Many travellers regard travel insurance as necessary as their passport and wouldn’t leave home without it. In fact, some countries require it before you can pass their immigration gates, and some cruise ships won’t let you board the vessel without having a cruise-specific policy in place.

Furthermore, since the COVID-19 pandemic, a growing number of countries require travel insurance.

Be sure to check the requirements of the destination, as it is an evolving situation and approximately 50 countries require some form of coverage. For example, the 26 countries in Europe that make up ‘Schengen Countries’ may have specific requirements regarding what insurance their embassies will accept before issuing a visa.

Australia has reciprocal health arrangements with 11 countries, which means that it may be possible to access publicly funded healthcare. However, Smarttraveller recommends taking out travel insurance regardless because medical costs overseas can quickly run into tens of thousands of dollars.

Will Travel Insurers Pay Out?

In the 2016-17 financial year, Australian travellers lodged almost 300,000 insurance claims. Around 85% of those received payouts, according to CHOICE data. Of the claims that were declined, many were because the traveller had misunderstood the policy they’d bought.

Understanding what can and cannot be claimed will help ensure that you take out the correct policy. It pays to be an informed consumer.

What Does Travel Insurance Cover?

Travel insurance covers the costs in the event of something going wrong while travelling, and these costs could far exceed the price paid for insurance. The most common costs that travellers incur are cancellation fees, fees for changing travel dates and the costs associated with losing baggage.

Many travel agents also offer travel insurance when they sell flight tickets or tours, but it is also possible to buy a policy online. The main categories of travel insurance are for cancellations or trip interruption, baggage and personal effects coverage, medical coverage, and accidental death or flight accident coverage. The damage cover can apply to personal property or something hired, like a rental car.

Coverage also often includes around-the-clock emergency assistance, such as replacing lost passports, cash wire assistance, and rebooking cancelled flights.

According to Smartraveller, the most common insurable events are:

• Flight or tour cancelled.
• Flight delayed more than 12 hours.
• Missing a connecting flight.
• Receiving medical treatment.
• Lost / damaged / stolen luggage.
• Lost / damaged / stolen cash or items.
• Forced to cancel the trip before departure.

Medical Expenses

As mentioned above, Australia has Reciprocal Health Care Agreements (RHCA) with 11 countries for Medicare cardholders, however there are a number of exclusions that apply and it is not recommended that travellers rely on such arrangements in the event of sickness or an accident.

Canada and the US have the most expensive healthcare in the world. A single trip to the emergency room for a few stitches and some antibiotics can cost hundreds of dollars.

Similarly, in a developing country without adequate medical facilities, the costs of an emergency evacuation can run into hundreds of thousands of dollars, and of course, lacking treatment can be life threatening, so it is equally important to take out travel insurance no matter where you are heading.

Family Emergency

If a family member gets sick or dies while the insurance policy holder is travelling or before they depart, travel insurance can help recover the cancellation costs.

This could include pre-booked tickets and hotels, costs associated with returning home suddenly, or with resuming the journey at a later time. Always check the policy conditions, which define ‘relative and may apply certain limits with regards to age.

The death or illness must also be unexpected and not an underlying condition.

Personal Liability

This covers third-party insurance claims. That is to say, if a traveller does something that causes loss to someone else, such as accidentally damaging their property or causing an injury, they will be covered. It does not cover intentional harm.

Lost Luggage

This can prove highly inconvenient and costly, too, as many Australians have found in recent months as airlines have struggled to get bags to the right destination on time.

For the first 21 days, lost checked baggage is treated as delayed by the airline, during which time it is their responsibility to find it and return it.

What Is not Covered in Travel Insurance?

Insurers draw a line at providing cover for certain incidents or practices, such as high risk sports. According to their risk calculation, it simply is not financially viable for them to offer cover, either because the likelihood of an accident happening is too high, or the consequences too costly to pay for.

The following are common exclusions:

• Extreme sports such as skiing (although skiing may be possible as an ‘add on’).
• Leaving Your Belongings Unattended.
• Ignoring road rules.
• Travelling against Government advice.
• Claiming against an unapproved medical Condition. If you have a pre-existing medical condition or if you are waiting for test results or treatment but haven’t told the insurer, the policy may be void for any related claims.
• Engaging in reckless or dangerous activities such as heavy drinking and recreational drug use.
• Pregnancy. Some domestic travel policies won’t include pregnancy cover and those who do cover it will likely have strict conditions, such a single birth, uncomplicated pregnancy. The risk of complications, including giving birth, increases as you move towards the end of the third trimester.
• Cancellations – not all policies cover a cancellation, so make sure to read the fine print.

How to Choose the Best Travel Insurance

Answering the following questions will help determine which policy is adequate for your needs:

How long are you going for?

While experts recommended travel insurance for the shortest of trips, the reality is that the longer your stay, the higher the chance things can go wrong. It pays to factor this in when you are considering the level of coverage you require.

Where are you going?

Planning an idyllic sojourn through New Zealand’s wineries or are you trekking through the wilds of Borneo? It makes all the difference. For example, if your destination is home to a range of medical facilities that can treat injured travellers then that is much more reassuring than needing to be choppered out for medical aid. If you are entering a territory without sufficient medical services then it may pay to look for unlimited medical cover. Apply this lense to all facets of your trip and ensure you are covered for the right things, and at the right amount.

What activities will you be doing while travelling?

While many travel insurance providers won’t cover extreme sports, many insurers do offer these as more expensive add-ons to your policy. Some insurers will cover certain extreme sports, but exclude others. Once again: do your research and find a policy with an add-on that works for you.

Will you be taking any valuables?

Research from Allianz Australia revealed that while two in five (39%) do not feel comfortable leaving their valuables at home, the majority of Australians, 68%, do not plan to insure their valuables when they take them on holidays.

As Allianz noted, this may mean many are hitting the road with the contents of their suitcases sometimes worth more than the holiday itself. If you’re taking valuables with you check that you can insure them, as well as the terms and conditions.

You may even be covered by your home and contents policy, under ‘portable contents’, for any valuables you take with you. Once again: Check with your insurer.

Do you have any pre-existing medical conditions?

A pre-existing medical condition does not mean you cannot be insured for travel insurance. You just need to do a bit of research to make sure your condition is covered and what the requirements are. For example, you may require a medical assessment by the insurer before the policy applies.

Cruising or Roaming? Types of Travel Insurance Policies:

There is a range of different types of insurance policies to suit all itineraries:

Worldwide

A worldwide policy covers an international trip of more than one nation.

Single destination

For travellers visiting just one country.

Cruise

Cruise travel insurance provides cover in case of emergencies onboard the cruise ship, as well as on any shore excursions.

Backpackers

Backpacker insurance policies are generally offered and underwritten by  reputable companies, only they’re cheaper than a fully comprehensive single-trip policy. They focus on cover for the essentials, without all the bells and whistles. Some insurers are currently not offering backpacker policies due to the complicated health situation caused by the pandemic.

Working holiday

This will cover several types of work, including guide work (such as working as a tour guide, on bus tours or walking tours), manual work and non-manual labour. It will not cover hazardous work, such as work from heights.

Family

This policy will cover members of a family in the event that one family member’s illness leads to the entire holiday being postponed, for example.

Single

Different coverage levels are available for single travellers.

Activity cover

Certain activities can be purchased as add-ons to standard travel insurance, such as:

• Snow and ski
• Motorcycle
• Adventure

Annual Multi-trip

This is more economical for frequent flyers, as opposed to taking out a new policy for each individual trip. It typically provides coverage for unlimited travel over the course of a year. Some insurers are not currently offering this kind of policy due to the pandemic.

How to Make a Travel Insurance Claim

The majority of insurers nowadays allow for online claims to be made, rather than relying on paper-based forms. There is often a phone number that policyholders can call for emergency assistance.

Documentation will be required to prove the claim, and this may include medical and police reports, accommodation and tour details, and receipts for the expenses being claimed. In the event of a medical claim, the policyholder will pay the bill in full and then ask to be reimbursed.

Claim Denied: How to Make a Complaint

If you’re claim is rejected, there is recourse to challenge the decision if you believe it was not the right one. Complaints can be made to the Australian Financial Complaints Authority (AFCA)which handles a range of consumer complaints.