Travel Insurance - February 8th
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What is travel insurance?
Travel insurance is insurance cover for emergencies or accidents that might happen to you or your belongings while you are on a holiday away from home. Travel insurance will cover you for different things depending on whether you are taking a trip within Australia or overseas (see types of travel insurance).
Why do you need travel insurance?
A study by Expedia shows that a massive 83% of young Aussies aged 18-24 plan to take an international holiday in next 12 months. Travelling overseas has become more affordable, with Expedia?s data showing international air ticket prices have declined by 20% over the last three years, driven by increased competition among low-cost airlines. But could you afford it if something went wrong while you were in another country?
The Australian government?s Smart Traveller website recommends travel insurance for anyone taking a trip away from home, especially to overseas destinations. If you don?t have travel insurance and you lose your luggage or have an unexpected accident, medical emergency, or legal incident, you and your family will have to pay for all the costs on your own.
Things like changing flight plans can be expensive, but hospital bills are even worse. There?s no Medicare overseas, so a medical emergency can cost you thousands or even hundreds of thousands of dollars – and chances are you have not brought that much money with you on your trip.
If you have travel insurance, on the other hand, you can travel confidently knowing you can get financial help in an emergency.
What else should you do before you travel?
For overseas travellers, you should also check the Smart Traveller Travel Advice page to see what the risk of travelling to your chosen countries is. If a country is flagged as “do not travel” be aware that you may not be able to obtain insurance for the trip.
Next, you should register your travel plans with the Department of Foreign Affairs and Trade so that someone knows where you?ve gone and how to reach you in an emergency.
Also make sure you have a copy of all your documentation with you – and that you leave a copy of all your documentation with someone back home.
Also keep on hand the contact details of the Australian Embassy in your country of destination – just in case you need it.
There are two types of travel insurance cover policies.
1. Domestic travel insurance:
According to Tourism Research Australia, domestic tourism is worth almost $70 billion, and about 70% of the tourists traipsing around the country are Aussies. Instead of leaving the country, Australia has become the most sea-loving nation in the world. In 2014, a record high 4.2% of our population took a cruise around the beautiful Australian and South Pacific seas and shores.
Our Canstar Blue research in 2014 showed that 41% of domestic travellers loved a beach holiday in Australia, while 30% preferred urban city destinations. The largest number of people wanted to visit sunny Queensland (39%), followed by Victoria (20%).
Plenty of us are travelling “at home”, but that doesn’t mean that nothing can go wrong. It’s definitely still worth taking out insurance in case you get stuck.
2. International travel insurance:
Aussies have always been keen nomads, and we’re travelling more than ever before. According to the most recent Australian Bureau of Statistics (ABS) figures, Australian residents took almost 9.2 million short-term overseas trips in the year ending June 2015, compared to 9 million in the previous year.
Our most common destinations this year were New Zealand, Indonesia and the USA. We’re also partial to the UK, Thailand, and China. One thing these unique and fascinating destinations all have in common is the fact that your trip there is safer if you go with travel insurance!
What does domestic travel insurance cover?
What does a domestic travel insurance policy usually cover you for?
What is not covered by domestic travel insurance?
One thing domestic travel insurance does not include is medical cover. However, that’s not a big problem because as long as you’re in Australia, you can still use your Medicare and private health insurance if you have it.
Domestic travel insurance policies also typically exclude certain “hazardous pursuits” from your coverage. If you’re doing dangerous activities on your holiday like skiing, scuba diving, bungee jumping or rock climbing, you need to disclose it on your application. However, even if you disclose it, you still might not be covered for an accident that happens because of that activity as it may be excluded from the policy. Ensure that you read your policy terms and conditions carefully.
What does international travel insurance cover?
What does an international travel insurance policy usually cover you for?
What is not covered by international travel insurance?
No travel policy will cover you for every single thing that might go wrong while you’re away, so it’s important to read your policy terms and conditions PDS carefully and know what is not covered.
Some common international travel insurance exclusions are:
How much does domestic travel insurance cost?
The good news is that the cost to insure your trip around Australia is relatively small compared to the cost of your overall holiday. The cost of domestic travel insurance depends on whether you are travelling as a single, a couple, or a family. It doesn’t matter where you’re going within Australia: the price is the same whether you’re going to Alice Springs or Adelaide.
Based on the domestic travel insurance policies analysed by Canstar, insurance for a single for a 5-day trip will cost around $49 on average, while a 10-day trip will be around $63, and a 21-day trip will be more like $86.
A couple can travel for less than twice that amount on average: $94 for 5 days, $120 for 10 days, and $162 for 21 days.
Amazingly, a family of two adults and two kids can travel for almost the same as a couple! On average, travel insurance will cost you $96 for 5 days, $120 for 10 days, or $166 for 21 days.
You can research how much domestic travel insurance would cost you on the Canstar website.
How much does international travel insurance cost?
When you compare it to the cost of your airfares, accommodation, and activities, travel insurance is a tiny add-on that could save you a lot of stress. The cost of international travel insurance depends not just on who you’re travelling with, but on the destination you’re headed for.
For a 10-day overseas trip, an Aussie single can expect to pay average travel insurance premiums of:
A couple could take out insurance for the same trip for:
A family could take the same trip for:
You can research how much international travel insurance would cost you for different destinations on our Canstar website.
What affects the cost of travel insurance
Several factors affect how much travel insurance will cost you.
TRAVEL INSURANCE GLOSSARY OF TERMS
Please note that these are a general explanation of the meaning of terms used in relation to travel insurance policy cover. Your insurance provider may use different wording and you should read the terms and conditions of your insurance policy carefully to understand what you are and are not covered for. Refer to the product disclosure statement from your provider.
Accident: An unexpected, unforeseeable, or unusual event that was unintended and caused loss or harm while you are on a trip covered by your policy.
Accommodation: Any type of dwelling or lodging that you pay a fee to stay in overnight.
Additional expenses: Additional expenses for accommodation and transportation that occur because of events such as illness, natural disasters, loss of travel documents, and transport union strikes.
Beneficiary: The person who would receive compensation from your insurance policy if you were to pass away during your travels.
Benefits: What your insurance provider gives you according to the terms of your policy. Benefits can apply if you make a claim or they can apply if a certain event happens, e.g. during an emergency.
Cancellation or amendment costs: The cost of cancelling, changing, or rearranging your journey because of unforeseen circumstances outside your control such as illness, accidents and extreme weather events.
Claim: A request for your insurance provider to pay certain expenses back to you in accordance with your policy.
Cover or coverage: The extent of protection given to you by your policy. If you are covered for an event, it means that you can claim back from your insurance provider a specified amount of expenses you incurred during that event.
Current market value: The amount of money you could get for an item if you sold it in the current local market. This amount is based on the original cost, the current condition and age of the item, and what it could be sold for in its present state.
Damage: Harm or injury to a person or property, resulting in the property losing value or not being able to be used properly.
Disability: A physical or mental condition that restricts a person?s movements, senses or activities. A disadvantage or handicap, especially one imposed or recognised by the law.
Emergency medical care: Medical care that is needed in an unexpected emergency. This does not include any type of regular medical care or foreseeable medical needs.
Endorsement: Any special condition listed on your insurance policy as an extra reason for you to buy the policy.
Excess: The excess is an amount that you pay instead of the insurer, e.g. “the first” $250 or $500 of a claim. Insurers usually have either a policy with different excess options that you choose between, or separate policies that each have a different excess amount. You can pay a lower premium if you have a higher excess, but you need to be sure that you could afford to pay the excess unexpectedly if you had to make a claim.
Exclusions: Anything that is not covered by your policy. Common exclusions include travel to high-risk countries, dangerous activities such as bungee jumping, risky behaviour such as taking alcohol or drugs, pre-existing medical conditions, and loss of items left unattended.
Existing medical condition: Medical conditions that you have recently had examined by a medical practitioner and/or received treatment for. Your policy will usually list a time limit for the condition to be pre-existing. For example, you have seen a medical practitioner within the past 90 days before you started your journey, or you have been prescribed a medication within the past 60 days.
Home: Your usual place of residence in Australia.
Incidental: Costs associated with an unexpected covered event, which are not directly related to the event.
Inclusions: Any event, item or expense that is covered by your policy.
Injury: Anything that physically harms you and occurs by accidental or violent means, which is covered by your policy.
Journey: One of the terms insurers use to talk about the period you?re covered for, from the time you leave home until the time you return to your home. Also known as a ?trip?, a ?voyage?, or ?your travels?.
Limit / Benefit limit: Policies have a limit on the amount of benefits you can claim per year or per journey.
Luggage and personal effects: Personal items that you own or carry with you on a trip that is covered. This includes but is not limited to: suitcase or backpack, clothing, jewellery, computer or laptop, music players, and other portable electrical devices or equipment.
Medically necessary: Medical treatment that is needed to preserve your health, is suitable to treat your symptoms, and can be safely provided in your current location. This does not include treatment or procedures that are performed in your current location because it is merely convenient.
Natural disaster: An event caused by nature and not by any human activity, including earthquakes, storms, bushfires and floods.
Overseas medical expenses: Expenses incurred overseas for ambulance transport, hospital admission, surgical nursing, and emergency dental treatment.
Period of cover: The time your travel is covered by your policy.
Personal liability cover: Cover for costs incurred for which you are legally liable. You are legally liable if your negligence causes loss or damage to someone else?s property. Personal liability also covers you for injury to a person who is not a member of your family or travelling party. Personal liability cover does not cover damage you caused deliberately or that breaks the law; damage caused by your business or your employee; your ownership or use of a vehicle, aircraft or watercraft; or you passing on an illness to someone else.
Policy: The travel insurance contract you have taken out with an insurance provider.
Refund: Cash or company credit that can be given to you as reimbursement for your expenses, according to the terms of your policy.
Rental car insurance excess: The excess charged if your hire car is damaged or stolen.
Resumption of journey benefit: The benefit you receive if you claim the expense of resuming your travels. You can make a claim if you had to return to Australia suddenly due to a serious injury, illness, or the death of one of your relatives or business partners in Australia.
Sudden illness or serious injury: Illness or injury that occurs during your period of cover and requires immediate treatment by a health practitioner.
Travel delay: Scheduled transport that is delayed by over 6 hours. Scheduled transport can include plane flights, trains, trams, buses, ferries or cruises.
Pre-existing condition: A condition that existed in any form before you signed up for the insurance policy, whether or not you had your symptoms examined by a health practitioner.
Premium: The amount you pay your insurance provider for your travel insurance cover. Your premium must be paid on time for your travel to be covered.
Reasonable: When associated with an expense or cost, ?reasonable? refers to what is usual, needed, and matches the standards of your previously scheduled travel.
Unforeseen: Any circumstance that is out of your control. This can include illness, accident, cancelled flights, or natural disasters.
Everyone knows you can have an amazing holiday on a budget, and travel insurance is no different. However, you want to be sure that your policy is going to cover everything you could need during an emergency on your holiday.
Not all travellers are the same or have the same requirements. Canstar assesses travel policies designed for the three most common traveller profiles:
Ratings and awards Canstar gave to travel insurance providers
Canstar’s most recent travel insurance star ratings report (2015) compared 229 domestic and international travel insurance products from 73 insurance providers, and determined which ones offer outstanding value for travellers.
Domestic travel insurance policies we gave a star rating were required to cover the following basic features:
International travel insurance policies we gave a star rating were required to cover the following basic features:
Canstar also granted two awards for outstanding value for Domestic Travel Insurance and International Travel Insurance. For insurance policies to be eligible for the awards, they must meet the basic features for domestic or international travel. Award-winning international travel insurance policies also had to cover $25 million or more of family cover for overseas medical and hospital expenses, and $5 million or more of family cover for repatriation and evacuation services.
In 2015 the award winners were:
Who offers travel insurance?
The following travel insurance providers were included in our travel insurance comparison:
Domestic Travel Insurance Providers
Our Ratings & Guides
General articles and guides