What is Domestic Travel Insurance and What is Available?

Whether it’s visiting family, taking the kids for a holiday, attending an important event or escaping to the beach or rainforest, many Australians love to travel in their own backyard.

According to data from Tourism Research Australia (TRA), there has been an increase of 7% in domestic overnight travel by Aussies for the year ending March 2018.

With these domestic trips on the increase, more Australians may be considering the need for travel insurance to help cover them for the unexpected while away from home in their own country.

So what exactly is domestic travel insurance and how does it work?

What is domestic travel insurance?

Domestic travel insurance is designed to provide financial cover for a range of unexpected incidents or accidents that could happen while you are travelling in Australia. Instances where domestic travel insurance coverage could assist you include cancelling pre-booked activities due to illness, losing your luggage in transit, or having your flights cancelled.

What does a standard domestic policy cover?

The exact coverage varies depending on your policy, but in general, domestic travel insurance can provide some financial protection for the following –

  • Lost, damaged or stolen personal belongings – to help make the claim process easier, make sure to have proof of purchase for expensive items, such as a laptop. Also, be mindful of your policy’s limits per item. For example, if you have a $500 camera and it is stolen, your domestic policy may only cover up to $300 for replacement. Some policies may allow you to increase the limit on an item by paying an additional premium.
  • Trip cancellations – this can help cover the costs associated with cancelling your flights, tours, accommodation, or other plans, due to unexpected events such as illness, accidents, natural disasters, or cancellation of pre-approved leave.
  • Rental vehicle excess – if you choose to hire a vehicle and take out insurance with that provider and that vehicle is damaged or stolen while in your care, some domestic insurance policies may be able to help cover part or all of the excess charged by the rental company.
  • Legal liability – some policies will provide some protection if, due to your negligence, you’ve unintentionally caused damage, loss or injury to a person or their property. The person in question cannot typically be a member of your family or travelling party, nor can the property be owned by them or be under their control.

The level of cover, exclusions, and excesses will vary between polices. Read the terms and conditions and the Product Disclosure Statement (PDS) of each policy before deciding what is right for you.

The following table shows a snapshot of domestic travel insurance policies in the Canstar database, available for singles under the age of 70, with links to providers’ websites. The results are sorted by Star Rating, then by provider name (alphabetically). Check upfront with your provider and read the PDS to confirm whether the policy you are considering is suitable for your particular trip, and whether it meets your needs, before committing to it.

What does domestic travel insurance NOT cover?

Domestic insurance policies generally will not provide cover for medical expenses incurred within Australia. However, for Australian citizens and permanent residents, you can use your Medicare card or private health insurance (if you have it) to help cover some, or all, of the medical costs involved.

For international visitors on a student or working holiday visa, you may be able to claim certain medical costs under overseas student health cover (OSHC) or working visa health cover policies, which are available through various Australian health funds. Some non-residents may also be eligible to take out Medicare if they are from a country that is part of a reciprocal healthcare agreement with Australia.

As with most insurance policies, there are also some general exclusions to be aware of. Some you may find in a domestic travel insurance policy include breaking the law, being under the influence of alcohol or illicit drugs, not disclosing a pre-existing condition, not taking reasonable steps to protect your belongings, or ignoring official warnings or advice. Exclusions may also apply to equipment for activities such as skiing or golfing. If you plan to take these on your trip, let your insurer know in case you need to take out additional cover.

Check for the exclusions in the PDS of each policy.

Do you have to be a certain distance from home for domestic travel insurance to be valid?

Domestic travel insurance policies may require a certain distance between your residence and travel destination. The distance required will vary depending on the policy, so it is a good idea to check with your chosen provider.

What is the difference between domestic and international travel insurance?

A key difference between the two is that domestic travel insurance is available for those travelling at home in Australia and international is for those travelling overseas. There is also a difference in the coverage offered by these two types of insurance policies. Most international travel policies will include a fixed amount of cover for overseas medical, dental and hospital expenses while domestic policies generally exclude these benefits altogether.

What if you’re on a cruise?

domestic travel insurance
Cruise cover is rarely included in domestic travel policies. Source: View Apart (Shutterstock)

Some insurers offer cruise cover as an optional extra, as most standard domestic policies do not include it. This extra cover could be used to pay medical expenses incurred onboard, as Medicare and private health insurance will not be available when the cruise ship is away from an Australian port.

It may also be used to cover cruise cancellation costs, or for property which is lost, stolen or damaged while onboard. If you plan to do activities on the ship or at different ports, particularly ones that may be dangerous in nature, check to see if your cruise insurance will cover it.

What if you’re on a road trip?

Using a rental car

If you are driving a rental vehicle on your road trip, have taken out insurance through the rental company and you’re involved in an accident or the car is stolen while in your care, some domestic travel insurance policies may cover you for some or all of the rental vehicle excess. Rental vehicle excess insurance may also be available directly through the rental company, or offered as a complimentary feature through some credit card providers.

Using your own car

All vehicles registered in Australia will need compulsory third party insurance (CTP), which provides protection against claims for compensation if you injure or kill someone in a car accident. Each state will have specific conditions around this type of insurance.

In addition to CTP, there are also a range of optional car insurance policies available in Australia, from third party property to comprehensive. If you are driving your own vehicle around Australia, it might be a good idea to consider purchasing one of these optional policies to help cover the costs associated with damage to other people’s property or their car, harm to the driver of your car, or damage to your car, including accident and theft.

Some insurance providers also offer caravan, motorhome and camper trailer insurance. The benefits, exclusions and levels of car and caravan insurance differ based on each policy. Read the Product Disclosure Statement (PDS) and terms and conditions before making a decision.

Can you get a domestic multi-trip policy?

Most travel insurance providers will offer domestic multi-trip policies, which can cover you for unlimited trips in Australia within a 12-month period. These policies often stipulate a maximum duration for each trip taken.

Some insurers will also allow you to purchase a multi-trip policy which includes both domestic and international trips.

Check with your insurer to see what they can offer. Consider the benefits and exclusions of each policy before purchasing.

Cover image source: lassedesignen (Shutterstock)

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