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KEY POINTS
- Canstar’s 2024 Travel Insurance Star Ratings research shows the cost of insurance is rising.
- Travellers are advised to compare travel insurance prices as they would for flights and hotels.
- Canstar investigates the effects of alcohol when it comes to travel insurance cover and confirms COVID-19 isn’t covered by 16% of providers.
The cost of living crisis could be clipping the wings of would-be holidaymakers, with jet-setting woes on the rise with news that one travel necessity just got more expensive.
Canstar’s 2024 Travel Insurance Star Ratings and Awards research shows the cost of travel insurance is rising, with prices on average increasing by $18 or 6% from $299 per policy in 2023 to $317 in 2024.
Families wanting to protect themselves and their belongings while overseas will experience the biggest cost increase, as family policy prices have risen on average by $25 compared to last year.
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| Average International Travel Insurance Premiums 2023 vs 2024 Rated Products | |||
|---|---|---|---|
| 2023 | 2024 | Difference | |
| Single | $195 | $204 | $9 |
| Couple | $356 | $374 | $18 |
| Family | $399 | $424 | $25 |
| Mature Single | $247 | $265 | $18 |
| Overall | $299 | $317 | $18 |
Source: www.canstar.com.au. Based on a selection of policies rated in both of the Canstar 2023 and 2024 Travel Insurance Star Ratings & Awards (November 2023, November 2024). Premiums include quotes for a range of destinations and travel periods, with a target excess of $200.
Canstar’s Data Insights Director, Sally Tindall, says that when it comes to holidaying overseas, travel insurance should be the second thing you cross off your packing list after your passport.
“If you need medical help overseas and you’re not in one of the 11 countries that have reciprocal health care agreements with Australia, you’ll be the one footing the bill – unless you have travel insurance.”
“In fact, some hospitals may not even let you in the door unless you can show them proof of insurance or you make a down payment of your own.”
“Insurance might be the last thing you want to shell out money for when booking a holiday, but it will be the first thing you thank yourself for having if you do need to make a claim.”
Why is travel insurance so expensive?
Although travel insurance can give you some much needed peace of mind while abroad, it’s another expense you’ll need to consider. There are several factors that influence the cost of travel insurance in Australia such as:
- High overseas medical costs: Popular travel destinations, like the United States of America and some European countries, have very high medical costs, when compared to Australia, and no reciprocal health care agreement in place.
- COVID-19 and other pandemic-related risks: Due to the rise of COVID-19, there is now an increased awareness that trip cancellations, medical evacuations and disruptions may occur while abroad due to infectious diseases.
- Natural disasters and geopolitical events: Natural disasters like earthquakes, cyclones and floods, as well as geopolitical events like civil unrest, can cause unexpected delays or cancellations to your trip. These related risks are taken into account and reflected in the prices offered by travel insurance providers.
- High claim rates: Overseas travel is very popular in Australia, especially since our country shares no land borders with any other. As a result, more Aussies take out travel insurance, and with that, claim numbers generally go up.
- Currency fluctuations: Due to economic conditions, the Australian dollar can rise or fall, which can reflect how far that dollar would go in other countries — especially those with already highly priced medical care.
- Broader Coverage: Higher priced comprehensive travel insurance covers travellers for more unexpected situations like emergency medical care, trip delays and cancellations, loss or theft of belongings, legal liability and repatriation.
- Age and pre-existing conditions: Older Australians and those with pre-existing conditions may face higher premiums due to the increased risk of claims.
- Customisation and additional add-ons: The cost of a travel insurance policy can increase depending on the additional features or coverage you require. This could come in the form of cover for rental vehicle excesses, kennels and catteries for your pets at home, adventure sports and activities, expensive items, travelling while pregnant, cruises, and even cover if you suffer a loss of income or a permanent disability while overseas.
You may be able to reduce your travel insurance costs by comparing travel insurance policies with Canstar, tailoring the insurance coverage to suit your needs, looking into annual policies (if you plan on travelling frequently) and considering a higher claim excess in exchange for a lower premium.
How drinking can impact your cover
Some holidaymakers may wonder how their travel insurance will be impacted if they consume alcohol during their overseas trip and find they need to make a claim.
Reviewing the policies on offer in Canstar’s database shows insurers typically exclude cover when a policyholder is under the influence of alcohol. Some providers will test travellers’ blood alcohol levels and deny claims if the result is over a certain limit. This is usually obtained from blood tests, if the traveller needed medical assistance at a hospital. Other insurers may rely upon a bar bill, witnesses and experts to establish intoxication.
This is why it’s important to be aware that if drinking in another country leads to a major medical event or other form of loss, you may not be covered.
How insurers are treating COVID-19
Canstar introduced COVID-19 considerations into its review of travel insurance policies in 2022 and 5-Star Rated policies must allow COVID-19 claims, which offers the comfort of quality cover at a competitive price.
However, when looking more broadly across the market, the research found of the 54 providers reviewed, 16.6% of providers don’t offer cover for COVID-19. It’s also worth noting that not all providers with cover for COVID-19 include cover for overseas medical and cancellation, with just 87% or 47 of the 54 providers covering policyholders for both.
Canstar’s research shows that there is on average just a $70 difference in cost between policies without cover for COVID-19 and policies that offer cover for both medical and cancellation. This added protection can give travellers some peace of mind as contracting COVID-19 while abroad can result in expensive medical costs or interruptions to travel as well as cancellation costs.
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| Average International Travel Insurance Premiums Products with and without COVID Cover | |||||
|---|---|---|---|---|---|
| Without COVID Cover | With COVID Cover | Difference (without vs both) | |||
| Overseas Medical | Cancellation | Overseas Medical & Cancellation | |||
| Single | $172 | $208 | $221 | $221 | $49 |
| Couple | $311 | $381 | $396 | $396 | $85 |
| Family | $351 | $432 | $456 | $456 | $105 |
| Mature Single | $245 | $267 | $283 | $283 | $38 |
| Overall | $269 | $322 | $339 | $339 | $70 |
Source: www.canstar.com.au. Based on policies rated in Canstar’s 2024 Travel Insurance Star Ratings & Awards (November 2024). Premiums include quotes for a range of destinations and travel periods, with a target excess of $200.
How to save an average of 27% on the cost of travel insurance in Australia
There is a way for holidaymakers to keep the cost of travel insurance affordable while still getting quality cover. Premiums for Canstar’s 5-Star Rated international travel policies are on average 27% cheaper than the rest of the market.
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| Average International Travel Insurance Premiums 5 Star vs Other Rated Products | |||
|---|---|---|---|
| 5 Star Rated Products | Other Rated Products | Difference | |
| Single | $156 | $211 | $55 |
| Couple | $292 | $385 | $93 |
| Family | $305 | $441 | $136 |
| Mature Single | $197 | $275 | $78 |
| Overall | $238 | $328 | $90 |
Source: www.canstar.com.au. Based on policies rated in Canstar’s 2024 Travel Insurance Star Ratings & Awards (November 2024). Premiums include quotes for a range of destinations and travel periods, with a target excess of $200.
Canstar advises travellers to compare travel insurance prices just as they would for other holiday essentials such as flights and accommodation.
Ms. Tindall says “while a single-trip travel insurance policy can sometimes cost hundreds of dollars, there are ways to cut down this expense. Canstar research shows a family of four could potentially save up to $136 just by comparing their options, without having to sacrifice on the level of cover.”
“Reducing your excess or opting for a lower level of cover can also help reduce costs but these options come with increased risks. Basic travel insurance typically does not include cover for cancellations, travel delays, lost luggage and all the other things that could easily upset your holiday.”
“That said, if it’s a choice between having cover for big medical emergencies and no cover at all, then having something is better than nothing.”
“Travellers booking their holiday months out from the departure date should consider taking out comprehensive insurance at the same time they book big ticket items such as flights and accommodation. That way if unexpected circumstances mean you don’t end up taking the trip, you may be able to make a claim and recover your losses – although it will depend on why you cancelled.”
Canstar’s 2024 Travel Insurance Star Ratings and Awards
Canstar conducted over 20,300 travel insurance quotes for 53 international and domestic insurance providers to determine those offering outstanding value to Australian travellers. The 11 Outstanding Value Award winners for 2024 are:
- International: Fast Cover, Huddle Insurance, InsureandGo, Southern Cross Travel Insurance, Tick Travel Insurance and World2Cover.
- Domestic: Qantas, Southern Cross Travel Insurance, Travel Protect and WAS Insurance.
- Seniors: Fast Cover, InsureandGo, Qantas and Southern Cross Travel Insurance.
- Cruise: Go Insurance, PassportCard, Qantas and World2Cover.
If you’re in the market for travel insurance, then you can compare travel insurance policies from over 50 providers with Canstar.
Additional reporting by Nick Whiting
Cover image source: Tijana Simic/Shutterstock.com
