Travel insurance

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Nothing ruins a holiday or business trip faster than lost luggage or an unexpected accident. Having insurance cover won't prevent things from going wrong, but it can make things much easier if you get into trouble.

What does travel insurance cover?

Smart tip

Before you pay to reduce the excess on your hire car insurance, check your travel policy. You may already be covered.

This type of insurance typically covers:

  • Medical expenses from personal injury or illness
  • Loss of luggage or personal items
  • Theft
  • Disruptions to your travel plans (e.g. cancelled flights, though it pays to check exactly which situations are covered)

Urgent medical treatment, in particular, can cost you a lot if you don't have travel cover.

What's not covered

Travel insurance usually does not cover:

  • Injury from extreme sports (e.g. bungee jumping or white water rafting)
  • Illness or injury caused by a pre-existing medical condition
  • Pregnancy related costs, not all insurers will automatically cover women over 22 weeks gestation
  • Loss or injury from acts of terrorism, war and some natural disasters
  • Loss or theft of unattended luggage, check your insurer's definition of 'unattended'
  • Claims for travel to areas where an official travel warning has been issued, keep an eye on travel warnings and news for your destination in the lead up to your trip
  • Losses incurred due to the financial failure of an airline, hotel, other travel operator, or your travel agent.

If you're about to travel overseas, travel insurance should be an essential item on your trip checklist, however, you need to read the product disclosure statement (PDS) to find out what's covered and what's excluded, especially if you're planning any unusual activities or you have any pre-existing conditions. Cover can differ between insurers so don't be afraid to shop around for the cover you want at a price you can afford.

Case study: Rhys's unattended bag

""Rhys was waiting at a bus terminal in Los Angeles when his bag was stolen. He lost all his clothes and other personal items. 

When he made his insurance claim he told them that his bag was stolen from a bench while he was in a nearby newsagent.

They rejected his claim because it was classified as being 'unattended'.

How to choose travel insurance

You will pay an upfront premium to cover you for a set period of time. You can also purchase an annual travel policy if you travel often.

Some credit cards provide travel cover under certain conditions. Find out more about credit card travel insurance.

On top of the premium, you may have to pay an excess if you make a claim. Make sure you know what the excess is, and when it's payable, before choosing an insurer.

When choosing a travel policy find out:

  • The cost of the premium and any excess applicable to claims
  • What's included and what's excluded
  • The dollar limits for claims on individual items and as a whole
  • What proof you need to make a claim
  • How to contact your insurer if you are overseas
  • What paperwork you need to take with you on your holiday

Some airlines offer you insurance when you're buying tickets online. It may seem convenient, but it's smart to make sure the cover suits your needs and the cost is competitive, before you agree to purchase. Also watch out for websites that automatically select travel insurance for you, especially if you're travelling domestically.

Video: Tips on travel cover

Video about travel insurance

The Know Risk website explains what travel insurance usually covers and what might be excluded.

Transcript: Tips on travel cover

Why you need to be honest

Be honest about the activities you have planned and any personal circumstances that could affect the cover you need. Exclusions often apply to 'at risk' activities like parachuting, abseiling, riding a moped or motorbike, as well as any injury sustained while under the influence of alcohol or drugs or as a result of a pre-existing medical condition.

You should let your insurer know of any changes in your circumstances before or during your travels, as this may impact your cover.

If you do need to lodge a claim, be completely honest about events and any mitigating circumstances. You want to receive what you're entitled to under your policy but there are serious consequences for making a false claim.

Case study: Sarah's heart attack

""

When Sarah was planning a skiing holiday in New Zealand she took out travel cover in case she got injured or any of her possessions were lost or stolen. Sarah sometimes suffers from an irregular heartbeat (arrhythmia) but she was relatively young, very active and wasn't taking any medication so she didn't think her travel insurer needed to know about it.

Five days into her holiday Sarah suffered a mild heart attack on the ski slopes and had to be hospitalised. When she tried to claim back her medical expenses, her insurer denied her claim on the basis that she had failed to disclose a pre-existing medical condition.

If Sarah had disclosed her condition she may have been able to get cover, for an additional premium, and would have been reimbursed for all her medical expenses.

Making a claim

Smart tip

Before you leave home, take photos of any expensive items you're taking with you, record the serial numbers, copy purchase receipts and make sure they're covered under your policy.

Register your claim or inform your insurer that you intend to make a claim as soon as possible. Some insurers require you to inform them of incidents within 24 hours.

Your insurance policy should include the policy number, details of what is covered and contact details of the insurer for assistance. Always keep a copy of your insurance policy with you when you are travelling.

Preparing a claim

Your claim is more likely to be accepted if you have the relevant documents:

  • Proof of travel - to verify the details of your trip, e.g. flight details, itineraries and hotel confirmations.
  • Doctor's report - to prove you become sick or injured while travelling. Written confirmation should be provided by a qualified member of the medical or dental profession.
  • Police report - if something was stolen, you were injured in an accident or you were the victim of a crime, your insurer is likely to ask for proof that the incident was reported to the police.
  • Valuations and proof of purchase - to prove that you own the item that was lost or stolen and verify how much it cost. This applies to items you've brought with you on your trip and anything you purchased along the way.

Don't forget to keep a copy of your claim that includes all the attachments and proof of submission (like your sent email or registered post details).

Making a complaint

If you've lodged a travel insurance claim and it's been rejected by the insurer, there are things you can do if you think you've been treated unfairly.

  • Lodge a written complaint with the insurer's internal dispute resolution department - Details of your insurer's internal dispute resolution process can be found in your insurance product disclosure statement (PDS).
  • Take your complaint to external dispute resolution - If you're not happy with your insurer's decision you can complain to the Financial Ombudsman Service (FOS). this is a free independent service and any determination they make is legally binding on the insurer.
  • Seek legal advice - If you are still unhappy with the outcome you may choose to seek legal advice. Be aware there is a time limit on further action. 

Travelling the world can be a great experience. Spending a little time to find the right insurance cover means you can spend less time worrying about something going wrong and more time just enjoying your trip!


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Last updated: 12 Oct 2016