Do I Really Need to Buy Travel Insurance?

Ask any travel insurer and of course they’ll be happy to list all the financial benefits travel insurance can provide.

But if you’re on a strict budget, only going on a short trip, or travelling somewhere you’ve been many times before, you might be wondering if you really need to buy travel insurance. After all, it can seem expensive and you don’t immediately appear to get anything in return.

However, if you ever do find yourself in trouble and need to use your travel insurance, it may turn out to be the best investment you’ve ever made.

What are the major benefits of buying travel insurance?

Travel insurance is an investment that essentially covers you for many of the potential risks you can experience as a traveller.

Even if you’re a seasoned globetrotter, you can never be sure nothing will go wrong on your next trip overseas or even on your domestic travel within Australia.

While it seems that the only tangible return you get for paying your premium is a reference number and a certificate with emergency contact numbers on it, these are actually two things that will prove immensely valuable in an emergency situation.

Travel insurance can provide the following benefits:

What should I look for in a travel insurance policy?

A travel insurance policy can provide cover for a wide variety of situations. The benefits you want to look for when buying travel insurance will depend on what kind of trip you’re taking and what’s most important to you.

Some benefits could be essential, like unlimited cover for overseas hospital expenses, emergency transport and medical evacuations.

Personal liability cover and repatriation costs are also important, and may even be a requirement for your working holiday visa.

Other travel insurers offer optional financial benefits which may be non-essential but handy to have. These may include cover for stolen credit cards and travel documents, or cancellation cover if something unexpected interferes with your travel plans like a family emergency or natural disaster.

If you’re planning to do any adventure sports such as skiing, snowboarding, skydiving, high-altitude trekking or scuba diving, you may want to look for a policy which automatically includes these activities. Otherwise, some travel insurers will offer an ‘Adventure Pack’ add-on or something similar to provide additional cover for more adventurous travellers, and also  a 'Motorcycle Pack' to cover you in case you're injured in an accident while riding a motorcycle, moped or scooter.

Similarly if you’re taking any expensive items or sports equipment such as a bicycle or surfboard, you may be able to insure them as specified items for an additional cost.

Another popular benefit is rental vehicle excess insurance. If you’re planning to hire a car while overseas or for domestic travel within Australia, you may also want to consider taking out additional cover for the rental vehicle excess.

How do I choose a travel insurance policy?

Comprehensive travel insurance generally provides the highest level of cover, but you should always compare the benefits of different policies to find the one which best suits you.

Step one of choosing your travel insurance policy is knowing what you need cover for. Generally, you’ll most likely want to have cover for:

• Overseas medical emergencies including medical evacuation (also called repatriation)
• Cancellation costs and lost deposits with transport providers, travel agents or tour operators
• Lost, stolen or damaged luggage or personal effects
• Lost or stolen passports and travel documents
• Personal liability cover
• Accidental death insurance
• Loss of income insurance
• Existing medical conditions

You’ll may also want to compare additional benefits such as:

• Travel delays
• Missed flight connections to special events
• Rental vehicle excess insurance
• Cover for adventure sports such as trekking or scuba diving
• Cover for riding a moped, scooter or motorcycle

Most travel insurers also offer various levels of cover, so you have a couple of different price ranges to consider as well.

For example, Fast Cover offers medical screening for your medical conditions and three different levels of cover:

Basic (Medical Only)

Basic or 'Medical Only' insurance covers overseas medical emergency and hospital expenses only, with the option to add on a limited amount of luggage and personal belongings cover.

Standard Saver

The Standard Saver option provides cover for overseas medical emergencies, unexpected cancellations up to a limit, and cover for loss, theft or damage to luggage and personal effects.

Comprehensive

The Comprehensive policy is the highest level of cover available. It provides the same benefits as the Standard Saver plan but with higher limits, plus extra benefits such as travel delays and special event transport expenses.

7 common travel insurance exclusions you didn’t know about

It’s important to know what you won’t be covered for in your travel insurance policy so that you don’t experience the disappointment of a claim being unexpectedly declined.

Although travel insurers are all different, most will generally not cover:

1. You hurting yourself by acting irresponsibly, such as running with the bulls in Spain or challenging a professional Thai fighter in Thailand.
2. Injuries you sustain while under the influence of alcohol or illegal drugs.
3. Claims that arise at a travel destination which is marked as ‘do not travel’ or ‘reconsider your need to travel’ on a government website such as Smartraveller.gov.au.
4. Injuries sustained while doing an activity that isn’t covered by your policy, such as unlicensed motorcycle riding or backcountry snowboarding outside of resort boundaries.
5. Existing medical conditions you failed to disclose when purchasing the policy, or which are not covered by the travel insurer. 
6. Stolen belongings that were left unattended in public.
7. Cancelling or changing your travel plans without a valid reason or because you simply don’t want to travel anymore.

Remember to read the 'General Exclusions' section in your travel insurance provider's PDS to check what you are and aren't covered for before purchasing a policy.

Why travel insurance is important

Disaster can strike anywhere at any time.

Even if you’re relaxing at your favourite resort in Bali for a short weekend getaway, on an IEC working holiday visa in a ‘safe’ destination like Canada or the United Kingdom, or taking your annual family trip to Europe.

The same goes for the style of holiday you’re taking. Regardless of whether you’re on a shoestring backpacker budget or flying first-class, travel insurance should always be factored into your pre-travel expenses plan.

As Smart Traveller says: if you can’t afford travel insurance, you can’t afford to travel.

If you're still unsure whether you really need travel insurance, consider the following travel stories which are based on previous Fast Cover claims:*

How to save money on travel insurance

When it comes to buying a travel insurance policy, consider purchasing directly from the travel insurer. That way you can ask for clarification on anything in the Product Disclosure Statement (PDS) you’re unsure about and get the right information. It’s important to know exactly what is and isn’t covered before you make a purchase.

It may also be cheaper to buy travel insurance direct from the insurer rather than through a travel agent or tour operator!

Don’t risk it, consider buying travel insurance before your next holiday

Travel insurance is important for domestic travel within Australia, but may be absolutely essential for international travel.

Even if you’re a seasoned traveller who behaves responsibly and doesn’t take unnecessary risks, you can never be certain something won’t go wrong on your next trip.

If you decided not to buy travel insurance and something did go wrong, you could be left significantly out of pocket and facing a scary, stressful situation.

Remember that the Australian Government cannot assist you with emergency expenses if you run out of money overseas, so if you didn’t have travel insurance to back you up, you’d be on your own.

As well as the significant financial benefits, travel insurance can also provide cover for emergency expenses and connect you to an emergency assistance team that is available 24 hours a day from anywhere in the world.

If you wouldn’t want to face an emergency and the costs it can involve alone, you shouldn’t risk travelling without travel insurance.

*Traveller details have been changed to protect their privacy. Claims examples are from Fast Cover travel insurance customers from 1 July 2013 to 30 June 2016.