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:
Cover for unexpected emergency expenses overseas
If you’re seriously ill or injured on your trip overseas, travel insurance can provide cover for the emergency medical transport and emergency medical treatment expenses.
Your travel insurer may also:
- Act as a financial guarantor for your overseas medical costs so the hospital will proceed with surgery or other emergency treatment.
- Cover your overseas hospital expenses and provide a daily cash allowance while you recover.
- Pay for accommodation for your travelling companions or family to stay nearby.
- Provide cover for the costs of overseas follow-up treatment or medications.
- Pay for an emergency flight home under medical supervision if required.
An experienced 24 hour emergency assistance team
Your travel insurance can also connect you with a 24 hour worldwide emergency assistance team who can provide travel advice and help in many different situations.
For example, they can:
- Assist you in an overseas medical emergency.
- Access interpreters in non-English speaking hospitals.
- Coordinate overseas emergency transport or medical evacuations.
- Direct you to the nearest Australian Government embassy or consulate.
- Relay messages to family members or your employer.
- Assist with arranging alternative transport or accommodation.
- Be contacted 24 hours a day, 7 days a week, 365 days a year from anywhere in the world.
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
- Pre-existing medical conditions such as asthma, diabetes or high blood pressure
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 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.
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.
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:
- You hurting yourself by acting irresponsibly, such as running with the bulls in Spain or challenging a professional Thai fighter in Thailand.
- Injuries you sustain while under the influence of alcohol or illegal drugs.
- 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.
- 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.
- Pre-existing medical conditions you failed to disclose when purchasing the policy, or which are not automatically covered by the travel insurer.
- Stolen belongings that were left unattended in public.
- 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:*
Tyler, an 18-year-old student from Byron Bay, needed more than $41,000 worth of medical assistance after a skiing accident on the slopes of Alpe d’Huez in France. He had to be medically evacuated to the nearest hospital where doctors discovered he had internal bleeding which required emergency surgery. Tyler and his friend Brodie shared a Comprehensive travel insurance policy which provided cover for the cost of the emergency ambulance, hospital bills, accommodation for Brodie to stay nearby, and their return flights home.
Carol and Vincent, a couple in their seventies, bought a travel insurance policy for less than $800 to provide cover for their dream 30-day worldwide cruise. A few days before they set off, Carol tripped over in her garden and broke her ankle, requiring surgery. They unfortunately had to cancel their holiday, but because they had Comprehensive travel insurance, they were reimbursed for their cancellation fees and lost deposits.
57-year-old Ian was over halfway through his bucket list hike in South America when he began experiencing symptoms of high altitude sickness. The Emergency Assistance team arranged Ian’s transport to hospital and a medical escort to assist him whilst in transit. Ian’s hiking tour may have been cut short, but his travel insurance policy, which cost under $250 for the two-month trip, covered his overseas medical expenses which in total costed more than $23,000.
David and his wife Laurel were on a two-week cruise around the Pacific Islands celebrating their wedding anniversary when David slipped on wet decking and injured his hip. His medical expenses, including the cost of having a registered nurse on the flight home, came close to $24,000. David and Laurel’s travel insurance policy cost less than $280 for the 15-day cruise and provided cover for his overseas medical expenses and return home.
70-year-old Diane could have been left with overseas medical bills totalling more than $29,000 if she hadn’t purchased travel insurance. Only two weeks into a two-month long cruise through Asia with her husband, Diane became sick. After an overnight stay in the onboard hospital, she had to be evacuated from the cruise and admitted to an intensive care unit to treat unexpected inflammation in her lungs. Once Diane was declared fit to fly, the Emergency Assistance team organised and covered the cost of her flights home under medical supervision with emergency oxygen.
How to save money on travel insurance
When it comes down to buying a travel insurance policy, it’s best to purchase 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 will also most likely be cheaper to buy travel insurance direct from the insurer rather than through a travel agent or tour operator!
5 steps to compare travel insurance deals
- Understand what you need cover for, such as pre-existing medical conditions or adventure activities like bungee jumping or snow sports.
- Compare a few insurance policies to see how much it will likely cost.
- Read the travel insurer’s Product Disclosure Statement (PDS) carefully, paying particular attention to the exclusions that will apply and the limits of each benefit.
- Confirm that there’s 24 hour worldwide emergency assistance included.
- Read reviews from other travellers online.
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.