What is Travel Insurance?
Travel insurance is cover for emergencies and unexpected events that have a financial impact on you before or while you are travelling. This could be you, a relative or a travel companion suffering illness or injury that leaves you with 'out of pocket' expenses. Alternatively damage, loss or theft of your luggage or belongings resulting in you being financially worse off.
There is also a non-financial support component to travel insurance which is emergency assistance. Emergency assistance gives you access to experts in an emergency situation to manage your medical situation, provide advice and arrange alternative travel.
Travel insurance can help with all sorts of scenarios. Below we highlight the Most Expensive items and the Most Common items that you can purchase cover for.
Most expensive scenarios covered by travel insurance
1. Medical Bills
Spending time in hospitals can be very expensive when you are not a resident of that country and the costs are not covered by the country's government or your private healthcare. It is not uncommon for surgery and a hospital bed to run into the hundreds of thousands. Having such a medical bill can have a huge impact on the individual and their family, with some having to sell their homes to pay the hospital bill if they don't have the right travel insurance to cover it.
Medical Evacuation by private jet with doctors, nurses and specialist equipment to transport you back to your home country. Costs for a Medivac can easily exceed US$100 000.
3. Repatriation of remains
Death of a loved one can come as a shock and be a devastating time in ones life. But when it happens in another country whilst someone is travelling, the circumstances can magnify the emotional turmoil you can suffer. It's hard enough arranging funeral arrangements at home, but dealing with another country's health and legal systems, especially in tragic circumstances can be very trying. On top of this, the logistics of bringing a body back home can be extremely difficult to navigate in a time when you just want to grieve. Travel insurance policies typically have a benefit that not only covers the repatriation of remains, but provides the experience to manage the process on your behalf.
4. Personal Liability
Different countries have different laws. You may not be aware of all these, you may not agree with them, but that is no defence if you if find yourself in a legal situation in a foreign country where you are personally liable for something. Cover in the millions of dollars is something that is normally provided by insurance so that you are not financially ruined by an unexpected event.
Most common events covered by travel insurance
We all love a holiday and we save up a lot of money to have once in a lifetime experiences. Sometimes life happens though and you or a loved one can become sick or injured which prevents you from travelling. With the costs of return flights, accommodation, tours, a cruise etc.
2. Lost or stolen luggage and personal items
Bags, sunglasses, camera, cash, hearing aids, mobile phones, laptops and anything you can think of are frequently lost or stolen on a holiday. Some items like a passport or credit card, can become a nightmare to go missing when travelling.
3. Medical Bills
It's not uncommon to end up at the doctor's when you're at home with the flu, an infection, rash or injury. The frequency of illness whilst holidaying can also be more than at home for a variety of reasons.
Food poisoning, influenza, falls resulting in broken hips or wrists, rashes, hay fever, sea sickness and other everyday medical dramas are all very common.
4. Damaged luggage
Luggage on planes and in transit often gets damaged and is a frequent problem. Annoying firstly because your bag is broken and then secondly a problem as you need a new bag to carry all your items for the duration of your holiday.
How to choose the right travel insurance for your trip
1. Finalise your travel details
Before you can get a travel insurance quote, you'll need to know the below details
- Your departure date
- Your return date
- The country or countries you will be visiting
- Will you be going on a cruise?
- Will you be skiing or snowboarding?
- Any activities you will be doing such as riding a motorbike
- Your age
- Your travel companions age(s)
- Any pre-existing medical conditions you or your travel companions have
2. Get a few travel insurance quotes
Now that you have the required information, it is good to get a number of quotes from different companies.
3. Compare benefits and benefits limits
Different companies and different policies offered by each company will have different benefits and have varying levels of cover.
You'll need to consider how much cover you want for each benefit. For example if you are spending $20 000 on hotels, flights and tours, you'll want at least a $20 000 cancellation benefit. Anything less would mean you would be out of pocket for a proportion of your trip if you need to cancel.
4. Compare prices
Once you have found a couple of policies that provide the right cover for your holiday, you can compare the price. This can be a worthwhile money saving exercise as prices can vary considerably.
5. Read the PDS
Before you make a final commitment, read the PDS to ensure you understand what you are buying and the policy covers everything you want it to cover for your holiday.
6. Check all the details
Once you have received your policy, double check all the details. If anything isn't right, contact your insurer to make the changes.
7. 14 day cooling off period
If you are not comfortable with your decision, you generally have 14 days as the industry standard to cancel the policy for a full refund as long as you haven't started your trip.
Top 10 Travel Insurance Tips
1. Make sure you buy a policy that covers your type of trip.
Are you going on a cruise or going skiing? Policies don't necessarily cover these types of holidays, so ensure your policy covers this type of trip.
2. Make sure you buy a policy that covers your activities.
If you plan on riding a motorbike or scuba diving or any other activity, ensure you are covered for the activities and know the rules. For example if riding a motorbike, you may need a motorbike licence in that country.
3. Ensure the benefits you are covered for are enough to cover you.
If your trip (flights, accommodation, tours) cost you $18 000, you may be out of pocket for the difference if you buy a policy that only covers you for $10 000 if you have to cancel your holiday.
4. Read the Product Disclosure Statement, also known as a PDS.
Yes it is a long and sometimes difficult to read document, but take the time to read and understand it so you know what you are and are not covered for.
5. Buy your travel insurance as early as possible
The earlier you buy your policy, the longer you have cancellation cover for.
6. If your policy comes with emergency assistance, use it!
Travel insurance isn't just about financial reimbursement of costs. It also comes with an emergency assistance phone number and highly skilled and experienced people in a crisis. If an emergency happens such as a car accident, your passports been stolen or you've been assaulted, call them. They can help you with the next steps and provide a reassuring voice in a difficult and stressful situation.
7. Be prepared to make a claim
Before you travel, make sure you have receipts or proof of purchase of all the items you are taking. If you don't have receipts, take photos of everything you are taking before you go.
8. Be honest and upfront about questions you are asked when buying insurance
When you are asked questions over the phone, in person, on a website or on a form, answer them openly and honestly. Companies ask you these questions so they can give you a policy that is right for you, so you are covered for your trip should something go wrong.
9. Stay in control
We all let our hair down when on holidays, we eat more than we should, we drink, we party, we do all sorts of crazy activities. Ask yourself, would I do this at home? If you wouldn't normally ride a motorbike, bungy jump, walk down a dark street at night or carry all your valuables on you at home, why in a foreign place that you are unfamiliar with that has different laws and safety standards, would you do it or try it for the first time.
You need to understand, if alcohol or drugs are a contributing factor in a claim, your claim will most likely be rejected under a 'General Exclusion'.
10. Be prepared, be careful and Travel Safe
Travel insurance is a great safety net, but the best result is, you go on holidays and nothing goes horribly wrong.
Take the time to plan your holiday so you don't have to be in a huge rush to make interconnecting transport.
Pack the right clothing, sturdy walking shoes (you'd be surprised how many people fall over on uneven pathways) and a first aid kit.
You're on holidays, you're in a different environment, take your time.
Check out our Travel Safe guide for some more tips on making sure you and your travelling companions come home the way you left.