Understanding travel insurance

Sometimes, despite all our efforts to prepare for a trip, things just don’t go to plan. From lost or stolen luggage to injury or illness, unexpected hiccups can leave you significantly out of pocket. That’s where travel insurance can come into play. Travel insurance can help cover some, or all, of the expenses associated with a trip being cancelled, missing luggage, and even hospitalisation and emergency evacuation. It all comes down to doing some research and choosing the right kind of cover for the holiday you’re taking.

Choosing a travel insurance policy can feel overwhelming. All this talk about limits and exclusions, excesses and premiums — it's hard to know where to begin, but we’re here to help.  Let's start with the basics: 

1. Your destination 

Are you travelling internationally or domestically? Is there a travel warning in place, or is it considered safe? Some cities and countries carry more risks than others, so you’ll need to read about your destination’s travel advice beforehand to make sure the policy you choose is appropriate for your destination. Smartraveller is a great place to start!  

2. The activities you have planned 

Not all policies cover the same things. For this reason, when you get a quote, you’ll need to let the insurer know if you intend to hit the slopes for a ski session, explore a city on a motorcycle, or head on a cruise, as it may mean paying extra for your premium. Take a close look at the Product Disclosure Statement (PDS) to see exactly what’s covered, and if it suits what you’ve got planned. 

3. Pre-existing medical conditions  

If you’re travelling in your home country, your personal health insurance may cover illness or injury that occur on your travels. But if you’re going overseas,  this often isn’t the case. Be aware of pre-existing conditions and check the travel insurance policy you’re looking at to see if they’re covered. 
 
4. Your budget and excess amount  

First things first, understanding what ‘excess’ means! A travel insurance excess refers to the amount you agree to pay if you need to make a claim on your policy. Anything above that amount would be covered by the insurer, subject to the terms, conditions and limits outlined in the PDS. The excess is commonly around $250, but it can be higher or lower depending on two factors: 

• whether you’re travelling domestically or internationally
• whether you can choose to reduce or remove your excess.   

Keep in mind, if you choose a higher excess option in order to lower your upfront premium, you will end up paying more if you need to claim. So, take the time to consider your options and weigh up the short-term savings versus the potential of having to pay more later.

Before you travel, it’s important to understand what your insurer will need from you to lodge a claim, and when that information would be required. For example, if your flight or accommodation is cancelled, you may need to produce confirmation details of your flight or hotel bookings. If something is stolen, you may need to provide a copy of a police report and a receipt of the object that was stolen.

That’s all there is to it. Once you’ve found a policy to suit your travels, you can focus on packing your bags. Don’t forget to leave enough room for souvenirs!