Planning a trip with friends, family or just yourself over summer? If you’ve booked your flights, you’ll be getting excited about new adventures, but before you start packing your bags, you need to do a little prep work to protect yourself.
That means looking into the value – and necessity – of travel insurance.
Start with the non-negotiables
If you’re splurging on flights, hotels and tours, don’t skimp on the safety net. Think of travel insurance as a line item, not an optional extra.
There should be a few non-negotiables on your list – you must seek out a policy with unlimited medical cover, including cover for medical evacuation if needed and millions of dollars of cover for personal liability.
If you want cancellation protection, look for cover that is equal to or more than the amount you spent or plan to spend on travel and accommodation, tours and other expenses.
And if you remove baggage cover, be honest about what you’re planning to pack. You’re choosing to pay out of pocket – from your own savings – to replace anything that’s lost or stolen. It’s essentially working out your risk appetite, based on what you’re willing to lose.
When to buy – and why timing matters
Australians love leaving insurance to the night before. Don’t.
Sarah Orr from Compare the Market advises, “As soon as you book your holiday and pay a deposit, that is when you need to buy travel insurance – no matter the destination.” That way you’re covered for anything that may happen between the time you book and actually start the holiday.
If there’s a natural disaster and other serious issues which occur during that time, they quickly become issues called ‘known events’, which insurers won’t cover after the fact. So if a volcano starts to erupt just before you leave on holiday, you can’t then go and get insurance cover because the insurer will claim it’s a ‘known event’.
“This is a great reason to buy cover as soon as you book or pay your deposit – to ensure you’re covered for any events that occur in the lead up to departure day,” says Sarah.
One more reality check: “Cancellation cover only applies to unforeseen events. If you change your mind and no longer want to travel, you won’t be covered.”
The claim killers you can avoid
Most denied claims are frustratingly preventable.
Sarah’s blunt advice is to guard your gear. Be careful where you leave your bag! Luggage left unattended in public places will not be covered. If you leave your bags with other bags in a hotel foyer while a tour group has breakfast, they won’t be covered if they’re stolen. If you leave your bag on a park bench and wander off to take photos, you will not be covered.
Medical disclosures matter too: “It’s crucial to tell your insurer about any medical conditions you have when you purchase a policy,” Sarah says. “If your existing medical condition complicates other medical issues or injuries, you may not be covered or you may only be partially covered.”
‘Free’ credit-card cover versus paying for a standalone policy
Lots of credit cards will dangle complimentary travel insurance in front of your face. Sometimes it’s fine for simple trips, but usually it’s just not quite right. “If it sounds too good to be true, it probably is!” Sarah advises.
Travel insurance that’s included at ‘no added cost’ with your credit card may not provide the cover you need. Always compare and check the limits and exclusions to make sure you have the cover you need. Standalone travel insurance normally isn’t that expensive in the context of holiday planning.
How claims actually work
The golden rule is to call early, not after the fact.
“Always call your insurance provider as soon as possible if you suffer a loss,” Sarah says. “If you pay for medical bills or authorise treatment without seeking approval, and you simply hope to claim back later, you may be disappointed.”
Documentation is a must as well: “Simply keeping a credit card receipt will often be insufficient and your claim will be delayed. The more you can share with your emergency service provider at the time of the loss, the faster your claim will be assessed and processed.”
COVID, unrest and ‘Do not travel’
Policies have shifted since the pandemic. Historically, pandemics have been excluded. Since mid- to late-2020, most insurers now provide cover for COVID-19, however the exclusion for pandemics is still in place. Some will only provide cover for medical expenses while others will cover cancellation fees.
Government advisories are non-negotiable as well: Insurers will not provide cover if your destination has a Smartraveller.gov.au travel warning of ‘Do not travel’. Natural disasters are often included, but sometimes as an optional extra. And with protests and strikes popping up all over the world, be precise and speak to your insurer as soon as possible.
Summer holidays should be about relaxation, not financial heartache. So, the smart move is to buy travel insurance early, aim for unlimited medical and evacuation, check any liability limits and tweak cancellation cover to match the real dollars at risk.
This is how you’ll keep the sand between your toes and the stress off your bank balance.
