10 January 2018
Whether you're relaxing in the sun on a far flung beach or admiring the sights in an exotic city, travelling is one of the few things that unite us all. With over 9.2 million trips taken by Australians and 2.3 million taken by New Zealanders in 2014 alone, it shows how much we love to travel.But as fun as traveling, either interstate, overseas or to another city for business or for personal reasons can be, it does come with a bit of risk.
Travel insurance can cover you for any financial losses that can impact your trip, whether they occur before, during or even after you zip up your suitcase.From changes to your travel schedule such as cancellations or interruptions, unforeseen medical expenses, baggage damage or theft, travel insurance will help lessen the financial blow.
When booking your trip, ensure you take out a travel insurance policy as soon as you your payment goes through this will protect you for any unused travel and accommodation should you need to cancel your trip due to a covered event, such as illness or a natural disaster.Generally, travel insurers offer policies that cover families and couples, while some also offer multi-trip and annual policies for frequent travellers.
Travelling overseas and medical expensesMost international travel insurance policies will cover you for overseas medical and dental expenses, lost or stolen luggage, liability cover, accidental death or disability, and expenses if your finances take a hit due to delays, rescheduled plans or cancellations.
Some insurers provide extra services, such as 24-hour medical emergency translation, which can make a huge difference to the quality of treatment you get while travelling. Receiving medical treatment in some countries can be very expensive and in some countries, you may not be admitted to hospital without some guarantee of payment.The Department of Foreign Affairs and Trades (DFAT) in Australia and Ministry of Foreign Affairs and Trade in New Zealand will help travellers with hospital admissions, evacuations of relocations for medical purposes, they will not pay for costs such as legal fees, emergency flights or medical care.
If you're not covered by insurance you are personally liable for covering the medical and associated costs you incur overseas.
Choosing a policy
As with most insurance products, there are a variety of travel insurance providers and a huge range of options to choose from. It is important to do your research and find a policy that suits your individual needs, travel plans and budget. An insurance broker can help talk you through some of the risks you need cover for.
When choosing a travel insurance policy you should find out:
It's important to remember that travel insurance doesn't have unlimited cover so think carefully about what each policy covers and how it corresponds with your trip. When taking out the policy make sure it covers you for the full duration of your trip and if you think you may extend your trip, talk to your insurer to see if you will be able to extend your policy.Most policies will offer cover for a single person or for multiple people (generally two adults and up to eight children). If you need cover for multiple people, contact your insurer to determine whether your policy will cover more adults.
As always read the Policy Document and Product Disclosure Statement (PDS) carefully to make sure that you are covered for any planned activities or locations. If you're not certain, contact your broker or your insurer for further information.Types of travel insurance excess
There are generally two types of excess and these are:
Another good way to save money on excesses, particularly if you travel frequently, is to take out an excess protection policy. This kind of insurance reimburses you whenever you make a claim that exceeds the excess amount on the policy.And the good thing about it is that instead of taking out excess protection policies for each kind of insurance you have, such as home and contents, motor vehicle, health and travel insurance, you can take out one single policy that covers all of your main insurances and their excesses.
Policy limits and exclusions
Common limits and exclusions include:
PRE-EXISTING MEDICAL CONDITIONS
Most policies won't cover you for any diagnosed conditions and in many cases, even conditions which have been undiagnosed but you've had symptoms of, may not be covered either. If you aren't sure about whether you have a medical condition that needs to be declared, you should contact your insurer and discuss it.
If you have a pre-existing medical condition and you don't tell your insurer about it when buying the policy, the insurer may refuse to pay some or all of any claim you make later. Many insurers will provide cover for travellers with pre-existing conditions, though they may exclude claims that arise from that particular illness or condition.
ADVENTURE SPORTS OR HAZARDOUS PURSUITSEven though they're commonplace for travellers, activities such as motorcycling, surfing, rock climbing, skiing, scuba diving, bungy-jumping and hang-gliding may be excluded from your standard policy. In most cases however, you may be able to add them as an extra to your policy. Be aware that doing so will generally increase the premium you need to pay.
There are some policies that specifically cater for adventure sports or outdoor activities so if you are planning on doing a spot of extreme sports, research whether it is better to go with a specific policy or take out extra cover on a standard one.
Insurers generally consider most people are responsible and use common sense when travelling. As such, most policies won't cover you for the losses resulting from what they deem 'risky behaviour'.This includes:
DISEASE OUTBREAKSIn general travel insurance policies will also exclude claims relating to quarantineable disease outbreaks, such as swine flu or Ebola. Before travelling, be sure to check out smarttraveller.gov.au or safetravel.co.nz for travel advice on your destination country.
CIVIL UNREST, WAR AND TERRORISM
PERSONAL BELONGINGS AND LUGGAGE
How travel insurance premiums are calculated
Premiums for travel insurance are calculated based on a number of factors including, but not limited to:
Domestic travel insuranceMost people consider travel insurance a worthwhile investment when jet setting overseas, but rarely do they think about buying insurance for travelling within their own country.
Domestic travel insurance usually provides cover for delays, cancellations, loss of or damage to luggage and personal effects, and personal liability. Some policies may also cover you for the usually expensive excess you need to pay on rental vehicle insurance should you have a scrape in a rental car and any emergency accommodation you may need.As with international travel insurance, some activities, such as adventure sports, may be excluded or may require payment of an additional premium.
Credit card travel insurance
As with any insurance product, it is important to read the PDS carefully so you know how much cover you will receive under these policies and whether there are any requirements you need to meet to qualify for this cover. You should also ensure the cover provided by your financial institution will be enough for the place you are visiting. In some cases you will need to buy stand-alone travel insurance to make sure you're adequately covered.What is a product disclosure statement?
A Product Disclosure Statement ( PDS) is a legal document, or sometimes a group of documents, that contains information about your insurance policy. A PDS will typically include any significant benefits and risks, the cost of the policy and the fees and charges that the policy provider may receive. Supplementary PDSs may be issued from time to time and must be read in conjunction with the PDS to which they relate. A PDS will help you understand the insurance policy and give you the the information about the terms and conditions, policy benefits and exclusions that you can use to compare differet policies. You should be aware that a PDS doesn't take into account your individual needs or financial situation.Reading the PDS will help you compare and make an informed choice about the policy and give you information on you how your insurer will respond if you need to make a claim. And most importantly, if you don't fully understand the PDS contact your insurance company or talk to an insurance broker and ask for more information. It's always better to have more information than less.