There are many things to consider when travelling overseas including passport, tickets, exchange rates, accommodation, and what to pack. While overseas travel can be an exciting prospect, there can be situations where things may go wrong and travellers find themselves needing urgent medical assistance, help with replacing lost luggage and/or assistance with making an urgent trip home.
This is where travel insurance can help - along with providing peace of mind for travellers who may find themselves in any of these situations.
Travellers should thoroughly read the policy before they purchase travel insurance to ensure it meets all their requirements and provides the appropriate level of cover.
We've all heard the horror stories of people losing their money, passport, sometimes their entire luggage, leaving them stranded far from home. Or worse, being injured or just getting sick in the wrong part of the world. These are just some of the reasons why I never travel overseas without adequate insurance.
What features should I look for in a travel insurance policy?
There are a very wide variety of travel insurance policies available. They all have their good features, and they all apply various restrictions. It's important that you know what you want covered, and understand what your policy actually covers you against.
No doubt you've heard stories of travellers injured in places like the United States or Europe, where a hospital bill for a relatively minor condition can exceed $50,000. In such circumstances, that insurance premium is a worthwhile investment.
Travel is one of the most hotly contested classes of insurance when it comes to claims. The Insurance Ombudsman Service, the insurance industry's dispute resolution system, reported that the majority of disputed travel claims revolved around what the policy was intended to cover and how much goods claimed for really cost.
- Read through the available policies very carefully, taking into account where you are going, what you are likely to have with you and what the costs are likely to be if you are injured.
- Don't take out the first policy you're offered, without understanding what it contains. And don't leave your travel insurance to the last minute because the choices on offer are quite wide.
Most policies offer cover for singles and partners. These policies generally cover children travelling with you, however in each case you should refer to the policy wording.
What travel insurance should generally cover:
Medical and additional expenses
Including cover for the costs of medical, surgical, hospital, ambulance, emergency dental, medical evacuation and additional expenses.
Cover for cancellation charges on prepaid arrangements.
Luggage and personal effects
This provides cover for personal belongings that are taken on the trip or purchased during it. Note that there is usually a limit per item, with an overall limit for electronic equipment like cameras and personal computers.
Cover for travel documents, credit cards or travellers cheques that are lost or stolen. There is usually a limit - either per item or overall
Cover against possible claims arising from injury accidentally caused to another person or damage their property. In some parts of the world, the liability can be huge.
Some insurers offer to reimburse the cost of the airfare if you suffer an accident or need to return home due to a covered event outside your control.
Reimbursement for additional meals and accommodation expenses if the journey is delayed for more than a certain number of hours. Delays due to industrial action and - even worse - weather are far more common than you might think.
Reimbursement for purchases for essential items if luggage is temporarily delayed by the carrier.
Limits usually apply, ranging from $10,000 to $25,000, depending on the type of policy.
Resumption of journey
If you have to return home early due to the unexpected death of a relative, some insurers will offer cover for the costs of resuming an overseas trip. Note, however, the word "unexpected".
Provides spending money for each day that you are confined in an overseas hospital.
Loss of income
Some policies provide a benefit ranging from $5,000 to $25,000 if you have an accident on a trip and are unable to work when you return home.
Cover for kennel and cattery fees if you are caught up overseas by injury or an unforeseen delay.
Rental vehicle insurance excess
Provides cover for the insurance excess on a rental vehicle if it is involved in an accident or stolen.
Cover for children
Some insurers offer coverage for dependents under the age of 21, accompanying the policyholder, at no additional cost.
Amateur or action sports
For anyone partial to skiing, ice sports, hot-air ballooning, scuba diving, bungee jumping, white-water rafting, parachuting, paragliding and so on, on their holidays, look for a policy that offers specific cover for amateur or action sports. The policy will define exactly what is covered. If your favourite activity isn't on the list, ask your insurer.
Think ahead. Leave a photocopy of your passport and tickets with someone at home, and carry another copy in your luggage. That way, if you lose your passport or tickets it's much easier to replace them.
Your state of health
If you have what the insurers call an "existing medical condition", ", it doesn't mean that you can't get travel insurance. Ask for a Traveller's Appraisal Form, which you must complete and submit, to the insurer. Sometimes an additional premium payment will be required.
If you have to rush home
Some insurers will pay for you to resume your holiday if you have to return to Australia because someone close - usually a relative - has become seriously ill. However, if you are aware of any conditions that may cause this to happen, you should tell your insurer when you take out the policy.
What's in your luggage?
Read the luggage section of your policy very carefully. You will find that individual item limits apply and the insurer will observe these limits.
Keep your valuables secure at all times
While you are travelling, keep your valuable items - laptop, cameras, and jewellery - with you. Don't expect your insurer to reimburse you for lost your luggage left unattended in a public place, or in a motor vehicle overnight.
Don't trust strangers to look after your gear for you
In one recent case, a claimant tried to convince his insurer - unsuccessfully - that leaving his luggage in a New York taxi while he dashed into a shop was a perfectly reasonable thing to do.
Keep receipts for any claimable items that you buy
Keep receipts separate from the goods you buy while travelling.
Report losses to local police
If you have anything stolen, report it to the local police immediately and get a copy of their report. It's vital when you come to make a claim.
You can't claim for cash
Insurers don't normally compensate you for losing cash. Use your credit cards and travellers cheques whenever possible and limit the amounts of cash you carry.
Are you licensed?
Don't drive a motorcycle overseas unless you have a valid international licence. Wear a helmet, even if local laws don't require it. That's the best form of insurance there is.
In addition to the above suggestions, I would strongly advise you to check any age restrictions on your insurance policy. If, for example, you have parents or close relatives over the age of 70, you should check that your policy will cover you if you need to cancel your holiday or return home during your holiday due to their illness or death (providing the cause of illness or death is not the result of a pre-existing condition). The upper age limit that insurance companies cover for seems to vary quite a bit, so do your homework.
Another aspect of your travel insurance policy to be aware of is the excess amount. Most insurers will offer a couple of options with an option to pay an additional premium to reduce the excess to nil. Whilst I haven't reduced my excess to nil in the past, I will definitely do so in the future after learning what happened to a friend.
She and her husband travelled to Greece to do an island-hopping holiday. Unfortunately, just about every ferry they were to travel on over the course of their three week holiday was cancelled, either due to bad weather or technical issues, and they had to book and pay for alternative transport.
As each ferry cancellation was regarded by the insurer as a separate event*, my friend had to pay her policy's excess ($250) for each claim (ie. each individual ferry cancellation) she made. This meant that after the insurer deducted all her excess fees, she received hardly anything back at all, leaving her well out of pocket.
Had my friend reduced the excess on her policy to nil, she would have received back all her out of pocket expenses in full.
*This appears to be the norm with two of the major underwriters of travel insurance policies available in Australia - Allianz and Greater Lakes. Even though your travel insurer may be called something else, they are likely to be underwritten by one of these underwriters.
This is general information only and does not consider your personal circumstances. You should refer to the Product Disclosure Statement of the travel insurance policy you are considering before making any decisions about this product.
Information courtesy of CHI Travel Insurance Pty Ltd. CHI policies are issued and underwritten by Allianz Australia Insurance Limited ABN 15 000 122 850. I have no alliance or affiliate arrangement with CHI Travel Insurance or Allianz Australia.
In this article I explain why I NEVER travel overseas without travel insurance. Should you ever need to make a travel insurance claim, you'll find my tips for making the claims process go much smoother here.