Travel Insurance — Key Points for Consumers
Update - January 2012
Travel insurance is a priority when considering business or
recreational travel.
The travel insurance market is highly competitive and consumers
have a range of coverage options. It is important to purchase cover
that suits your individual circumstances and travel plans - shop
around and read the policy documentation.
Background
Regardless of whether you travel regularly, infrequently or on a
once-in-a-lifetime trip, travel insurance is very important. The
Department of Foreign Affairs and Trade assists more than 20,000
Australian travellers a year who find themselves in difficulty,
including over 700 hospital admissions, 600 deaths and 100
evacuations of Australians to another location for medical
purposes.
Travel insurance can cover the policyholder for insurable events
that may occur before or during travel, such as trip
cancellation/interruption, medical expenses, baggage damage/theft
and more.
The cost of travel insurance is based on the type of cover
requested, the age of the insured, the destination of travel,
length of stay and any pre-existing medical conditions. It is
important to obtain the right type of travel insurance to suit your
individual requirements.
Exclusions
Like most insurance policies there are exclusions on most types
of travel insurance policies. Exclusions identify issues and
circumstances under which your policy will not cover you.
Exclusions can include issues related to acts of civil unrest,
self inflicted injury, loss/theft of unattended baggage, loss/theft
of cash and pre-existing medical conditions.
The Product Disclosure Statement for travel insurance policies
will detail the exclusions applicable to the policy - you should
read carefully the policy before deciding to purchase a particular
travel insurance product.
The Product Disclosure Statement will also detail the types of
pre-existing medical conditions that could exclude you from cover.
If in doubt make contact with the insurer to discuss your
circumstances. Failure to declare a pre-existing medical condition
could jeopardise any claim you subsequently make.
Where you cannot obtain travel insurance to cover personal
medical circumstances, you should consider the potential financial
risks very carefully before deciding whether to proceed with
planned travel.
Travel insurance policies also have exclusions for claims
relating to quarantinable disease outbreaks, such
as Swine Flu.
Many insurance policies will not cover claims made in countries
where the Department of Foreign Affairs and Trade recommends
against travel for issues relating to terrorism or civil
unrest.
Prior to travelling - Consumers should visit http://www.smarttraveller.gov.au/
and familiarise themselves with warnings about the location to
which they intend travel.
Travellers may find it difficult to obtain travel insurance to
some destinations.
Some activities are excluded from many policies or may
require an additional premium to be paid. For example,
snowboarding, surfing, rock climbing, kite surfing, hunting, bungee
jumping and underwater activities involving the use of an
artificial breathing apparatus.
When choosing a travel insurance policy you
should:
- Always read the product disclosure statement prior to
purchasing your travel insurance
- Shop around to find a policy that suits your individual
requirements
- Ensure that you understand exactly what your travel insurance
covers, as travel insurance cover is not unlimited
- Speak to your insurer to clarify any policy issues that may
cause any confusion
- Read the policy carefully to make sure you are aware of any
excess and where it may apply
- Ensure that any medical cover is adequate for possible expenses
in the country you are going to visit. In regions such as North
America, Europe, Africa and some parts of Asia medical costs can be
very expensive
- Declare any pre-existing medical conditions you may have
Personal Belongings
Generally, cover for luggage and personal belongings will be
limited.
It is important to know the total amount of cover along with any
limit that may apply to any expensive items you may wish to cover,
such as cameras, laptops and/or jewellery.
This information can be found in the Product Disclosure
Statement.
Credit card insurance
Some financial institutions provide travel cover as part of
their credit card service to their customers.
As with full travel insurance products, it is important to read
your credit card provider's policy carefully to determine the
extent of the coverage provided by this policy and whether certain
eligibility requirements need to be met.
Disputes
Information about the dispute resolution process is available here.