Travel insurance 101

Overseas travel is one of life’s more expensive undertakings, with some trips costing you the same as a new car. You wouldn’t consider purchasing either a house or a car without insurance, so the same rule should apply to your overseas travel.

Many people are under the misapprehension that if they have health insurance in Australia, their medical expenses will be covered while they are travelling. This is certainly not true of most health insurers, so you could be in for a very rude shock if something untoward happens while you are overseas. If you become ill or suffer an injury while you are travelling, in most instances you will be expected to pay upfront for your medical care. Emergency medical treatment or evacuation can cost uninsured travellers thousands of dollars. Very few health insurers cover you overseas, so before you board your flight or set sail on your cruise, it would be worth checking with your health insurance provider to see if, in the first instance, they do provide travel insurance as part of your policy. And next, if the cover includes medical evacuation.

The importance of travel insurance
Most of us take some time to save up for our dream overseas holiday. Depending upon the type of coverage you need, in some instances the cost of travel insurance can add up to as much as an extra 10 per cent of the cost of your trip. Many people may be tempted to see this as just one more expense which they can do without, like foregoing the purchase of a complete new travel wardrobe or planning to skip lunches to save on food costs while on holiday. But travelling without insurance can prove to be even more costly in the long run.

Your cover considerations
When considering the extent of travel insurance you may need, it is worth thinking about the following examples. An overnight stay in a hospital in Southeast Asia can cost up to $1000 and a medical evacuation from the United States can cost upwards of $75,000. So your decision will seem much easier to make when you compare the cost of insurance coverage as opposed to the costs you will personally be liable for, should you be involved in a medical emergency.

What kind of insurance you need really depends upon a number of factors. Some things you will need to ask yourself are:

  • How long are you travelling for? A few weeks or longer?
  • What sort of equipment are you taking with you? Expensive cameras or camping gear?
  • Do you have any pre-existing conditions?

At the very least, the travel insurance you purchase should cover any medical expenses which arise from injury or illness, personal liability expenses, the theft or loss of your luggage or goods, disruption to your travel plans (including missed or cancelled flights) and the costs of new travel arrangements, accommodation and transfers. 

What to look for in a policy

When looking at a travel insurance policy, look for one which covers pre-existing conditions. There are policies which will cover pre-existing conditions but only if you meet certain criteria or purchase your policy by a certain date. If you are planning an adventure holiday you will need to look for a policy which covers the additional risks involved with this type of travel.

Read the entire policy and make sure that you get written clarification of any clauses or points of which you are unsure. Keep asking questions until you are completely happy that you understand the full detail on what the policy covers.

Choose the right policy for your requirements. If you only make one trip every year or so, you will need a policy which covers you for the dates of your trip. But if you travel more often you might want to consider the cheaper alternative of an annual policy.

One final check

Before you commit to purchasing a policy make sure you find out:

  • How much it will cost?
  • What is the excess and does the insurer offer lower premiums if you choose a higher excess?
  • What is (and isn’t) included in the policy, as you may have to separately insure high-value items such as electronic equipment.
  • The thresholds for separately insured items. You may find that you are only insured for a fraction of the cost of each item.
  • Contact numbers which you will need to call while you are travelling in case of an emergency.
  • Which paperwork you need to take with you on your trip.
  • What you need to do when you need to make a claim and what supporting documentation you will need when making a claim.

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