Travel insurance should be something you arrange as soon as you have paid a travel deposit allowing you to take advantage of the cancellation benefits contained within the policy and loss of deposit covers. As they say, if you can’t afford the insurance, then you can’t afford the trip!
For many, it is easy to jump online and purchase cheap travel insurance from numerous websites, or even rely on credit card insurance, some not even bothering to read the fine print when comparing travel insurance. Often cheaper online travel insurance or free credit card insurance is very basic and sadly this can mean that at the most critical emergency, travellers may find themselves underinsured for the event, or worse still, completely uninsured.
Common complaints about the “complimentary” travel insurance provided through credit cards include;
- uncertainty about who is covered – for example, if cover extends to a family member who is not a card holder
- what is covered – the extent of inclusions and exclusions
- eligibility requirements – the degree to which the credit card must be used to for a trip and related costs (when the policy is “activated”)
- if reward points can be used to activate cover
- difficulty locating the insurance terms and conditions
Often people don’t realise there are circumstances which will void common travel insurance policies such as leaving luggage unsupervised in public places, hiring and riding a motorcycle without a motorcycle license or policies which have a total alcohol exclusion.
Many travel insurance policies do not cover rock climbing or mountaineering; parachuting; driving or being driven in an all-terrain vehicle; scuba diving, unless you already have a license; any injury or accident incurred which involves alcohol, and this includes involvement as a pedestrian; missing your connecting flights when you have different airlines (you are neither covered by the airline, nor your insurance policy).
In the event of repatriation home from overseas, expenses can run into the tens of thousands of dollars, never mind the cost of public liability or legal fees if you are at fault in an accident. In countries such as the USA, where there is no free medical care and no reciprocal arrangements between countries, a quick trip to the hospital or doctor can cost you thousands of dollars. The Department of Foreign Affairs and Trade advises that it assists over 20,000 Australian in difficulty oversees each year. This includes cases of hospitalisations, deaths, and evacuations to another location for medical purposes. Medical treatment overseas can be expensive whether it is for injury from an accident or for illness such as food poisoning, appendicitis, or heart attack. Daily hospitalisation costs in Southeast Asia regularly exceed $800, return of remains from Europe in excess of $10,000. The cost of medical evacuations from the United States regularly range from $75,000 to $95,000 and sometimes up to $300,000. The Department has handled medical evacuations from Bali in which costs exceeded $60,000. Unfortunately, not all of these cases involved travellers covered by travel insurance. Travellers who are not covered by insurance are personally liable for covering incurred medical and associated costs. As a result, families have been forced to sell off assets, including their superannuation or family homes, to afford to bring loved ones back to Australia.
Around 800,000 Australians travel overseas each month with Galaxy Research reporting almost a quarter of these admitting to travelling uninsured – and around 45% of men surveyed admitting to no insurance at all. Generation Y was the worst demographic for arranging travel insurance with 51% admitting to travelling with no insurance at all.
The Financial Ombudsman Services reported a 34% rise in travel insurance disputes in 2014-2015. The main issue was denial of claim due to an exclusion/condition. Less than 4% of disputes involved policies arranged by insurance brokers with the remainder being where the traveller has either arranged the travel insurance policy with the insurer direct, or via a travel agent or relied on credit card travel benefits.
Speak to us about your travel arrangements and make an informed decision about your travel insurance.
Travel Insurance Tips and Travel Insurance Claims Examples –
Travelers without travel insurance are personally liable for covering any medical and associated costs they incur. The Australian Government won’t pay for your medical treatment overseas or medical evacuation to Australia or a third country. In an effort to assist travelers the Australian Government has set up a Smart Traveler website and also outlined some travel insurance stories.