Your flights and hotels may be covered by your travel insurance depending on the policy you’ve chosen.
Travelling overseas is a fun experience, but nobody plans for things to go wrong. Unfortunately for some people, things always don’t go according to plan so being prepared for it is essential - that is why travel insurance can be a huge investment.
In most cases holidays run smoothly, but there may be some risks you may be exposed to when travelling overseas. For example, if one of your flights is delayed for a few hours, you may miss your next transit flight and the airline may charge you a fee for rescheduling. Likewise, if you lose your passport you may have to change or cancel your hotel accommodation and flights.
Just in 2012, the Department of Foreign Affairs dealt with 20,000 cases helping our Aussies in trouble overseas. If you have no or inadequate insurance, the financial cost of getting yourself out of trouble overseas can be a huge one.
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Depending on the level of cover you’ve chosen, you’ll be covered up to a certain amount for additional accommodation and travel expenses. It’s important to check the Product Disclosure Statement (PDS) before signing up to know exactly what you’ll be covered for. Another thing to look out for is how the PDS words the type of cover you want.
For example, 1 Cover, a popular travel insurance provider, defines ‘additional accommodation and travel expenses’ as a situation where you cannot travel because of an illness or injury. If you’re looking for a policy that covers you and your companion while travelling, then their policy refers this as ‘emergency companion cover’. Again, if you’re looking for cover in the case that your journey is interrupted by any reason you can’t control, the policy is referred to as ‘disruption of journey’.
James decides which cover to take
James is about to go on a holiday to Europe for a month and has decided that he wants to take out travel insurance. He looks at the pamphlet from 1 Cover Travel insurance and looks at the types of policies they have available. It’s important for James to have disruptions to his flights covered, in the case that his flights are late and he misses any connecting transit flights (as he is travelling all around Europe). He notices that 1 Cover’s Comprehensive policy is the only one that provides this benefit. After reading the terms and conditions, he is happy with the policy and signs up.
Travel insurance policies explained
Be mindful that policies will differ according to the insurer and the type of cover that you get, so the titles mentioned here may not necessarily match those of your current insurer. But here is a general idea of what you can expect from them if you want to be covered for flights and hotels.
- Additional accommodation and travel expenses. The insurer may reimburse you for any reasonable additional accommodation and travel expenses if you cannot travel due to illness. The illness needs to be in the extent that you need immediate treatment from a medical practitioner and they will need to certify you. You may also be reimbursed for disruptions to your journey for reasons such as political unrest, unknowingly breaking any quarantine rule or losing your travel documents.
- Emergency companion cover. If you’re travelling with somebody else, then your insurer may reimburse you for reasonable accommodation and travel expenses for your stay with your companion, if he or she cannot continue their travels due to illness. This may also cover the case if you’re ill and a relative or companion needs to travel to escort or stay near you. A medical practitioner will have to certify you or your companion to be eligible.
- Disruption of journey. Your travel insurer may reimburse the cost of your reasonable additional meals and accommodation expenses if a disruption to your journey occurs. Some insurer will have a specific timeframe as to how much your journey can be delayed up to and will have a cap to the amount they may pay out. Keep in the mind that your insurer may not pay if your transport or accommodation provider financially collapses.
How to claim
To make a claim, you will usually need to give your travel insurer some notice by completing a claim form physically or online, or calling them directly. If your claim form isn’t completed properly, or you don’t provide sufficient information, then your claim may not be fully processed. You will have to give your insurer all the information and evidence they ask from you, otherwise you risk the chances of your claim being rejected.
Credit card travel insurance*
Credit card travel insurance cover is usually more restrictive than those provided by a travel insurer. However, the same rules apply - you need to read the terms and conditions before signing up. Depending on the tier of your credit card, whether its gold, platinum or black there could be different levels of cover.
Most platinum level and above credit cards will provide travel insurance, but there will be different limits set by the insurer. It’s important to note that your credit card provider is not your travel insurer, so if you want to make a claim, you need to direct these to your travel insurer.
For example, Commonwealth Bank Gold, Platinum and Diamond credit cards have different levels of medical and contents benefits, but have the same benefits for complimentary travel insurance. Gold, Platinum or Diamond cardholder automatically receive base cover insurance and can activate the full travel insurance policy by logging into Netbank. The base cover also applies to your eligible spouse or any dependent children travelling with you. The base cover will provide 3 months of insurance after the date of departure for Gold personal and business cardholder’s, 6 months for Platinum personal and business cardholders, or 12 months for Diamond cardholders.
Travel insurance tips
- Aussies actually have no legal entitlement to financial assistance from the Government is something goes wrong overseas, which is why travel insurance is highly recommended.
- Don’t just consider insurance for your accommodation and flights, you’d be surprised how often travellers lose their phones or luggage as well.
- Always be prepared to claim, before you leave the country, ensure you’ve noted all the relevant phone numbers both on your phone and physically.
- Some travel insurers charge higher premiums if you’re over the age of 60. Travel insurance experts recommend going online for the same deals at a cheaper price, regardless of age.
- Don’t just rely on your credit card as many business or sporting activities may not be covered. Generally, cover only lasts for 3 months and cannot be extended once you’re overseas. A good idea is to check what your credit card currently provides and use a separate travel insurer to fill in the gaps.
*Insurance policies are up to date as of 17 July 2013. Remember to always read through the PDS before applying for any financial product.