Not sure if basic travel cover is worth it? Find out why covering the essentials is a smart move.
No matter where you’re visiting, you should have travel insurance. Medicare doesn’t cover you outside of Australia, so without travel insurance you will need to pay medical bills out of pocket, at a potential cost of thousands or even hundreds of thousands of dollars. Basic policies meanwhile, can start at less than $20 and can cover you for medical expenses, accidental death, personal liability and more.
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What will it actually cover?
Entry-level travel insurance policies are designed to protect you from some of the more common scenarios. Compare basic travel insurance policies by looking at what they cover, including:
- Overseas medical expenses. Without cover for these expenses, overseas injury or illness might leave you deeply in debt.
- Medical evacuation and repatriation. If you need to be medically evacuated or repatriated, such as if you break a leg and need an airlift while mountain climbing, or develop an illness that requires you to be return to Australia under medical supervision, travel insurance can cover it. These expenses also typically run into thousands or tens of thousands of dollars.
- Refunds and cancellation cover. If you’ve pre-booked tickets, hotels, tours or other activities, you might want to find travel insurance to reimburse you if, through no fault of your own, you need to change plans.
- Luggage, valuables and personal belongings. Airlines don’t always have the best track record for taking care of luggage, but many travel insurance policies are able to reimburse you for lost belongings. Valuables and other personal belongings can similarly become a target for thieves and may be more likely to go missing overseas than at home. If something is important to you, it might be a good idea to either leave it behind or make sure it’s covered by travel insurance.
- Personal liability. If you find yourself on the hook for personal legal liability when overseas – for example, if you’re involved in a car crash and the other party decides to sue you – basic travel insurance can cover the costs.
How much does will it cost?
The table below shows some example pricing for basic travel insurance for different age groups from a number of travel insurance brands for a 2 week trip to Bali.
| Brand | Age 25 | Age 65 | Age 75 |
|---|---|---|---|
| Brand 1 | $22.92 | $31.84 | $44.59 |
| Brand 2 | $25.48 | $33.50 | $46.25 |
| Brand 3 | $29.90 | $35.90 | $63.69 |
| Brand 4 | $34.95 | $45.50 | $67.09 |
| Brand 5 | $39.50 | $54.34 | $77.06 |
| Brand 6 | $42.30 | $54.60 | $79.70 |
| Brand 7 | $44.16 | $57.73 | $80.10 |
Note that these prices are taken at November 2016 and are subject to change based on your own cover requirements.
Is basic cover enough? What level of travel insurance do I need?
Before you choose essentials-only travel cover, you might ask yourself some questions to make sure it works for you.
- Where am I travelling and how long will I be away? Find a policy that covers you for all of your destinations and for the amount of time you will be travelling. If you are visiting an area that the Australian government has issued a travel advisory for, basic policies might not cover you.
- Do I have any pre-existing conditions? You might not be able to count on all insurers offering equal cover of pre-existing conditions. If this is relevant to you it is important to understand how your policy covers pre-existing conditions and which insurers might be more or less flexible.
- What do I want to do on my holiday? Will you be riding a motorbike, going skiing or participating in adventure sports? If so, you may need to check your policy’s list of exclusions and get additional cover.
- Do I just need cover for myself or for my whole family? Ideally your children will have cover too. You may want to look for a special family travel insurance policy, but you can also save money by finding travel insurance with free cover for kids.
- What happens if something goes wrong? Think about what would happen if the airline lost every single piece of luggage you were travelling with. And what if you lost your job, had to cancel your trip and really needed to get those non-refundable deposits back? Consider the real-world consequences of different situations for an idea of what type of cover you may need.
Does credit card travel insurance provide enough basic cover?
Most credit cards offer complimentary basic travel insurance. Such policies typically provide cover for a wide range of risks, including everything from overseas medical expenses and trip cancellations to lost or stolen luggage and rental vehicle excess.
These policies can be extremely handy if you’re looking for a basic level of cover for your trip. You’re technically already paying for travel insurance in your card’s annual fee, so if the cover is right for you, this option might be preferable.
However, credit card travel insurance does have its downsides. The level of cover provided is often fairly basic, with lower limits and less flexibility than you would find on standalone basic travel insurance policies. You may also have to satisfy particular conditions to activate your coverage, such as paying for a certain amount of your holiday with that credit card. But so long as you keep such limitations in mind, credit card travel insurance policies are definitely worth considering for budget-conscious travellers.
- If your current card has complimentary travel insurance, find out what you should know before heading overseas with it.
- If you’re interested in a new credit card and want complimentary travel cover ahead of your upcoming trip, you can find and compare more than twenty different options here.
How to save money on travel insurance
Sticking to basic travel insurance can save you money, and following these tips can save you even more.
- Shop around. Don’t settle for the first policy you come across. Comparing quotes online is both fast and simple, so get quotes from at least a few different insurers before deciding on one.
- Read the fine print. Everyone has heard horror stories of insurance companies refusing to pay claims because of hidden exclusions. Reading the Product Disclosure Statement of any policy you’re considering will give you a clear picture of what each plan actually covers, and when it might not pay out.
- Choose a bigger excess. Many insurers will give you the option to choose a higher excess in return for lower premiums.
- Consider a multi-trip policy. If you’re a frequent traveller who takes several trips each year, take a look at multi-trip policies. Instead of just covering you for one journey, these 12-month policies can cover all trips that year, whether for business or pleasure.
- Keep an eye out for discounts. Promotions and discounts from insurers can help you enjoy sizeable savings, while promo codes are an incredibly easy way to pay less for the same cover.
- Choose the right level of cover. Don’t pay for a comprehensive policy if you don’t need one, and consider which policy features you can do without.
- Be up-front and honest. It’s your duty to disclose any relevant information to your insurer when you apply for cover, including any pre-existing medical conditions. Failing to tell your insurer the truth might lead to a claim being denied later.
- Be wary of excess charges from travel agents. It might seem convenient, but travel agents can add big commissions onto the policies they sell. The same basic travel insurance is often considerably cheaper when you get it yourself rather than through an agent.
Some final questions you might have
When should I buy travel insurance?
The best time to take out cover is as soon as you have booked your trip. This ensures you can get refunds for cancellations that happen before leaving, such as if the airport at your destination is closed due to a storm.
Does basic travel insurance cover medical expenses?
Yes, basic travel insurance provides cover for overseas medical and hospital expenses.
What extra features can I find in a comprehensive policy?
While the level of coverage offered differs between providers, comprehensive policies may include extra cover for additional expenses, travel delays, loss of income, rental vehicle excess and much more. Where limits apply, such as to luggage cover, you can generally find higher limits with more comprehensive policies.
How can I compare basic travel insurance policies?
You can go to the website of each insurer you’re considering, then get quotes and read policy details there, but it’s much faster to use an online comparison tool to simultaneously get quotes from more than twenty different insurers.
