Buying the Right Travel Insurance Policy
Planning a holiday is exciting. Mapping out treks, picking cities to visit and sites to see gets you in the mood for travel. What’s not so exciting? Buying a travel insurance policy. Because it’s not so exciting, travel insurance is often something that is left to the last minute or neglected entirely. This can be a costly mistake.
Another reason travel insurance is left to the last minute is because of how complicated the process seems. There are so many cover levels and options available that it can make comparing policies appear to be a daunting task. This guide is here to help you work out what type of cover is right for you and buy travel insurance, without later having to wonder if you’ve made the right decision. Remember the old saying, “If you can’t afford travel insurance, you can’t afford to travel.”
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Overseas travel exposes you to a host of risks, which is why you need to make sure you are fully insured. Travel insurance protects you from having to bear the brunt of financial losses sustained overseas, trip cancellations, overseas medical expenses and other costly situations.
While you may have life insurance or another type of personal insurance in place, these policies won’t cover you when you are overseas. Even a minor trip to the hospital can be extremely expensive overseas, which is why it is so important to make sure you are protected. Most travel insurance plans cover you for:
- Emergency evacuations
- Medical emergencies
- Trip interruption or cancellation
- Delayed luggage
- Lost, damaged or stolen luggage, travel documents or personal effects
- Accidental Death
It is imperative that you read through the PDS of the policies you are considering in order to make sure they are suitable for the country you are travelling to. It is also worthwhile checking the maximum benefit and exclusions for each option.Back to topBest Ways to Buy Travel Insurance
There are a number of different ways you can buy your travel insurance policy, be it from a travel agent, an airline or online and each method has its pro and cons.
Getting your travel insurance through a travel agent is one of the most common ways that holidaymakers get their policies. Generally, because travel agents are familiar with the products and the specific insurance needs associated with the country you’re visiting, they will be able to recommend a suitable policy. For those not wanting to do any research, this is a viable option but be wary of potential commission charges. Buying travel insurance through a travel agent can be an expensive process and it is where most agents make the most of their money. The mark up on travel insurance products can be as high as 40-50%, which is not good if you are looking to travel on a tight budget and agents will generally sell products that bring them the largest return. It is also worth noting that travel agents only have access to a limited amount of policies.
Direct from an Airline
Much like buying your travel insurance from a travel agent, getting your policy through an airline is a simple, yet costly, procedure. While this is a suitable option for those not wanting to do the work themselves or for those who are leaving it to the last minute, buying your travel insurance from an airline is probably the most expensive route. The airlines receive a commission for each policy sold and these commissions can be exorbitant. For example, if you were to purchase a Annual Multi Trip Travel Insurance plan from QANTAS, which is underwritten by QBE, there is a commission rate of up to 53% on that policy.
Buying a Policy Online
Getting a travel insurance plan online is a relatively simple procedure. There is a wealth of information available, making it easier for consumers to compare quotes, various PDSs and purchase their policies direct from the insurer. When you choose to buy travel insurance online, you are cutting out the intermediaries, which means you are saving money.Back to topWhat are the Different Types of Travel Insurance Available?
Finding the right travel insurance policy will depend on where and for how long you are planning on travelling for. When buying travel insurance, it is important to have done your research and know what type of cover is right for you. With so many different types of travel insurance policies out there it can be difficult to know what cover is right for your situation.
Single trip insurance is best for infrequent travellers. It is generally the most cost effective policy option and protects policyholders in most situations. The features of single trip insurance normally protect against:
- Medical emergencies
- Emergency evacuations
- Delayed luggage
- Accidental Death
- Lost, damaged or stolen luggage.
If you are only planning the one trip, this is the type of policy for you.
Annual Multi Trip
Multi Trip Annual Insurance is for frequent flyers. It is a fantastic option for those who travel regularly and can save policyholders a heap of money each year. Depending on the policy type, you can also be covered for domestic as well as international travel. Annual Multi Trip has many benefits including:
- Medical costs
- Additional expenses
- Loss of valuables
- Emergency accommodation.
While this is not an exhaustive list, it is important to note that the benefits and exclusions will vary between providers.
Buy Travel Insurance After Departure
If you have already headed off overseas without buying a travel insurance policy, it's not too late. Luckily, there are a number of insurance providers who provide policies for Australians already overseas. While you cannot apply cover if you have already sustained an injury or illness (in the hopes of being covered), you can take out cover to protect against any future injuries or illnesses. Most of the policies will protect you for:
- Medical emergency
- Hospital cash allowance
- Accidental death and disability
- Cancellations and delays
- Theft and loss
- Change of travel plans
With most of these policies there is around a seven day waiting from the commencement date of the policy.
Other travel insurance options available include:
- Seniors Travel
- Adventure Travel
- Group Travel
- Family Travel
- Backpacking Travel
- Winter Sports Travel.
Additionally, make sure to take note of any government advisories before travelling. Some policies will be void if you travel to countries where the government has issued a ‘do not travel’ warning.Back to topWhat to look for when Comparing Travel Insurance Policies
If you’re in the market to buy travel insurance, chances are you are not an insurance expert, which is fine. With all of the information out there, comparing policies has never been easier for consumers.
The best place to start is by narrowing your search by going to government travel websites or comparison site and get an idea of what is out there and the type of cover you’ll need.
A quick search online will allow you to easily compare policies, as you can review the documents side by side. Make sure you read the fine print, as another type of personal insurance. There are often hidden clauses and exclusions, so make sure to give the PDS a thorough reading.
Once you have your list of potential providers narrowed down to a handful, its time to get some quotes. This will not only allow you to find the cheapest policy but can also serve as a possible bargaining tool, as you may be able to take a quote to a competitor and see if they will beat it.Back to topTravel Insurance Common Exclusions
Doing your due diligence will help you find out what the specific exclusions are of your policy. Some general exclusions that will apply to most types of cover include:
- If you ignored governmental warnings
- If you act in a manner that is irresponsible and puts you directly or indirectly in harm’s way
- If the claim is the result of you participating in any illegal or illicit behaviour
- If the claim is the result of war whether declared or not, rebellion, insurrection, riot, civil unrest, epidemics, pandemics or contagious disease
- If you did not take appropriate steps to mitigate your loss
- Your claim is related to a motor vehicle accident whereby you or the driver where unlicensed or unqualified to operate the vehicle
- If the claim is the result of a preexisting condition unless the issuer was previously aware of and had given written approval
- If the claim is the result of inebriation under the influence of alcohol or illicit drugs.
So, hopefully you’re now prepared to go out there and make an informed decision about the type of policy you need and have the tools necessary to work out which provider has an appropriate option for you.Back to top