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Travel insurance excess charges explained
You can save on travel insurance by agreeing to pay more out of pocket if you have to make a claim.
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Important:
Travel insurance rules continue to change as a result of the coronavirus pandemic. We’re working hard to keep up and make sure our guides are up to date, however some information may not be accurate during the pandemic. It’s even more important to double-check all details that matter to you before taking out cover. Please know that some policies may not be available through Finder at this time. Here are some helpful tips:- If you're buying a policy today, it's unlikely that you'll be covered for border closures
- If your travel plans go against government advice, your policy will most likely be voided and you won't be covered
How does a travel insurance excess work?
A travel insurance excess is the amount you agree to pay an insurer if you end up claiming on your policy. Take for example, a travel insurance policy for a week in Bali. The same policy could cost you $60 with a $200 excess, $72 with a $100 excess or $108 with a $0 excess. As you can see, choosing a higher excess can save quite a bit.
That's the good news. The bad news is that you'd have to pay that amount before you could claim anything. Say you lose your phone that's worth $500 and you have a $200 excess. Once your insurer approves your claim, you'll have to pay the excess amount, which means you'd only get $300 back. Another potential shortfall of this option is for lower value claims, where the claim amount would end up being comparable to that of the payable excess.
Choosing the higher excess option is slightly riskier if you end up needing to claim but if you're just looking to save some coin in the short term, it's not a bad way to go.
Compare your travel insurance quotes
| Brand | Lowest excess option | Excess Option 2 | Excess Option 3 | Excess Option 4 | Apply |
|---|---|---|---|---|---|
 1Cover |
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 American Express |
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 Tilda |
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 Budget Direct |
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 InsureandGo |
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 Medibank |
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 Online Travel |
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 RACV |
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 Virgin |
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 Webjet |
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 World Care |
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 Zoom |
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Types of travel insurance excess
Standard excess
A standard excess is the set amount stipulated by the insurer that you must pay if you make a successful claim.
Voluntary excess
Most insurers will give you an option to select the excess amount on your policy. The price of your premium (policy) will change depending on which excess amount you select. As mentioned earlier, the higher your excess, the cheaper your premium.
Additional excess
Some claims will actually force you to pay an additional excess depending on your insurer. As an example, you may have chosen a $100 excess for your ski travel insurance, but any ski related claims could cost you an additional excess of $100 on top of your selected excess. This means that any ski related claims will cost you an excess of $200.
Another example is the additional excess that some insurers charge seniors if they have to claim on medical expenses.
How does the excess impact the cost of travel insurance
| Brand | Policy | Quote with 0 excess | Quote with $100 excess | Quote with $200 excess | Apply |
|---|---|---|---|---|---|
| 1cover |
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| Budget Direct |
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fastcover |
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Quotes are based on 30 years old person going to Bali for 14 days. Information last checked as correct in September 2018 and is subject to change at any time.
Benefits of comparing excesses
When you're comparing policies it's not a bad idea to glance across the comparison section and have a look at the excess options. You can use this as a way to split the decision between two similar policies. That is, if they are both offering the same level of cover for an item, opt for the option with the lower excess. Or if one policy only offers a standard excess and you're more inclined to opt for a double or nil excess option, this can serve as another differentiator.
Does an excess apply to all claims?
Every insurer is different, though you will generally have to pay an excess for claims relating to journey changes, baggage and personal items as well as cash and travel documents. Many insurers will not charge an excess for delayed luggage, loss of income, hospital cash or accidental death.
It's worth looking for an insurer that won't charge an excess for medical care. That's because it's common for GP visits and prescriptions to cost less than the excess amount, meaning you're not saving any money with a policy. It can also deter you from going to the doctor's when you're away, so avoid a high excess when it comes to medical care.
Here are some commonly claimed items and whether you will generally be expected to pay an excess when claiming on these items.
| Cover | Excess payable? |
|---|---|
| Medical benefit | Yes |
| Lost or stolen luggage | Yes |
| Hospital cash | No |
| Cancellation | Yes |
| Travel delay expenses | No |
| Delayed luggage | No |
| Trip curtailment | Yes |
| Medical evacuation | Yes |
| Passport or travel documents | Yes |
| Loss of income | No |
| Total permanent disability | No |
| Personal liability | Yes |
| Accidental death | No |
When do you have to pay your excess?
How and when you pay an excess will depend on the policy and the insurer. Some insurers require you to pay the excess upfront before they will pay the claim, while others will simply deduct the amount of the excess and pay out the remainder of the benefit.
Does multiple claims mean multiple excess charges?
Claiming on multiple sections of the policy does not generally mean you will pay multiple excesses. Most of the time you're charged one excess for an event even if you are claiming on multiple benefits.
The same goes if you're claiming on a family policy, even if that event impacts multiple travellers such as both parents and children; you'll only pay the excess once.
Compare travel insurance brands that offer reduced excess
Compare policies by their default excess
When calculating your travel insurance quote, Finder uses the travel insurers default excess option, which means you can sort your results from lowest to highest excess option.
Finally, some good news! Domestic travel is picking up, so some insurers have started offering cover again 🦘 Just remember, you won't be covered for any pandemic related claims if you do take out domestic travel insurance.
International travel insurance is limited and sometimes unavailable at this point.
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Ask an Expert
Hotel in Menorca lost 2 adults 2 children’s passports, insurance company are paying for replacement passports etc but have said our excess is £100 per person. The certificate from travel agents only says excess £100, no policy booklet was given as Thomson’s didn’t have any in stock. I believe it has been mis-sold as I was unaware of excess being per person.
Hi Kim,
Thanks for reaching out.
I’m sorry to hear about this mishap. I’m afraid we cannot check this information for you as we do not have the insurance details. You may want to contact the insurance company and ask for the policy booklet so you can ascertain the excess charging.
It’s a good idea to always check the features and details of the policy, as well as the relevant Product Disclosure Statement and if necessary, reach out to the insurance company before buying an insurance.
Kind regards,
Liezl
I asked Google, “why do we have to pay an excess on our Travel Insurance”. I got this page as an result ( https://www.finder.com.au/travel-insurance-excess ). It explains how an excess works. Any Dip-Stick knows how it works, Derrr. I asked why do we have to pay it. If you insure something. It should replace the total value of what is insured. I accept depreciation. But why do we have to pay an excess. It Google that led me here. Not finder.com.au. So shows you how bright google is. Not very. So why do we have to pay an excess. Seems a SCAM to me. That everyone accepts.
Hi Barry,
Thanks for your question.
When you buy travel insurance with an excess option, you are assuming a part of the risk on behalf of the insurer in return for a lower premium. There are travel insurance brands out there that offer zero excess options but this means you are paying more upfront. If you wish to check your options, here’s a list of insurers offering excess reduction travel insurance.
I hope this was helpful,
Richard