Airline flying above clouds

Travel insurance vs. airline insurance

How do airline travel insurance and direct travel insurance really compare?

When you book a flight, there’s a good chance you’ll be invited to add travel insurance to your flight purchase. Should you?

Both types of cover, airline and direct, seem very similar on the surface, but you should know about the differences before booking your flight. This guide lets you see the side-by-side differences between airline travel insurance policies from JetStar, Qantas and Air New Zealand, and direct travel insurance policies from FastCover, Virgin Money and Budget Direct.

Compare the differences in price and cover as this guide takes you through six different policies. All quotes here are for a 40-year-old taking a two-week trip to the United States.

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How do they compare on price?

Airline travel insurance policies quoted significantly higher prices across the board – with the exception of JetStar, all were more than double the cost of equivalent direct travel insurance policies. However, they also tended to come with more automatic inclusions, such as cover for many different activities. All three direct travel insurance policies have a list of specifically included sports and exclude cover for almost all others, while all three of the airline travel insurance policies have cover for a relatively wide range of activities.

Once you have added extra cover options and tailored the policy to your needs, the price difference between airline and direct travel insurance policies may become a lot closer.

The cost of comprehensive travel insurance

JetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
Quote$139.95$252$350$93$94.55$93

Prices above are for 40 year old traveller taking a 2 week trip to the USA. Prices may be subject to change and are only be considered as a guide of what may be paid.

Luggage and personal items cover

It can be difficult to tell at a glance what kind of luggage cover a policy offers. This is because you need to look at the total limits, as well as sub-limits, extra cover options and the different ways insurers categorise items.

The total luggage and personal effects limits shows the total value of items you are covered for. All policies compared have similar limits, with Air NZ having the highest. This is far from the full picture though.

If you look at the maximum item sub-limits, you can see how different policies may be better suited to different people. Someone travelling with a $6,000 laptop, for example, would probably have it fully covered with Air NZ and Qantas, but would only be able to recover half its value with other insurers.

Special limits apply to several categories of items.

All policies here consider digital and video cameras and personal computers to be valuables, but only half of them will also cover other electronics to the full “valuables” limits.

JetStar, Air NZ and Budget Direct

  • $3,000 to $6,000 of cover for cameras, computers, phones and other electronic devices.

Qantas, FastCover and Virgin Money

  • $3,000 to $6,000 of cover for cameras and computers and $700 to $1,000 for phones.

Sometimes these will be covered under “other item” sublimits, but sometimes they will also have their own special sublimits.

JetStar

  • $1,000 for dental prostheses, only standard “other item” cover of $600 for golf clubs.

Air NZ

  • $800 for dental prostheses, only standard “other item” cover of $700 of cover for golf clubs, unless selecting an annual multi-trip policy in which case you get $3,000 of cover for golf clubs.

Qantas, FastCover, Virgin Money and Budget Direct

  • All offer only standard “other item” cover of $700 to $750 for dental prosthetics and golf equipment.

Any item without a specially specified sublimit, such as exists for electronics and golf clubs, is only covered up to the standard “other item” sublimits.

JetStar

  • $600 for other items

Qantas and Air NZ

  • $700 for other items

FastCover, Virgin Money and Budget Direct

  • $750 for other items

Most but not all insurers will offer the option of adding extra cover for valuables, but the costs and flexibility may vary.

JetStar

  • No options for adding extra cover.

Qantas and Air NZ

  • You may add up to a total of $6,000 cover per item, and up to $15,000 of total extra cover.

Virgin Money

  • You must choose from a list of extra cover options. With this Virgin Money policy, your new chosen limits will completely replace the original limits, while the other insurers add these extra limits on top of your existing ones.

Budget Direct

  • You may add no less than $750 of cover per item, to a maximum of $4,000 per item cover.

FastCover

  • Add up to $4,500 in total extra cover.

Luggage and personal item benefit overview

JetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
Luggage and personal effects limits$10,000$15,000$12,000$7,500$10,000$7,500
Maximum item sublimit$3,000 for electronics, cameras and golf club sets$6,000 for computers, $4,000 for cameras$6,000 for electronics, $4,000 for cameras$3,000 for computers and cameras, $1,000 for phones$3,000 for computers and cameras, $1,000 for phones$3,000 for electronics and cameras
Other item sublimit$600$700 for other items$700$750$750$750
Extra cover optionsNoneUp to $15,000 total and $6,000 individualAdd up to $6,000 of cover for single items to $15,000 total increaseUp to $4,500 total extra coverChoice of extra cover options for specific item typesAdd $750–$4,000 cover up to $4,000 maximum single item limit

Medical expenses, repatriation and personal liability

Repatriation is when you are returned to home under medical supervision, while evacuation is when you are taken out of an emergency situation and transported to medical facilities. Both of these are important forms of cover because they may end up being necessary, and are always very expensive. Typically, and as is the case with all insurers here, medical evacuation and repatriation is covered under the same “unlimited” limits as other medical treatments.

Personal liability costs refer to damages for which you are legally liable, such as the cost of medical bills if you accidentally injure someone.They are usually considered one of the other travel insurance essentials along with medical cover, and are often included in medical-only travel insurance policies for this reason. Insurance policies considered here all have $1 million to $5 million of personal liability cover.

Conditions may still apply to unlimited cover, and it might be a good idea to check whether they apply to you.

  • The Air NZ policy, for example, will reduce the limits for policyholders aged 70 and above.

It is typical for policies to cover emergency dental expenses alongside their medical benefits. Emergency dental work is specified by all these insurers as treatments for sudden and acute tooth pain. In other words, this benefit is only payable towards treatments to fix pain that started occurring on your trip, not any other kind of dentistry. Another consideration which may affect your cover is whether the dental pain was caused by a specific physical injury or if it began for unknown reasons.

  • JetStar: Up to $500 of cover for emergency dental treatment, and up to $2,000 if it’s for an injury.
  • Qantas: Unlimited emergency dental cover up to four sessions, for injuries only.
  • Air NZ: $1,000 of cover for non-injury dental pain, and unlimited cover for dental injuries.
  • FastCover and Budget Direct: $500 for all emergency dental, both injury and not.
  • Virgin Direct: $1,000 of cover for non-injury dental treatment, and no cover at all for emergency dental treatment following an injury.

It’s not unusual for policies to pay out for additional hospital costs like magazines or food.

  • JetStar, Air NZ and FastCover: A $50 allowance is paid every 24 hours after you’ve been in hospital for 48 hours.
  • Qantas: A $75 allowance is paid every 24 hours after you’ve been in hospital for 48 hours.
  • Budget Direct: A $75 allowance is paid for every 24-hour period of hospitalisation with no waiting period.
  • Virgin Money: No cover for hospital expenses, and no allowance paid.

How are medical expenses covered?

JetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
Medical coverUnlimitedUnlimitedUnlimitedUnlimitedUnlimitedUnlimited
Hospital expenses$50/day after 48 hours$75/day after 48 hours ($5000 max.)$50/day after 48 hours ($8000 max.)$50/day after 48 hoursNone$75/day, no waiting period
Emergency dental$500 for acute dental pain OR $2,000 for reasonable overseas dental following injuryUnlimited cover for up to 4 treatment sessions for injury to healthy teeth$1,000 for acute non-injury pain, unlimited for dental injury$500 for reasonable dental expenses, injury or not$1,000 for non-injury dental treatment$500 for any dental treatment
Personal liability$2.5 million$3 million$3 million$5 million$1 million$5 million

Cover for children and partners

You might also choose a different policy based on who you’re travelling with. Group travel insurance is typically a good option for people travelling in non-family groups. Couples travel insurance can be a cost-effective way of delivering equal protection for two travellers. Most providers offer complimentary cover for dependent children under the age of 21.

The policies compared on this page are all individual ones, but they also still include varying levels of added cover for family and dependants. Some policies will also include the same level of protection for accompanying children, except with lower limits and sublimits.

  • JetStar includes free cover for any infant under the age of two who is sharing a plane seat and ticket with the policyholder.
  • Qantas includes a limited level of cover for accompanying children, defined as children under the age of 12 who are related to and travelling with the policyholder.
  • Air NZ, FastCover and Budget Direct include some cover for dependants under the age of 21 who are not working full-time.
  • Virgin Money includes some cover for dependants under the age of 25 who are not working full-time.

If you’re travelling with children, it can be worth looking for an insurer who covers them under the same policy as you.

JetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
Child coverIncluded cover for infants under 2Limited cover for children under 12 related to the policyholderLimited cover for accompanied children under 21 and not working full-timeDependants under 21 covered at extra premiumDependants under 25 covered at extra premiumDependants under 21

What won't usually be covered?

Common exclusions across all cover options include:

  • Acts of war or terrorism
  • Losses which are recoverable from other forms of insurance
  • Self-inflicted losses, or those caused by reckless behaviour or being under the influence of alcohol or nonprescription drugs.

Any losses which were the result of these or other general exclusions are not covered, even if the activity you were doing at the time is covered under the terms of the policy.

How do these insurance policies cover:

  • Qantas will cover you for motorcycling without restriction (assuming you’re not racing, driving professionally or otherwise performing an excluded activity).
  • Air NZ and JetStar require you to hold a motorcycle licence in the country you’re riding in.
  • FastCover and Virgin Money will accept either an Australian or destination country rider’s licence as valid.
  • Budget Direct only accepts Australian motorcycle licences.
  • Budget Direct, Air NZ and Virgin Money specify engine capacity limits of 125cc, 200cc and 250cc respectively.
  • Qantas and Air NZ cover aerial sports except for BASE-jumping and hang-gliding respectively.
  • JetStar and FastCover do not cover aerial sports with the exceptions of parasailing and hot air ballooning.
  • Virgin Money does not cover any aerial pastimes.
  • Budget Direct will only cover up to three bungee jumps, as well as unlimited hot air ballooning and parasailing.
  • Qantas does not have any specific exclusions for diving, but general exclusions may still apply.
  • Budget Direct specifies that you must not go beyond 30 metres deep, must be appropriately qualified and cannot dive alone.
  • Jetstar and Air NZ specify that you must either hold a relevant licence or be diving under the supervision of an instructor. No depth limits apply.
  • FastCover and Virgin Money specify that you must hold an appropriate licence or be under supervision, and cannot exceed depths of 10 metres.
  • None of the listed insurers will cover you for mountaineering or climbing if you are using ropes or other climbing equipment such as oxygen.
  • FastCover and Virgin Money also specify a 3,000m altitude limit. Both also exclude the Kokoda Trail from this, meaning you’re covered on it regardless of altitude or equipment use.
  • Budget Direct will cover you for climbs of up to 5,000m, but also specifically excludes ice climbing and equipment usage, making this added height limit functionally useless.
  • JetStar includes built-in skiing cover with its international comprehensive travel insurance.
  • The other five insurers do not offer any form of snowsports cover without purchasing extra cover.
  • FastCover will cover you off-piste, but not backcountry, with the snowsports add-on.
  • Budget Direct will only cover you off-piste in the presence of a professional instructor or guide.
  • Qantas will cover you without any on- or off-piste restrictions, provided you have the snowsports add-on.
  • Virgin Money will cover you for snowsports on- or off-piste with the additional cover.
  • Air NZ requires you to purchase the snowsports extra cover, but does not offer any cover off-piste.
  • None of the policies listed will cover you for any form of racing, except on foot.
  • FastCover and Virgin Money have additional restrictions on footraces and will not cover you beyond 42.2 kilometres, the distance of a full marathon.
  • FastCover and Virgin Money include a list of sports that are covered, and exclude cover for the sports not on that list.
  • JetStar, Air NZ and Qantas all have a list of sports that that are not covered and generally cover sports not on that list.
  • Budget Direct has both a list of sports that are and are not covered.
ExclusionsJetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
MotorcyclingIf no licence in current countryNo restrictionsIf over 200cc, four-wheeled, when not wearing a helmet, or if no licence in current countryIf no valid Australian or destination country licence, no helmet, no quad bike cover without optional adventure coverIf no valid Australian or destination country licence, no engine capacity greater than 250cc, no quad bike without extra cover optionIf no valid Australian licence or over 125cc
Aerial sportsAll except parasailing and hot air ballooningBASE-jumpingHang-glidingAll except licensed hot air ballooningAll aerial sports excludedAll except up to 3 bungee jumps, hot air ballooning, parasailing
Underwater sportsWhen using an artificial breathing apparatus without holding an open water license or being in a lesson with a qualified instructorNo restrictionsWhen diving without an open water license or without a qualified instructorWhen diving at depths greater than 10m and/or without a valid licenceWhen diving at depths greater than 10m and/or without a valid licenceWhen unqualified and diving without an instructor, or when diving alone or at depths greater than 30m
ClimbingIf using ropes or climbing equipmentIf using support ropesIf using ropes, equipment or oxygenIf above 3,000m altitude or using specialist climbing equipment (unless it’s the Kokoda Trail)If above 3,000m altitude or using specialist climbing equipment (unless it’s the Kokoda Trail)If above 5,000m altitude
SnowsportsNo exclusions apply, but gear not covered while in useAll unless you have snowsports coverAll unless you have snowsports cover; no cover off-piste at any timeAll unless you have snowsports coverAll unless you have snowsports coverAll unless you have snowsports cover
Other sportsHunting, polo, potholing, sailing in international waters, or any professionallyRunning with bulls, any professional sportsHunting, polo, running with bulls, rodeo riding, BMX, or any professionallyAny sport or activity not specifically mentioned on p.10 of the PDSAny professional sport, any not specifically mentioned on p.16 of the PDSAny sport or activity not mentioned on pp. 41–46 of the PDS
RacingAll unless on footAll unless on footAll unless on footAll unless on foot and no more than 42.2kmAll unless on foot and no more than 42.2kmAll unless on foot

Other considerations

As you compare policies, there are other considerations worth looking at.

Excess: Typically, a separate excess will apply for each claim. This is a first portion of the loss that you must pay when making a claim, typically about $100 to $200. Most insurers will give you a no-excess option at the cost of raised premiums, or will let you opt for a higher excess to lower your premiums.

  • Air NZ and Virgin Money do not have a standard excess and instead let you choose your own.
  • JetStar and Qantas have a $100 standard excess.
  • FastCover and Budget Direct have a $200 standard excess.
Policy providerStandard excess
JetStar$100
Qantas$100
Air NZVariable
FastCover$200
Virgin MoneyVariable
Budget Direct$200

Depending on the insurer and the policy, the standard excess applies to different types of cover.

BenefitJetStarQantasAir NZFastCoverVirgin MoneyBudget Direct
Medical, dental and related expenses
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
Cancellation fees and lost deposits
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
Luggage and personal effects
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
  • No excess
  • Standard excess applies
Lost or stolen cashNo cover
  • No excess
  • No excess
  • Standard excess applies
  • Standard excess applies
  • Standard excess applies
Lost or stolen travel documents
  • Standard excess applies
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
  • No excess
Luggage allowances and extra benefits
  • No excess
  • No excess
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
Rental car insurance excess
  • No excess
  • No excess
  • No excess
  • Standard excess applies
  • No excess
  • No excess
Travel delays and emergency accommodation
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
  • No excess
  • No excess
Special events and alternative transport
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
  • No excess
  • Standard excess applies
Resumption of journey
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
  • No excess
  • Standard excess applies
Loss of income or disability
  • No excess
  • No excess
  • No excess
  • No excess
  • No excess
  • No excess
Accidental death
  • No excess
  • No excess
  • No excess
  • No excess
  • No excess
  • No excess
Personal liability
  • Standard excess applies
  • Standard excess applies
  • No excess
  • Standard excess applies
  • No excess
  • Standard excess applies

Other pros and cons of airline travel insurance

There can be some intrinsic advantages and disadvantages to airline travel insurance that you won’t find in the policy, and it may worth keeping these in mind as you go over the other cost and policy differences.

AdvantagesDisadvantages
  • You may access rewards, bonuses or complimentary extras with certain airline travel insurance policies, so even if you don’t use the cover you’re still getting something out of it.
  • You may lose your travel cover if the airline goes out of business.
  • A quick, easy and convenient way of bundling travel cover with ticket purchases.
  • You can only get cover from the airline you’ve booked with and cannot shop around for other providers.
  • Airfares, lost luggage and other airline-related claims can be simpler when your carrier is also your insurer.
  • There is a limited range of policy types to choose from. Effective cover may not always be available
  • Beware of opt-out cover. Airline travel insurance may take the form of opt-out cover, meaning it’s included by default with the cost of your airfares. If you don’t want it, make sure you’re not accidentally paying for travel insurance along with your airfare when you don’t want to.

So which is better, airline travel insurance or direct travel insurance?

For the six policies reviewed here, the clearest difference between airline and direct travel insurance policies was the price, while the actual cover depends more on the specific policy than the type of travel insurance.

  • Price vs cover. Airline travel insurance was more expensive, but also generally offered more “one size fits all” benefits than the direct policies, especially in terms of activities covered while overseas.
  • Customisability. Airline cover may initially appear more expensive but can also come with more comprehensive cover, without you needing to customise your policy at extra cost. The JetStar policy, for example, includes built-in snowsports cover while the other policies only have it as an extra.
  • Convenience and other benefits. Many people might be willing to pay extra for the convenience offered by airline travel insurance, or for the possibility of earning additional airline points. Conversely, it might be worth paying a bit more for a direct insurance policy if it also entitles you to a multi-policy discount or if it’s otherwise easier or more convenient.
  • Choosing the right policy for you. The JetStar policy might not be value for money on a tropical getaway but might be cost-effective cover if you’re planning on skiing. The most ideal cover for you could be either a direct or an airline travel insurance policy – neither should be immediately ruled out.

Consider the travel insurance options offered by your airline alongside other cover. You can only get insurance with your chosen airline, so it’s only one or two more policies to consider. You might compare your available airline travel insurance alongside your shortlisted direct travel cover options, and simply rule it in or out depending on whether it can compete. Always ensure you read the policy document to know exactly what you will be covered for and the policy benefit levels.

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Andrew Munro

Andrew writes for finder.com.au, comparing products, writing guides, sniffing out deals and looking for new ways to help people get the most out of their money.

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