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.

Receive quotes from direct travel insurance brands

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.

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

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:

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.

Compare travel insurance quotes from over 20 Australian brands

Made a search before? Retrieve your search results

At least one destination is required
Both dates are required
Add more travellers
Enter the age of each traveller between 0 and 99

Enter a valid email address

At least one destination is required
Starting date is required
Add more travellers
Enter the age of each traveller between 0 and 99

Enter a valid email address

Type or Select your destination(s)

Popular Destinations

Americas
Asia
Europe
Pacific
Africa
Can't find your destination? Just type it in the box above.

We compare products from

By submitting this form, you agree to the finder.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.
Picture: Shutterstock

Andrew Munro

Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.
Ask a question
Go to site