Do travel insurance companies pay claims?
What are your chances of making a successful travel insurance claim?

Nearly 90% of all travel insurance claims are paid out. That means if you have to claim, you're almost certain to have your claim accepted.
But don't get too excited – the 11% denial rate for travel insurance is higher than almost every other category of insurance.
Let's look at why this might be, so that you can avoid being part of the percentage of Aussies whose claims have been denied.
The bottom line is that people are taking out travel insurance without knowing what's in it. Then they make a claim, thinking they are covered, and are later surprised when they find out they aren't covered at all or have disqualified themselves in some way.
As many as 36% of 18-29 year olds with travel insurance do not look at their policy documents at all, according to a DFAT study. For those over 30, it's a little better at just more than 21%.
That's a big chunk of people, and it's no surprise their claims are being denied – not because the insurers are stingy but because they may not have read the fine print.
One of the reasons travel insurance claims may be disproportionately turned down is that people haven't understood what's covered (and what's not!) and travel insurance policies can be cheap enough that it doesn’t seem worth it. Very few people would dream of signing up for a life insurance policy without going through it in detail, but a lot more people are happy to do this with travel insurance.
These problems can be compounded by there being different types of travel cover available, including complimentary credit card travel insurance which carries additional eligibility requirements. Common reasons for rejection include:
Standalone travel insurance | Complimentary credit card travel cover |
---|---|
Pre-existing medical conditions not declared | Did not meet the credit card activation criteria |
The claim was due to a close relative who did not meet age criteria | Pre-existing medical conditions |
The claim was because the airline had rescheduled flights | The claim is not covered by the terms of the policy |
Did not meet travel delay timeframes | Failed to prove ownership of items claimed as lost or stolen |
Failed to prove ownership of items claimed as lost or stolen | The value of the excess was more than that of the claim |
Across both types of policy, the most common reason for rejected claims is that policyholders did not meet all requirements. In all cases, this top reason for rejected claims is explained in the insurance PDS.
Overall, the claims rejection rate is disproportionately high for travel insurance compared to other types of policy, but the vast majority, more than 90%, of claims are successful.
In many cases the reason for rejected claims comes down to the question of whether or not Australians really understand travel insurance.
Most denials happen because people don't know what's in their policy and end up making errors that can't always be fixed. Here are the reasons why claims are commonly denied:
Response | 75+ yrs | 65-74 yrs | 55-64 yrs | 45-54 yrs | 35-44 yrs | 25-34 yrs | 18-24 yrs |
---|---|---|---|---|---|---|---|
Yes,it was successful | 30.23% | 16.77% | 7.6% | 6.76% | 6.3% | 9.71% | 12.86% |
No | 16.28% | 22.98% | 15.79% | 16.43% | 16.14% | 15.05% | 17.14% |
Yes,it was unsuccessful | 0.62% | 0.58% | 0.97% | 0.39% | 2.86% |
The DFAT survey shows that a lot of Aussies are travelling without cover, and many do not understand some very important elements of travel.
One of the most glaring misconceptions was that more than half of young people surveyed thought the Australian government would arrange and pay for them to get home in the event of a medical emergency, or would pay for overseas medical bills. This is simply not true.
Amidst all the justifiably turned-down claims it’s possible for valid claims to slip through the cracks too. When this happens you can turn to the Australian Financial Complaints Authority (AFCA) for an independent third party resolution.
Follow these three steps to take action against a rejected claim.
It’s preferable not to contact the FOS at all if you can help it, but it can be an effective way to resolve disputes. The most effective way is to ensure that you look at the details of each policy when getting travel insurance quotes and comparing policies online.
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If cruising around the coast of Australia what if any insurance would I need at 82 years old?
Hi Jeff,
You won’t be covered by Medicare while on a cruise, even if you’re in Australian waters. We have guides on cruise travel insurance and domestic travel insurance that might be useful for you.
I hope that helps.