Do I really need travel insurance for domestic trips within Australia?
Seeing the beauty that Australia has to offer is undeniably exciting. But regardless of whether you're venturing into the outback or relaxing at one of our beautiful beaches, you may be exposed to scenarios where you could encounter a mishap. For this reason, you should consider adding domestic travel insurance to your list of must-haves.
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What's the point of getting insurance if I'm only travelling domestically?
Domestic cover provides affordable protection for the many other financial losses that you may experience while travelling such as flight cancellations, car rental excess charges and stolen luggage.
Cover from your airline will usually only cover cancelled flights and loss of luggage and has quite low cover levels. Car rental excess cover can be upwards of $15 a day...quite a shock when you consider most domestic policies go for between $30-$50* for a two week period.
Domestic travel can be covered credit card travel insurance, however you'll typically need to purchase your trip with your credit card with a minimum spend. You'll also need to pay a larger excess if you have to claim.
10 mishaps that can occur when travelling in Australia
|Feature||How could travel insurance help you?|
|1. Cancellations||You are covered for cancellation fees and lost deposits for events outside of your control. This includes injuries, strikes, collisions, natural disasters, retrenchment and more.|
|2. Rental excess||You are covered for excess charged at a a cheaper cost. You are covered for excesses that are charged if vehicle is damaged or even stolen during the period.|
|3. Lost and stolen items||You are covered for accidental loss, theft and damage to items and even cash. Most policies also apply a daily allowance to buy essentials if your luggage is lost.|
|4. Additional expenses||Additional expense cover provides a benefit payment to reimburse the costs of any additional accommodation, food, telephone and travelling expenses if your trip is disrupted.|
|5. Travel Delays||Travel delay cover provides a benefit payment for accommodation and food expenses if your transport carrier delays you.|
|6. Special events||You are covered for the additional cost of transport to a wedding or conference if your trip is delayed.|
|7. Accidental death||You are provided with a benefit payment to your spouse or dependant children. Cover includes loss as a result of an accident or terrorist attack or due to the disappearance of transport carrier on your trip.|
|8. Accidental disability||Provides cover for accidents caused by violent, external and visible means that results in permanent loss of sight in one or two eyes and the use of one or more limbs within 12 months of the policy being taken out.|
|9. Travel service provider insolvency||Reimbursement for reasonable costs if your travel services provider financially defaults.|
|10. Hijacking||Provides your family members or dependents with financial cover for each day you are held captive.|
Traps to watch out for when choosing a domestic policy
Every year there are stories of people left devastated after learning their domestic travel insurance policy was unable to provide a benefit for their claim because it fell outside of what was covered in their policy. Here are some key tips to avoid taking out insurance that leaves you exposed in the event of a loss.
- Cheapest isn't always best. While it is important to find a competitively priced policy, basing your purchase purely on price may leave you drastically under-protected. Research the policy features on offer and know what you are covered for. Cheaper cover will often have higher excess charges and greatly reduced benefit levels.
- Watch out for credit card insurance. If you are relying on insurance provided from your credit card provider make sure you know what you stand to receive in the event of the claim. While this may be an affordable option, credit card travel cover will often include a range of exclusions that you may require cover for.
- Per-item limits. It is crucial to know the conditions for payments for lost luggage and expensive items. While the policy may state "up to $5,000 cover for lost items", there may only be a benefit of $600 per item provided. These sub-limits are often applied to expensive items.
- Read the fine print closely. While it may be a tedious process, it is crucial to read closely through the policy terms and conditions to know when a benefit will and won't be paid.
- Keep proof of purchase. It's not uncommon for travel insurance brands to require policy owners to provide proof of purchase on expensive items before making a benefit payment. It is important to be clear on what your insurer requires in order to make a successful claim. For some a photo of the item may be enough but others will require a copy of the receipt.
- Cover for the activities you plan to do on your trip. If you are participating in particular sports or activities on your trip it is important to find out whether or not it will be covered.
- Successful claim. In the event that you need to make a claim on your domestic travel insurance, it is essential you take the necessary steps to follow the requirements of the policy as closely as possible. While it may be tedious, doing this will ensure the full claim is paid and there is no delay for the payment.
6 tricks to finding better travel insurance deals
There is an old saying in the insurance industry that if you can't afford travel insurance, you can't afford to travel. While the decision on what cover to take out should never be based purely on price, it is important to take the necessary steps to avoid overpaying for cover not tailored to your needs. Many people are surprised at how affordable domestic travel cover can be if they take the right steps to consider what they actually need cover for and weigh up the different options available.
1. Assess what other cover you already have in place. It is worth reviewing what other types of insurance you have in place that would be able to provide a benefit in the event of certain losses occurring. For example, your current car insurance policy may provide cover for rental vehicle excess or your home and contents insurance may provide cover for loss of valuable items and luggage. Similarly, you may be entitled to compensation from your transport for losses that have occurred during transit. The discovery of this additional cover may lead you to taking out a more affordable basic form of cover.
2. Compare basic and comprehensive options. Most insurers will offer both basic and comprehensive domestic travel insurance options. It is worth reviewing both to see what is more suitable for your situation. The reduced selection of benefits on a basic plan may still be suitable for your situation.
3. Compare pricing from different providers. While this may be an obvious one, the majority of people will still take out cover with the first provider they come across or one that they have heard of previously. It is essential to review different pricing from a number of providers and take the time to ensure you are receiving an adequate level of cover.
4. Go online. Domestic travel cover provided by insurance agents or airlines is generally more expensive because they earn commission on the sale of the cover. Taking the time to go online and hunt out a policy yourself may save you a significant amount of money.
5. Annual or single-trip. If you are a frequent traveller you may benefit from taking out an annual policy to provide cover for multiple trips under a single policy. This option is usually only suitable for people that travel 3 or more times per year.
6. Review expensive items. Before taking out extra cover for expensive items, it is important to review if the items you are looking to cover are not under the cover threshold already provided. As an example, OneCover will provide cover for items that have a value of up to $750 with laptops, handheld computers, cameras and computers covered up to $5,000.
Is travel insurance worth it for domestic flights?
By compiling the average cost of domestic travel insurance policies on finder.com.au and the average cost of a flight from Sydney to Melbourne, we've determined that a $47 domestic travel insurance policy (price quoted on October 2015) is a small price to protect a potentially larger expense if you have to cancel your flight for reasons outside of your control.
How much will domestic travel insurance cost me?
Cost of domestic travel insurance is an average based on policies for a one-week trip, for a 32 year old traveller. Cost of the flight is based on the average online cost of a return flight from Sydney to Melbourne on 28 October 2015.
How does it compare to cover offered by my airline?
Airlines do have the option to purchase travel insurance through them. However, it's easy to see that the level of coverage is noticeably different when taking out an independent domestic travel insurance policy. The following chart highlights how airline cover sizes up against standalone travel insurance.
Jetstar vs Tiger vs Domestic Travel Insurance
|Feature||Jetstar||Tiger||Domestic Travel Insurance|
|Cancellation of ticket||$5,000||$4,500||$10,000|
|Car rental excess||$0||$0||$5,000|
|Resumption of journey||$750||$700||$6,000|
Note: Cover amounts last checked 2016. Domestic travel insurance cover amounts are for illustrative purposes only and is not representative of all products in the market.
What will I actually be paid for my trip cancellation?
Domestic travel insurance offers a cancellation cover to cover a range of pre-booked expenses in the event that you need to cancel your trip due to unforeseen circumstances.
What cancellations will you usually be covered for?
- Travel expenses
- Accommodation expenses
- Pre-paid meal expenses
- Cancellation for flights and accommodation
- Unforeseeable death, injury or illness of relative that resides in Australia
- You have to go to court or have jury duty
- Accident in vehicle you were planning to use on a self-drive trip a week before you planned to travel
- You are a member of the armed forces, police, fire, nursing or ambulance services and are required for duty
- You are made redundant, provided you are eligible for redundancy payments as defined under current law
- You need to stay home due to flood, fire, storm or burglary in your place of residence a certain period of time before you planned to leave
I travel often - what are my options?
If you are someone that travels regularly each year, it might be worth looking into annual multi-trip insurance to cover you for multiple trips over a 12-month period. Most insurers will offer both single-trip and annual cover for frequent travellers.
- What are the benefits of taking out an annual policy? An annual policy can offer both convenience and great savings, as you will only need to apply for cover once and have the peace of mind that you are covered for all domestic journeys you take in any 12-month period. This option can be much more economic than applying for multiple policies over the course of a year.
- Who should consider an annual domestic travel insurance policy? An annual policy is only really suitable for people that travel 3 or more times per year. If you only need cover for 1-2 trips, it is probably more economic for you to take out a single-trip policy. Most insurers will not provide annual policies to travellers over 60 years of age, as they need to assess any health risks that they may present. Annual policies are also a great option for people that need to travel last minute for business.
- Can I get an Annual Policy to cover both international and domestic trips? Yes, it is possible to get an annual policy that will cover both trips within Australia and trips overseas. This could be a good option if you're looking to take a cruise trip but stopping off at Australian ports, your work see's you regularly travel both interstate and abroad or if you just love to getaway both within Australia and overseas. It is important to note that not all insurers will cover both domestic and international trips so make sure you check the terms and conditions.
Common questions when it comes to domestic cover
Q. I’m already covered by Medicare...is it worth it?
A. You might already be covered by Medicare or private health insurance but what about cover for cancelled flights, lost luggage, car rental excess charges. These are just some of the things a domestic policy can cover. With a two-week domestic policy starting at as little as $35*, it’s a little expense for great peace of mind.
Q. Will I be covered by Medicare if I go to see a doctor in another state?
A. Yes. Medicare will cover you regardless of what state you are travelling in.
Q. How does it compare in price to cover from an airline?
A. Airline baggage and ticket cancellation cover usually starts from around $15. For only about $10* more, domestic travel insurance can cover you for a whole range of other losses.
Q. I am over 70. Can I take out cover?
A. Yes. Most insurers will cover you if over 70 years of age. In some cases you may be required to submit details of your medical history in order to take out cover.
Q. Can I extend my policy?
A. Yes. You can contact your insurer while the policy is still active to request an extension. You may be required to provide reasoning for extension of your policy.
Q. How long will it take to claim?
A. This may vary between providers though generally claims can be settled within 10 days of the claim being made. In some cases the insurer may request further information, which may delay the claim further.
Q. Can I wait till I return home from my travels before claiming?
A. Yes. Provided it is within the required timeframe (usually between 30-60 days). That said, it is usually much less hassle if you just contact the insurer immediately so you know if you need to provide any further evidence.
Q. Am I covered by home and contents insurance for lost items?
A. Some home and contents insurance policies will provide you with cover for lost items even if you are travelling within Australia. If this is the case, your Home and Contents insurer may be liable to pay a portion of the claim.
Q. Do I have to be a certain distance from my home for cover to apply?
A. In most cases yes. Most insurers will require you to be at least 200km from your place of residence for your domestic policy to apply.
Q. Cover on my credit card enough?
A. Most credit cards don't offer cover for domestic travel, only for international trips. That said, there are some cards that will offer cover for cancelled flights, delays and missed connections under "inconvenience cover". Find out more about how credit card travel insurance compares to standalone cover.
Q. Would I be covered for cancellation if I am unable to travel for work reasons?
A. Trip cancellation for work reasons may be covered in the event of retrenchment or if you are required to work because you are part of an emergency service i.e. defence forces or fire-fighter.
Q. I’m taking a cruise in Australian waters...is domestic travel insurance enough?
A. You will not be covered by Medicare or Private Health Insurance for any medical related losses while at sea, even if travelling between Australian ports so it’s definitely worth taking out an international policy. Learn more of the benefits of cruise travel insurance.
Q. Is Norfolk Island covered under domestic policies?
A. There are no Medicare benefits for Norfolk Island so you will need an international policy. As an example, for the provider Covermore, this would fall under region Indonesia, South West Pacific, Norfolk Island and New Zealand.
Q. Will my credit card cover me for domestic flights?
Depending on the card, you are covered for cancellation of domestic travel arrangements if you must cancel for reasons outside of your control. Reasons include:
- If you, or a relative passes away, becomes seriously injured or becomes seriously ill
- You are quarantined
- Participating cardholder or spouse is unexpectedly retrenched
What you need to be aware of:
- Travel arrangements must be booked using the credit card
- A minimum spend on travel arrangements with card is required for cover to be activated
- The excess tends to be higher than standalone policies with no option to remove the excess charge. The excess may end up being more than the price of your flight!
- Personal computers, electronic equipment, jewellery or watches checked-in as luggage is usually not covered
- Cover is usually not provided for business-related trips
Q. Will my airline cover me if I have to cancel my flight for reasons outside of my control?
- No, this is where it is important to consider travel insurance
Q. Will my airline reimbursed my if my flight is cancelled or delayed?
- If your flight is delayed or cancelled by the airline, they will attempt to rebook you on the next available flight on their services at no extra cost.
- Alternatively, if the airline is unable to rebook you on the next flight, the applicable fare will be refunded
- The airline will not be responsible for any additional cost that you incur as a result of cancellation. This is where travel insurance comes in
The airline will not be responsible for any additional cost that you incur as a result of cancellation. This is where travel insurance comes in.