Is travel insurance worth it?

If you've been counting down till your getaway, the last thing you want to think about is something going wrong. But between flight delays to last minute cancellations or unexpected medical hiccups, it's a lot more common than you think.

According to figures from the Australian Bureau of Statistics (ABS), 11.5 million Australians headed overseas in 2024, surpassing pre-pandemic levels.

While travel insurance may just feel like another expense, it can actually be a lifesaver when you need it most. Think about it this way, Finder data found that the average cost of a travel insurance policy in 2025 was $235.05, while the cost of just a hospital bed in the U.S is $2,260 a day, 28 times more expensive than paying for a 2-week medical-only travel insurance policy.

So while there's every chance you won't need to use your travel insurance and lose out on a few hundred bucks, is it really worth the gamble?

What does travel insurance actually cover?

Finder research from 2024 found that 1 in 4 Australians experienced a travel mishap — 15% endured travel delays while 5% lost their luggage, both of which would be covered under a standard comprehensive travel insurance policy. So, if you’re wondering what kind of coverage you can expect when you start shopping around, we’ve listed a few key areas below:

• Medical expenses. From the US to Japan, medical attention overseas is incredibly expensive, upwards of thousands and thousands of dollars. While some countries have a Reciprocal Health Care Agreement with Australia and provide subsidised healthcare, you’ll have to pay for your own medical expenses everywhere else - or take out travel insurance.
• Lost luggage and travel documents. Unfortunately, travellers lose or have their luggage misplaced all the time. Aside from the incredible inconvenience, if you’re planning on taking expensive items with you (like a laptop), you may not be able to afford a replacement. Travel insurance can reimburse this expense so you’re not left out of pocket.
• Trip cancellations or delays. No matter how tight your itinerary is, there are a lot of things outside of your control. Between wild weather to medical emergencies, your trip could be delayed or cancelled at a moment’s notice. Having a travel insurance policy can ensure you get back your deposits or receive compensation to resume your journey.
• Sports, cruise and other activities. If you plan on hitting the slopes, hopping on a cruise or trying your hand at a moped, travel insurance can cover you for claims relating to adventure or winter sports. However, these aren’t a standard feature - you will need to purchase additional cover for these.
• Car rental excess. Depending on where you’re headed, hiring a rental car may be the only way to get around. However, if you get into an accident or the car is stolen, you could be slapped with a hefty excess from the rental car company. Selecting a policy that covers car rental excess could save you thousands.
• Personal liability. If you’re responsible for causing bodily injury to someone else or for damaging someone else’s property on your holiday, you could find yourself being sued for damages or compensation. Your liability for damages, compensation and legal fees could total hundreds or thousands of dollars. Travel insurance often automatically includes personal liability cover of up to $2.5 million, giving you financial peace of mind.

Does travel insurance offer value for money?

To decide whether travel insurance is worth the expense, you’ll first need to figure out how much it actually costs. Of course, the premium is influenced by a wide range of factors, including:

• Where you travel
• The length of your trip
• The age of travellers
• The level of cover you choose

For example, let's assume you're a 40-year-old planning a 30-day holiday to Europe. Using the finder.com.au travel insurance quote engine we can work out that:

• World2Cover Basics travel insurance costs $139.32
• World2Cover Essentials travel insurance costs $218.61
• World2Cover Top Cover travel insurance costs $312.31

Prices correct as at 24/11/25

Since quotes can vary widely, it's highly recommended to shop around rather than purchasing the first policy you see. Comparing quotes could see you take out a decent level of cover without the flashy price tag.

You can compare travel insurance policies from more than 15 providers using Finder's travel insurance quote engine. All you need to do is plug in a few details about your trip and you'll be able to compare a list of quotes to help you find the best deal.

Is travel insurance a rip-off? Here's the truth

If there's one thing we hear all the time from Aussie travellers, it's horror stories about big travel insurance claims being rejected. And as a result, many believe it to be a product that's "poor value" or a "waste of money."

In fact, according to research from the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade (DFAT), more than a quarter (27%) of travellers who travelled without insurance did so because they felt that travel insurance offered poor value.

However, in most cases, there are very valid reasons why insurers refuse claims, and those reasons have nothing to do with ripping you off.

So, why does travel insurance have a bad reputation? There are a few factors:

• Some people don't understand how their policy works. Far too many people have unrealistic expectations of what their policy covers. Remember, travel insurance is there to protect you against unexpected mishaps and disasters, not against problems that could've easily been avoided. With this in mind, it's essential to read the PDS to find out what your policy won't cover, such as:

• Claims that arise because you're drunk or under the influence of drugs
• Claims caused by you breaking the law
• If you travel against medical advice
• If you visit a country for which the Department of Foreign Affairs and Trade (DFAT) has issued a "Do Not Travel" advisory
• If you cancel a trip because you change your mind

• Some people pay for cover they don't really need. Are you fully aware of everything your policy covers? For example, are you paying for car rental excess insurance when you don't plan on renting a car? Have you included optional snow sports cover even though you'll just be travelling to the snow, not actually hitting the slopes?
• Some people don't take full advantage of the benefits available. Some travellers are unaware of the range of benefits included in their policy and so don't take full advantage of the cover available. These include free cover for children on family policies, car hire excess cover, 24/7 emergency assistance and cover for pet boarding costs if your return home is delayed by circumstances beyond your control.
• Some people don't understand that travel insurance is there as a safeguard. Travel insurance is there to protect you against a wide range of worst-case scenarios including medical emergencies, rental car accidents and stolen luggage. While it may not provide a high level of cover for smaller claims – for example, if you make a claim when $100 is stolen from your wallet, after paying the $100 excess you won't receive any payout – it can make a huge difference in those situations that could potentially cost you lots of money.

What about domestic travel insurance?

One of the main reasons people get travel insurance is because it covers international medical expenses. But if you’re only travelling in Australia, your healthcare costs can be covered by Medicare – so do you really need to bother with travel insurance?

The answer really comes down to personal preference. While it’s true that you don’t need protection for expensive medical costs, the other benefits domestic travel insurance provides shouldn’t be sneezed at. These include cover for:

These risks are just as prevalent in Perth as they are in Peru, Paris or Phuket, so the financial protection domestic travel insurance offers can be crucial. Carefully consider the trip you have planned and the financial consequences should something go wrong before deciding whether you need insurance.

Where to find the best travel insurance in Australia

Any highly anticipated holiday deserves the best travel insurance policy on the market. Every year, we scour the market to find the best travel insurance policies in the country, taking the fuss out of shopping around.

Here are the 2025 winners for the best travel insurance:

• Best International Comprehensive: Southern Cross Travel Insurance. Southern Cross Travel Insurance took out the title of best comprehensive travel insurance provider for 2025. The insurer has no restrictive age limits, offers generous cover of $25,000 for luggage and personal items and gives you the option to extend your cover in line with your trip.
• Best Travel Insurance (Domestic): Tick Travel Insurance. Tick was awarded the title of the best domestic travel insurance provider for 2025. There's 3 levels of cover, plus cover is free for children under 18 travelling with parents.

How can I save money on travel insurance (and get value for money)?

Want to make sure your travel insurance is worth every cent? Remember the following tips:

• Don’t buy a policy just because it’s cheap. Price will also be a consideration when choosing a policy, but it shouldn’t be the only factor you take into account. If the cost of cover sounds too good to be true, it may be exactly that.
• Check what’s covered and the benefit limits. To determine whether a policy really offers value for money, check the table of benefits to find out what’s covered and to what limit.
• Read the list of exclusions. Next, check the list of general exclusions to find out what’s not covered, and make sure you’re fully aware of the events and circumstances that will cause your claim to be refused.
• Compare your options. Don’t just buy the first policy you find; shop around and compare policies from a variety of insurers to lock down the best deal.
• Disclose pre-existing conditions. Declare any pre-existing medical conditions to your insurer if they are not automatically covered. This will allow the insurer to pre-assess you and decide if they can cover your pre-existing medical conditions beforehand. While this may result in a higher premium, it’s a much better alternative to having your claim refused altogether.
• Buy extra sports cover. Want to go paragliding, rock climbing, or participate in any other extreme sport? Make sure your policy covers adventure activities.
• Increase valuable item limits. Be aware of any sub-limits that apply to your luggage and personal items – for example, while your insurer may offer $3,000 cover in total, it may limit the maximum it will pay for any individual item to $500. This could be insufficient to replace valuable items like smartphones and tablets, so check to see whether there’s an option to increase the limit for specified items.
• Take advantage of discounts. Multi-policy, loyalty and buy online discounts can cut the cost of premiums, while travel insurance coupon codes can also help you save.
• Don’t buy from a travel agent or airline. Policies purchased from airlines and travel agents are significantly more expensive than policies purchased directly from the insurer online.
• Consider a multi-trip policy. Buying a single-trip policy for every individual trip you take can become expensive. If you’re a frequent traveller, you can save money by purchasing annual multi-trip cover that covers all your journeys for the next 12 months.
• Choose a higher excess. Are you discouraged from buying travel insurance by the fact that you’re paying for something you may never use? By increasing the excess payable at claims time, you can enjoy a cheaper premium, meaning you’ll only take a bigger financial hit if you actually need to claim.
• Use common sense at claims time. If you need to make a claim, get in touch with your insurer as soon as possible. Time limits apply to when you can claim, and you should also make sure to promptly provide any documentation requested by the insurer to support your claim.

Can't I just use my credit card travel insurance?

While credit card travel insurance has the benefit of being free (or at least only cost you what your annual fee does), it does have its shortcomings. They include:

• Lower benefit limits. Credit card travel insurance typically offers lower benefit limits than a standalone travel insurance policy. For example, cover for overseas medical expenses is capped at $500,000 while many standalone policies offer unlimited protection.
• Limited trip duration. Credit card travel insurance often has a maximum trip duration of around 90 days.
• Higher excess charges. Your excess charges are usually higher when you make a claim on credit card travel insurance.
• Most pre-existing conditions are not usually covered. Credit card travel insurance usually excludes all pre-existing conditions from cover.
• You must pay for the trip with your credit card. In order to activate cover, you’ll need to purchase your trip with your credit card.

Taking out a standalone policy is recommended in order to overcome the shortfalls that come with credit card travel insurance. Have a look at our detailed pros and cons of credit card vs standard travel insurance if you're not convinced.

The final word: Is travel insurance worth it?

Whichever way you look at it, buying or going without travel insurance is a gamble. If you buy cover for your trip, there’s every chance that you won’t actually have to use it. This could make travel insurance seem like an unnecessary extra expense, and the money you put towards your premium could have been better used as holiday spending money.

But what if something did go wrong on your trip? What if you crashed your rental car, had all your luggage stolen, or experienced a medical emergency? Without travel insurance, those events could cost you thousands of dollars and even have life-changing financial consequences.

This is why travel insurance is such a wise investment. While it’s impossible to predict what the future holds, travel insurance gives you the peace of mind that comes with knowing you will be protected no matter what life throws at you. Start comparing policies today to make sure you’re covered for your next trip.

Compare policies to safeguard your next trip

Frequently asked questions

• Do you really need travel insurance?

  Yes, travel insurance can protect you from unpredictable and expensive events. It can cover medical emergencies, trip cancellations, baggage loss or theft, travel delays and more. Purchasing travel insurance early (ideally when you book) ensures unforeseen events before or during your trip are covered.

• What doesn't travel insurance cover?

  While exclusions can vary across insurers, standard events or conditions that won't be covered, include pre-existing medical conditions, travelling against government advice or reckless behaviour, like being under the influence of drugs or alcohol.

• Does travel insurance actually pay out?

  Yes, almost 90% of all travel insurance claims are paid out, giving travellers peace of mind that there's a good chance they will be compensated when they need it most.

• What is the most common travel insurance claim?

  According to Medibank, some of the most common travel insurance claims in 2023 were related to canceled flights, hospital and medical expenses, luggage and personal effects and delayed luggage allowance.

Written by

Jessica Prasida

Travel Insurance Expert

Jessica Prasida brings a decade of experience in the travel industry, including over four years as a travel agent and branch manager at STA Travel. She holds a Bachelor of Business and a Master of Marketing from the University of Technology, Sydney, as well as a Tier 1 General Insurance qualification that complies with ASIC guidelines. An avid traveller herself, Jessica combines her professional expertise with a passion for ensuring safe and enjoyable journeys for all travellers. Jessica was a Travel Insurance Publisher at Finder from 2019 to 2024. See full bio

Co-written by

Ceyda Erem

Senior writer

Ceyda Erem is Finder’s senior writer for insurance and has almost 10 years of experience writing about personal finance. Formerly a copywriter for several business and finance clients, Ceyda has written hundreds of articles, guides, blogs and more to ensure Australians stay in the loop about how to best manage their money. She has a Bachelor of Arts, Majoring in Writing from Macquarie University. See full bio

Ceyda's expertise

Ceyda has written 55 Finder guides across topics including:

• Insurance