Don't get caught out thinking you're covered when you're not. A guide to common travel insurance exclusions
There is an old saying: “If you can’t afford travel insurance, you can’t afford to travel.”
While this saying does hold true in many cases, sometimes even if you can afford travel insurance and remember to buy cover, that policy is not worth the paper it’s printed on.
Why? Because you’ve intentionally or unintentionally breached a term or condition and have rendered your policy redundant.
Unfortunately, this is an all-too-common occurrence, which is why it’s important you read the product disclosure document (PDS) before buying a travel insurance policy. But the PDS can be confusing, with unfamiliar jargon and missing information. That's why we’ve created this guide to common travel insurance conditions and exclusions, along with useful tips for avoiding hidden travel fees.
What isn’t covered by travel insurance?
There isn’t a quick and simple answer to this, as there are many conditions and exclusions you need to know about.
- Airline lost your bags? They’re not covered.
- Had a drink and fell down some stairs? You’re not covered.
- Left your luggage unattended? It’s not covered.
The question is not always so black and white. Say you have to cancel your trip due to the death of a relative. Not only will you have to prove that they were an immediate relative, you’ll also need to provide your insurer with a death certificate. If that wasn’t already hard enough, there are also conditions (generally not laid out in the PDS) about whether or not the death was due to a pre-existing condition and also the age of the deceased.
Let’s get into specifics:
You’re not covered. That is to say, you’re not covered if you’ve drunk too much. But how much is too much? Unlike drink driving where there is a set limit, insurers have discretion when it comes to assessing your claim to determine whether or not alcohol consumption directly contributed to your claim.
Existing medical conditions
Getting travel insurance for an existing medical condition can be an uphill battle. There are pre-existing conditions that many insurers cover automatically. These conditions are generally non-life-threatening and include:
- Bell’s Palsy
- Carpal Tunnel Syndrome
- Coeliac Disease
- Congenital Blindness
- Congenital Deafness
- Diabetes Mellitus (Type I and II)
- Dry Eye Syndrome
- Folate Deficiency
- Gastric Reflux
- Graves’ Disease
- Hiatus Hernia
- High Cholesterol
- High Blood Lipids
- Impaired Glucose Tolerance
- Insulin Resistance
- Iron Deficiency Anaemia
- Macular Degeneration
- Meniere’s Disease
- Pernicious Anaemia
- Plantar Fasciitis
- Raynaud’s Disease
- Sleep Apnoea
- Solar Keratosis
- Trigeminal Neuralgia
- Trigger Finger
- Vitamin B12 Deficiency
If you’re receiving treatment, have received treatment in the last 12 months or are taking medication for the condition, getting cover becomes much harder. You’ll struggle to find cover for mental health disorders, if you’re travelling overseas for treatment (sometimes referred to as medical tourism), or if you’re recovering from cancer.
Motorcycle and scooter use
Getting around on two wheels may be a time-honoured mode of transport for tourists in many countries, but did you know that you need to hold a valid licence either in the country you plan on riding in or back at home here in Australia? All policies also have a limit on the size of the engine the bike or scooter can have (generally not more than 125cc) and require that you were obeying the road rules (i.e. wearing a helmet).
Extreme sports and activities
Feel like running with the bulls? If so, you’re doing so at your own peril as insurers will not cover your medical bills should your rump be introduced to the pointy end of a steer (read: getting your arse gored by a bull’s horn). Other activities you won’t get cover for include BASE jumping, free climbing and hunting.
While most travel insurance policies come with luggage protection, there are caveats that you need to be aware of. he biggest is that if you’re luggage is lost by your airline it’s up to them (not the insurer) to compensate you. You’re also not covered if you leave your luggage unattended and it’s stolen, which can include if you’ve left your bag unsecured in a hostel room.
Terrorism is on the minds of many travellers when they head overseas. Whether or not you’ll have a claim honoured that is the result of a terrorist act will depend on your insurer. Many insurers will cover you for medical claims, while some will cover evacuation and less still will cover loss of income or cancellation as a result of terrorist actions. Similarly, you won’t have cover if you’ve travelled to a country against a governmental warning or advisory.
What are you covered for?
It’s not all bad news. While the list above does highlight some of the shortfalls and loopholes of travel insurance, travelling without cover is asking for trouble.Travel insurance can cover you for:
- Overseas medical expenses. Provides you with cover should you require emergency overseas medical assistance including doctors fees, surgical costs and medical evacuations.
- Cancellation. If, due to situations beyond your control, you are unable to make prepaid accommodation and travel arrangements, your travel insurance will cover you for the losses you incur.
- Delayed luggage. If your luggage is delayed, your travel insurance will provide you with funds to allow you to purchase essential items.
- Loss of income. If you suffer an injury and are unable to return to work, your travel insurance may provide a weekly payment to replace your lost income.
For a full list of what to look for in a policy check out, What does travel insurance cover?
Travel insurance tips
When comparing travel insurance you should:
- Make sure the policy provides cover for activities you plan on participating in, e.g. skydiving, riding a motorcycle
- Check whether the policy provides a high enough level of cover for the items you’re taking on holiday, e.g. laptops, tablets, mobile phones, jewellery
- Check whether or not you can get a variable or zero dollar excess
- Compare the availability and location of emergency assistance providers
- Check the sub-limits that apply to the cover options
Buying the policy
- Read the PDS to make sure you understand what is covered before buying the policy
- List any and all expensive items
- List all pre-existing conditions
- Buy the policy as early as possible
- Report the incident at your earliest convenience,
- Be honest about your losses
- Provide your insurer with all the information they require, e.g. receipts, photos of items, doctor’s certificates, etc.
Hidden fees and savings tips
- Don’t get travel insurance through your airline or travel agent. Want to pay more than you have to for travel insurance? Airlines and travel agents generally offer, for convenience,an option for their customers buy travel insurance. But you’ll pay for this convenience as travel insurance sourced this way can costing upwards of 50% more than going direct to the insurer.
- Watch out for global roaming costs. If you’re taking your phone with you on your next holiday, make sure you’re aware of any global roaming charges. One way to avoid these charges is to buy a global SIM prior to travel or to look for a travel insurer that provides one free with their travel policy.
- Beware of international money charges. Get your cash early and at the best rate, and don’t wait until you’re at the airport to change your AUD to whichever foreign currency you need. Look at getting a travel money card to save you from getting hit with foreign transaction fees.
- Get an annual policy. If you travel a lot for work or pleasure your may be able to save yourself some money on travel insurance by taking out an annual policy. If you take more than three trips a year, you may be able to save yourself some cash.
- Skip the taxi. Planning to get a taxi? Why not take advantage of the ride sharing service Uber? Do the research prior to travel and you can end up saving a large percentage of your travel costs.
- Entry and departure taxes. Check if there is an entry or departure tax prior to your arrival at the airport and try to have that amount ready in cash just in case you’re travelling somewhere that doesn’t accept EFTPOS.
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