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When to buy travel insurance

Don't leave travel insurance until the last minute – Make sure you're protected

When should you buy travel insurance? The sooner, the better.

The old saying “the early bird catches the worm” has never been truer than when purchasing travel insurance. Buying your cover early can potentially save you thousands of dollars.

When is the best* time to take out travel insurance?

Many people leave getting travel insurance until the last minute, but this can have dire consequences if the unexpected happens. Over 30% of finder.com.au users are leaving getting travel insurance until too late, waiting until two weeks prior to their departure before looking for cover.

When is the best* time to take out travel insurance? When you book your holiday. If your travel insurance includes cancellation cover, you are protected if you are forced to cancel your holiday prior to departure.

A lot can go wrong in the days and weeks between booking and leaving on your holiday. Any of the following unexpected events could occur:

  • Injury, illness or death of you, a travelling companion or a relative
  • A disaster at home such as a flood, fire or burglary
  • Becoming pregnant and being unfit to travel due to complications
  • As a member of the armed forces, being suddenly posted elsewhere in Australia or overseas
  • Being made redundant from your job
  • Being called on to appear in court or serve as a juror
  • Flight delays or cancellations
  • Sudden political unrest, making your destination unsafe
  • Extreme weather events or a natural disaster in your destination country

The good news is that if you purchased travel insurance with cancellation cover prior to any of these unexpected events, you will be able to claim for all prepaid and non-refundable travel expenses up to the benefit limit of your policy.

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When can you claim for cancellation cover?

Cancellation cover is a basic component of any good travel insurance policy. It covers lost deposits and cancellation fees for prepaid travel arrangements incurred due to unforeseen circumstances. Most cancellation policies will cover costs associated with the cancellation of:

  • Pre-booked flights. The price of the ticket minus any refund supplied by the airline.
  • Accommodation. Prepaid accommodation or cancellation charges.
  • Hire equipment. Prebooked hire equipment such as ski gear or a rental vehicle.
  • Holiday activities. Prebooked activities such as bungee jumping or a fishing trip.

The thing to remember with cancellation cover is that it doesn’t cover every eventuality (i.e. cancellations resulting from your own negligence) and it only covers you up to the benefit limit of the policy, which is why it’s important to always read the Product Disclosure Statement carefully when purchasing your travel insurance.

When are users taking out cover?

We analysed when our users were looking for cover and found that while the majority of people were doing the right thing, many are still leaving getting cover far too late.

When are people taking out cover?Percentage
On the day of travel or already overseas2.18%
One week before departure18.97%
Two weeks before departure11.20%
# of months prior to travelling
On the day of travel or already overseas2.18%
1 month46.89%
2 months19.43%
3 months9.58%
4 months5.89%
5 months4.66%
6 months2.73%
7 months1.66%
8 months1.91%
9 months1.63%
10 months1.61%
11 months0.95%
1 year0.82%
More than a year0.06%

What does travel insurance cover?

As well as cancellations, travel insurance can protect you in a number of other important ways. A comprehensive travel insurance policy will normally cover:

  • Overseas medical and dental. Hospital, medical, surgical, nursing, ambulance and emergency dental expenses.
  • Luggage and travel documents. Loss, theft or damage of luggage and replacement of travel documents.
  • Delayed luggage allowance. Cost of essential emergency purchases if your luggage is delayed by a carrier.
  • Stolen cash. Replacement of cash lost or stolen from your person.
  • Rental car excess. Covers the excess you would have to pay if your rental car is stolen or damaged.
  • Travel delays. Additional accommodation expenses if your scheduled transport is delayed.
  • Resumption of journey. Cost of returning overseas if you are forced to return home due to the illness of a relative or travel companion.
  • Special events cover. Additional costs in getting to a special event that you would otherwise miss.
  • Hijacking. A daily benefit if you are forcibly detained on a hijacked public transport vehicle.
  • Loss of income. A benefit payable for an injury sustained while overseas which prevents you from working at home.
  • Disability. A benefit payable if you lose sight in one or both eyes or the use of a limb due to an injury sustained on your trip.
  • Accidental death. A benefit payable if you die from an injury sustained on your trip.
  • Personal liability. Cover for legal liability if you cause injury or property damage to others during your trip.

How to save on travel insurance

As with any insurance, there are ways to save on your travel insurance premiums, without compromising the level of cover you need.

  • Buy early. Getting your travel insurance early means you get more insurance for your money, including immediate cover for cancellations prior to departure.
  • Buy online. Many online insurers offer discounts due to their lower overheads and a highly competitive marketplace.
  • Shop around. Compare lots of policies to find the one that offers the cover you need for less.
  • Get a member’s discount. Check if your super fund, health fund or other organisation offers discounted travel insurance to members.
  • Use your credit card. Most credit card providers offer free travel insurance, but make sure it meets your requirements, as cover can be more limited.

The importance of cancellation cover

Andrew and Sue were off on the trip of a lifetime. They planned to holiday in China and Japan before heading for Europe and the UK to visit Sue’s relatives in Scotland. They managed to get a great deal on flights and accommodation, but thought the travel insurance the travel agent was selling was a bit overpriced. The figured that they would assess their options and get cover later.

But they didn’t.

Three days before their departure date, Andrew’s mother was hospitalised with a serious illness, meaning they had to cancel their trip. When they approached the travel agent, he informed them that their pre-booked airfares and accommodation were non-refundable (the reason the package was so cheap).

Because they hadn’t taken out travel insurance, Andrew and Sue found themselves with no holiday and out of pocket to the tune of $11,500.

Get cover now

Cancellations make up a large proportion of the claims processed by travel insurers and thinking that it won’t happen to you could turn out to be a very costly mistake. Make sure you take out travel insurance as soon as possible.

Apply for cover now

Picture: Steven Conry, licensed under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (image cropped)

*The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your own personal financial circumstances when comparing travel insurance policies.
Picture: Shutterstock

Richard Laycock

Richard is the senior insurance writer at finder.com.au and is on a mission to make insurance easier to understand.

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