How travel insurance covers personal liability

The personal liability benefits of your international travel insurance can provide cover for you and anyone listed on your policy if:

• You injure another person (they may be referred to as a ‘third party’ on your policy)
• You cause the death of another person
• You cause damage to another person’s property through an accident on your trip.

It can also help you pay your legal expenses if you need to defend yourself against a personal liability claim. However, keep in mind there’s usually a limit on your policy, which your insurer will outline in your PDS.

For example, Helen and Ben are staying in a hostel while on holiday in Europe. One night, Ben decides to use the communal barbecue, but he isn’t sure how to get the gas working and accidentally causes a fire, which damages the hostel’s communal area.

The damage costs more than the bond he and Helen put down when they initially checked in, and the hostel demands the pair pay for the damage they caused. In this case, the personal liability cover in their travel insurance policy could help Ben and Helen cover these costs.

While it’s important to know what your travel insurance covers, keep in mind there are several scenarios where your insurer won’t pay for legal liability. These exclusions include:

• Damage, bodily injury or death caused by illegal actions
• Acts where you deliberately cause damage, harm or death to another person or their property
• If you transmit a disease to another person
• Accidents that occur if you’re working overseas
• Destinations where the Australian Government has listed a ‘Do not travel’ warning.

For example, George is on a pub crawl in Queenstown, New Zealand. A fight breaks out at a bar, and George hits another man, who ends up in hospital and requires surgery.

Because George deliberately inflicted harm on another person, which is illegal, this is an example where an insurer wouldn’t pay for George’s personal liability insurance claim.

Travel insurance is always worth it because you just never know what will happen on holiday. While it’s essential to cover yourself for accidents, illness and loss, it’s also important to have adequate cover in case you’re legally liable to pay compensation to someone else.

Think of it this way: If a legal claim was made against you because you injured someone or damaged their property, would you be able to pay for your legal expenses yourself? Keep in mind that these costs can sometimes set you back hundreds of thousands of dollars, depending on the seriousness of the incident. Travel insurance with personal liability cover can help cover some of these costs.

In addition, most policies that include personal liability insurance for international travel will generally also include cover for other unexpected events during your trip, such as:

• Overseas medical cover, for if you become injured and require medical treatment, emergency evacuation or repatriation back to Australia. This cover is particularly helpful in countries with high medical expenses, such as the USA
• Trip cancellation cover, in case of missed flights or pre-booked activities
• Luggage cover, for theft or loss of your personal belongings including valuables, cash and credit cards.

Travel insurance with personal liability cover is available both as a single trip policy, or if you’re a frequent traveller, as an annual multi-trip policy.

No, personal liability cover isn’t compulsory when you go on holiday. However, keep in mind that if you do cause property damage or bodily injury to another person while overseas and aren’t insured, you’ll be required to pay for any legal fees or damages out of your own pocket (which can easily reach into the thousands of dollars).

However, some countries such as Cuba, the United Arab Emirates and Turkey (Türkiye), will require citizens from Australia to have travel insurance to enter, and it may also be a requirement for some visas, such as working holiday visas. It may also be required for activities such as cruising. Always check the requirements before your holiday.

While many travel insurance policies do include some cover for public liability claims, it’s important to remember that they might only provide cover up to a certain limit.

For example, you may take out a basic policy offering a small amount of coverage for personal liability claims. If you caused damage or harm that exceeded the benefit limit, you would need to cover the rest of the cost out of your own pocket.

As a general rule, higher levels of cover come with greater amounts of personal liability coverage. Always read the PDS or ask your insurer about the extent of your coverage so that you can travel with peace of mind.

Most travel insurance policies that cover claims for personal liability overseas don’t cover car accidents. However, you can still get protection overseas if you’re involved in an accident.

In most countries, when you hire a vehicle, the hire car company is responsible for the vehicle insurance. However, most hire car agreements will require you to pay a car hire excess if the vehicle is damaged.

Car hire excess is an amount a hire car company charges you if your rental car is stolen, damaged or involved in an accident. Luckily, this excess can be covered by comprehensive travel insurance policies.

However, if you injure another person or damage their property while driving a rental car, travel insurance won’t be able to provide any cover. You may, however, have liability cover if you signed a Collision Damage Waiver (CDW) with your rental company, but in places like the U.S. you may have to purchase it separately.

If you find yourself in a tricky situation overseas and need to make a claim, there are several steps you need to follow. It’s important that you don’t admit fault or promise to make payment without talking to your insurer first, as this could impact your claim.

1. Contact your travel insurance provider. It’s best to contact your travel insurer as soon as possible to explain the situation.
2. Contact the Australian Consulate. If you need emergency assistance or support, the Australian Consulate may be able to provide assistance and information.
3. Provide evidence and other documents. To process your claim, your insurer will ask you to provide evidence of your claim and supporting documents. These can vary between insurers, but they will let you know exactly what you need when you contact them.
4. Obtain approval for any legal fees. If you’ve caused damage or harm to someone overseas, your first thought might be to get a lawyer or seek legal advice. You must contact your insurer first and have them approve your legal costs. Otherwise, you could be left out of pocket for your costs.