Why do I need travel insurance?

Travel insurance is a policy that can help cover you for unexpected events during your trip. Depending on your level of cover, travel insurance can include cover for medical expenses following unforeseen medical treatments, overseas medical emergency assistance, lost deposits and travel agent fees following trip cancellations, lost luggage, or cover for personal liability.

Travel insurance offers various levels of protection, from basic cover to more comprehensive policies that include cover for specific activities or destinations. Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to understand the inclusions and exclusions of your policy and see if your policy covers you and this trip.

While travel insurance is not legally required, it is highly recommended, especially for international travel. Travel insurance covers you for losses following natural disasters, pandemics, accidents, and can cover you for the theft of valuable items (like passports and credit cards), or flight cancellations that can happen anytime. Without insurance, you could face significant out-of-pocket costs.

Even for domestic trips, having travel insurance can be a smart choice. Though domestic travellers can access Australia’s public healthcare, events like lost baggage or trip cancellations can still incur unexpected costs. Travel insurance can provide even more value for those hiring a car at their chosen domestic location. Domestic travel insurance can cover any rental vehicle excess that you may be liable for if your hire car is damaged in a motor vehicle accident. Whether you travel internationally or locally, insurance provides peace of mind.

You can travel without insurance, but it comes with significant risks. While skipping travel insurance might save you some money upfront, it could result in steep costs if things go wrong. For instance, a medical emergency abroad could cost thousands of dollars or a missed flight connection due to bad weather could force you to pay for an expensive last-minute hotel. In the worst-case scenario, a lack of insurance could leave you stranded or severely out of pocket.

Even if you are a cautious traveller, unpredictable events like natural disasters and accidents are beyond your control. The Australian Government is limited in how and when it can help Australians overseas, and travel insurance mitigates these risks, providing you with more options and ensuring you aren’t left financially vulnerable in an emergency.

There are different types of insurance for different travellers. Depending on your financial situation and what you need, you could consider the following travel insurance options:

• Basic cover: This is the most affordable form of travel insurance and is ideal for budget-conscious travellers who want protection for a single trip. It typically covers medical bills, hospital expenses, accidents and medical evacuation and repatriation.
• Couples cover: This policy is designed for two people with the same itinerary travelling together. Despite the name, you don’t need to be a couple to purchase this insurance. It may be more cost-effective as it’s usually cheaper than purchasing two separate policies.
• Family cover: Family cover can cover you and your dependents under one policy. However, this type of policy can have higher limits due to the number of travellers.
• Groups cover: Insurance companies typically offer discounts for travelling groups of up to 25 people. This policy can be cheaper and more convenient for groups of people travelling together, like students or a tour group.
• Annual cover: Also known as a multi-trip policy, annual cover may offer better value for frequent travellers than single-trip policies and can cover unlimited trips within 12 months.

You may need to declare any health conditions or pre-existing medical conditions before purchasing a travel policy. You may also be able to purchase an extra cover if you plan to do adventurous activities or other activities that are not included in your cover. Always read the PDS and its fine print to understand what you are covered for as part of your standard cover.

The cover offered by travel insurance can vary depending on the policy, but most plans generally include cover for the following:

• Medical emergencies: This includes hospital visits, surgeries, and medical costs where medical care can be expensive without health insurance.
• Trip cancellations or delays: If your trip gets cancelled or delayed due to illness, weather or unforeseen events, insurance may reimburse you for non-refundable bookings.
• Lost or stolen luggage: Whether your luggage is lost by the airline or stolen during your trip, insurance could compensate you for the loss, ensuring you can replace essential items.
• Personal liability: Travel insurance can cover legal costs or compensation if you accidentally injure someone or damage property during your trip.
• Adventure activities: If you plan to participate in high-risk activities such as scuba diving or bungee jumping, some insurance policies may cover accidents during these adventures.
• Rental car hire excess: Travel insurance may cover your rental vehicle excess if your hire car is damaged in an accident.

All travellers should ensure that the policy from their chosen insurance provider provides all the cover they need. The cover automatically included by the various insurance providers differs. With some providers, you may need to add additional cover to match your trip.

The main difference between domestic and international travel insurance lies in the scope of cover and the nature of the risks involved.

• Medical cover: Domestic travel insurance will not cover any medical expenses. Most Australians will be covered by the Medicare system and/or their private health insurance for any medical-related expenses incurred while travelling in Australia. However, medical insurance is essential for international travel as the cost of healthcare will vary drastically from country to country.
• Scope of cover: International travel insurance tends to be more comprehensive as it covers a broader range of risks. It can protect against medical emergencies, travel delays and, in some cases, emergency dental expenses. On the other hand, domestic insurance is limited to trip cancellations, lost luggage, or minor accidents.
• Price: Domestic travel insurance is typically more affordable than international insurance since the risks and potential claim costs are lower. International insurance tends to be more expensive as it normally includes cover for expensive medical costs and repatriation.
• Additional requirements: Some international destinations may require you to have insurance as part of their entry requirements, particularly in countries where healthcare for tourists is costly.

The best time to purchase travel insurance is immediately after booking your trip. The best time to purchase travel insurance is immediately after booking your trip. By purchasing your travel insurance as soon as you pay a deposit or make a booking, policies that include cancellation cover could cover you for lost deposits or any cancellation fees if you need to cancel or delay your trip due to unforeseen circumstances that are covered by your chosen policy.

By securing travel insurance early, you can enjoy peace of mind knowing you might be protected against unforeseen events which force you to delay or cancel your trip. The earlier you purchase travel insurance, the more protection you have to make an insurance claim due to an unexpected event.