Travel insurance is an essential part of planning any holiday or business trip, yet it’s often left at the bottom of the to-do list for most travellers.
When it comes to travel insurance, comparing apples with apples can be a challenge when you consider the many different varying levels of coverage and exclusions offered by travel insurers, which is why it can be useful to ask a travel expert for help when planning your trip.
To help you, we’ve put together this article answering some of the most common questions about travel insurance that we hear from our clients.
What does travel insurance cover?
Travel insurance is designed to give you financial protection and peace of mind in case something goes wrong before or during your travel.
Most travel insurance policies cover the following key areas:
Medical emergencies: This includes medical and dental expenses, hospital stays and emergency medical evacuation, which can be costly without insurance, especially in places like the US, Singapore and Japan which are known for their staggering hospital bills. This can also include the cost of flying family members to be with you to help with your care, or returning home earlier than you’d planned to seek medical care in Australia. While Australia has reciprocal healthcare arrangements with 11 counties, like the UK, Italy and New Zealand, this only covers the cost of immediate and medically necessary care.
Trip cancellations or interruptions: Coverage if you need to cancel or cut short your trip due to unforeseen circumstances, such as illness or family emergencies.
Lost, stolen, or damaged luggage: If your baggage or personal belongings are lost or damaged in transit, your insurer will reimburse you for the value of those items. You can choose to pay extra for especially valuable items, like professional cameras or specialist equipment like golf clubs. It’s important to check whether your policy covers instances where you simply lose or forget to take your items with you, like leaving your laptop on the plane or the backseat of a taxi.
Delays: Compensation for delays caused by issues such as inclement weather, mechanical breakdowns, or missed connections.
COVID-19: Since the COVID-19 pandemic, most insurers now cover medical expenses, cancellations, delays and quarantine expenses associated with contracting COVID-19 when travelling overseas.
The above is a general benchmark for what you should look for with a travel insurer. It’s important that you read and understand the Product Disclosure Statement (PDS) provided by your insurer.
What doesn’t travel insurance cover?
This also varies from insurer to insurer, but typically your cover won’t include coverage for the following key areas, either at all or without paying an additional premium:
Specialist equipment: Equipment that costs more than the standard items covered as part of your lost, stolen or damaged luggage. This can include professional-grade camera equipment and sports gear (items like snowboards and bikes).
High-risk and specialist activities: Activities like skiing, scuba diving, or bungee jumping are often excluded due to the higher risk of injury. Even more relaxing activities, such as cruising, might need specialist cover.
Travel to countries with travel warnings: If you visit a destination that Smart Traveller has issued a travel warning for, you won’t be covered if you need to make a claim.
These are just some of the many things that could be excluded from your travel insurance, so make sure to check your insurer’s PDS carefully before you buy insurance.
Do I need travel insurance for domestic trips in Australia?
Because Medicare covers most medical expenses in Australia, many travellers assume they don’t need domestic travel insurance but they’re forgetting insurance covers more than just medical expenses.
Domestic travel insurance can still protect you in several ways:
Car insurance: If you’re planning on hiring a car as part of your trip, it’s worth taking out a domestic travel insurance policy. Not only will it include all the items below, but it will typically include cover for hire cars too – meaning you won’t need to pay the car hire company’s excess if you end up in a bingle.
Trip cancellations: If you need to cancel a flight, hotel booking, or tour due to a medical emergency or other covered event, travel insurance can help you recover non-refundable costs.
Lost or stolen luggage: If your baggage is lost or damaged during a domestic flight, travel insurance can compensate you for the value of your belongings.
Travel delays: If your trip is delayed due to unforeseen events, such as bad weather or a mechanical breakdown, your insurance can help cover costs like accommodation and meals.
Cruising in Australian waters: Even if your cruise isn't leaving Australian waters, you may still need travel insurance for medical reasons. You may be unable to claim Medicare or private health insurance on the ship. Before you travel, check with your travel advisor if your ship has a Medicare-accessible doctor on board.
This protection against cancellations and lost items means buying insurance for your domestic holiday is still a worthwhile investment.
What is the difference between general travel insurance and corporate travel insurance?
The travel insurance you buy to cover your personal holiday will cover that single trip, unless you buy an Annual Multi-Trip policy. The premium is also calculated with certain assumptions about how you travel, with extra add-ons available to tailor the cover to suit your holiday (such as cruising). Multi-Trip policies are ideal for frequent travellers, so let your travel agent know if you’re planning on travelling more than once in the next 12 months.
On the other hand, corporate travel insurance boils down to two options:
1. You can take out single or multi-trip policies for your staff; or
2. Request a quote that will cover your whole organisation. This option can sometimes work out cheaper than paying for an individual policy every time an employee travels.
Corporate travel insurance typically tends to cover a 12-month period. Domestic travel is generally already included with corporate travel insurance, and spouses and children can be added to these policies in case staff would like to combine business with leisure travel.
Employers have an ongoing duty of care to their staff, even when they are travelling. Corporate travel insurance is designed to give management peace of mind by covering more corporate-leaning risks, such as protecting the business and the employee from certain liabilities when travelling as well as coverage for accidents and injuries.
While many companies may already pay for business insurance, it’s important to check your cover closely as it may not specifically cover staff travel or may not provide as comprehensive cover as a dedicated travel insurance policy.
When you book corporate travel insurance, you’ll be asked to estimate how many days of travel will need to be covered and in what destinations. Our team can guide you through this and, when it comes to renew your policy, track your company’s travel to provide you with an accurate report of how many travel days your staff used so that you don’t pay more than you need to.
Because every business is different, it’s important to talk to a qualified corporate travel expert like FBI Travel to ensure your policy best suits the business’ needs.
The credit card I used to pay for my trip includes free travel insurance. Do I still need to buy a separate insurance policy?
Banks and credit providers like American Express are increasingly including free travel insurance with their reward credit cards. However, relying solely on travel insurance provided by your credit card provider comes with risks.
The included coverage could be one-size-fits-all and might not be as comprehensive or provide the right level of cover for you or your itinerary compared to insurance you buy directly from insurers.
You may also be required to spend a certain amount of money on flights and accommodation related to your trip before the insurance is “activated”.
Some good questions to ask or things to check are:
What is the activation requirement? Does all or part of your trip need to be paid for on the card to activate coverage?
How often are you entitled to use the free policy?
Is coverage tied to the level of your credit card?
Do you need to pay upfront for any claims and wait for reimbursement?
What is your policy number? Do you know where/how to locate your policy documentation?
What is the process for making a claim?
Who is covered under the policy? Is it just the primary cardholder or are travel companions or family members also covered?
Is there an age limit on coverage for yourself or non-travelling relatives?
Does the policy cover pre-existing medical conditions? If not, is there an option to apply for additional coverage?
While it’s tempting to think credit card rewards mean you can save on paying for travel insurance, any savings can quickly evaporate if you’re suddenly left out of pocket for losses not covered by your credit card’s insurance policy.
What is the process for making a claim?
Making a claim on your travel insurance is a straightforward process, but you can help speed things along by:
Documenting everything: Keep records of your expenses, including medical bills, receipts for lost or damaged items, and proof of trip cancellation (for example, a medical certificate if you need to cancel your trip due to sickness). If something is stolen, you may also need to file a police report with the local authorities and share a copy with your insurer.
Submit your claim promptly: Most insurers require claims to be submitted within a certain time frame, typically 30 days.
After you lodge your claim, processing times vary between insurers. Set a reminder to check in with your insurer every couple weeks to track your claim’s progress.
The speed with which your insurer processes a claim can vary, but dedicated travel insurance providers may pay out claims faster than your general business insurer because this is their area of expertise.
Can I buy travel insurance after I’ve left Australia?
Ideally, you should purchase travel insurance as soon as you’ve booked your flights and accommodation, in case you need to delay or cancel your trip before departing. At the latest, you should buy it before you leave Australia.
Some insurers do allow travellers to buy travel insurance, known as post-departure insurance, after they’ve already left Australia. These policies tend to have stricter terms, may not cover pre-existing conditions and may have a minimum waiting period where you cannot claim.
It’s always best to buy travel insurance well in advance of your trip to avoid potential complications.
Can I extend my travel insurance after I’ve left Australia?
In most cases, you can extend your travel insurance if you’d like to continue travelling abroad. This depends on which insurer you purchase your cover from, and we recommend contacting your Professional Travel Advisor for advice.
Travelling soon? Click here to contact our team and find a travel insurance policy for you.
Note: The advice above is general and may not apply to your specific circumstances.. Please discuss your travel insurance needs with your Professional Travel Advisor. Consider whether the advice given is suitable for you and your circumstances and before making any decision to purchase travel insurance, please read the travel insurer’s Product Disclosure Statement which will be provided to you by your FBI Travel Professional Travel Advisor..