Australia: Holiday & Travel Insurance

Overview

Holiday and travel insurance is recommended for all who don’t wish to risk having their holiday or travel ruined by financial problems or to arrive home broke. As you know, anything can and often does go wrong with a holiday, sometimes before you even get on the plane (particularly if you don’t have insurance). Travel insurance is available from many sources, including airlines, banks, insurance brokers, motoring organisations, tour operators and travel agents.

Level Of Cover

Before taking out travel insurance, carefully consider the level of cover required and compare policies. Most policies include cover for accidents (including evacuation home if necessary), delayed or lost baggage, departure delay at both the start and end of a holiday (a common occurrence), loss of deposit or holiday cancellation, legal expenses, medical expenses (up to $4 million), missed flight, money (e.g. $500 to $1,000), personal effects (e.g. $3,000), personal liability ($2 million or $4 million), and a tour operator going bust. You should also insure against missing your flight after an accident or transport breakdown, as almost half of travel insurance claims are for cancellation (you should also be covered for transport delays at the end of your holiday, e.g. the flight home). With some policies, the amount you can claim for belongings may be limited to around $400 per item, which is insufficient to cover your Rolex watch or Leica camera. Some home contents policies include cover for belongings worldwide. Your insurance company won’t pay out if you’re negligent, e.g. you leave your camera in a taxi or on a beach.

Medical Expenses

Medical expenses are an important aspect of travel insurance and you shouldn’t rely on reciprocal health agreements, cover provided by charge and credit card companies, house contents policies, or private medical insurance, none of which usually provide the necessary cover. The minimum medical insurance recommended by experts is $500,000 for Europe and $2 million for North America and the rest of the world. Personal liability should be at least $2 million for Europe and $4 million for the rest of the world. Many travel and holiday insurance policies don’t provide the level of cover that most people need. Always check any exclusion clauses in contracts by obtaining a copy of the full policy document, as all relevant information won’t be contained in insurance leaflets.

Exclusions

Health or accident insurance included in travel insurance policies usually contains exclusions, e.g. dangerous sports such as crocodile wrestling, hang-gliding, kangaroo boxing, mountaineering, scuba-diving, skiing, white-water rafting, and even riding a motorbike in some countries. Check the small print and find out exactly what terms such as ‘hazardous pursuits’ include or exclude. Skiing and other winter sports should be specifically covered and listed in a travel insurance policy. Special winter sports policies are available, which are usually more expensive than normal holiday insurance.

Cost

The cost of travel insurance varies considerably according to your destination. Many companies have different rates for different areas, e.g. Australia, Europe, North America and worldwide (excluding North America). Premiums for travel within Australia are around $28 to $40 per person for two weeks, European destinations are usually from $145 for two weeks, and North America (where medical treatment costs an arm and a leg) and a few other destinations cost from $200 for three weeks. The cheapest policies offer reduced cover, but may not be adequate for most people. Premiums may be higher for those aged over 65 or 70. Generally, the longer the period covered, the cheaper the daily cost, although the maximum period may be limited, e.g. six months. With some policies an excess (e.g. $50) must be paid for each claim.

Annual Policies

For people who travel overseas frequently, whether for business or pleasure, an annual travel policy is often an excellent idea, costing around $225 to $350 per year for worldwide cover for an unlimited number of trips. However, always carefully check exactly what is included and read the small print (some insist that travel is by air). Most annual policies don’t cover you for travel within Australia and there’s a limit on the length of a trip, e.g. one to three months. Some companies offer ‘tailor-made’ insurance for independent travellers (e.g. backpackers) for any period from a few days to a year.

Claims

Although travel insurance companies quickly and gladly take your money, they aren’t so keen to pay claims, and you may need to persevere before they pay up. Fraudulent claims against travel insurance are common, so unless you can produce evidence to support your claim, insurers may think that you’re trying to cheat them. Always be persistent and make a claim irrespective of any small print, as this may be unreasonable and therefore invalid in law. Insurance companies usually require you to report any loss (or any incident for which you intend to make a claim) to the local police within 24 hours and to obtain a report. Failure to do this usually means that a claim won’t be considered.

Flight insurance and comprehensive travel insurance are available from insurance desks at most airports, including in-transit baggage, personal accident, travel accident and worldwide medical expenses. When you pay for your travel costs with some credit cards, your family (possibly including children under the age of 25) are provided with free travel accident insurance up to a specified amount, e.g. $300,000. Don’t rely on this insurance, as it usually covers only death and serious injury.

© Survival Books Limited 2006

“Buying a Home in Australia & New Zealand” 1st Edition, Graeme Chesters.
Reproduced with the permission of Survival Books Limited.

Further information on this topic can be found in “Buying a Home in Australia & New Zealand” 1st edition, by Graeme Chesters.

For extensive information about buying a property in Australia & New Zealand, you can purchase this book at www.survivalbooks.net