Getting some peace of mind
Nothing ruins a holiday or business trip faster than lost luggage or an unexpected accident. Having travel insurance won't prevent things from going wrong, but it can make things much easier if you get into trouble.
1. What does travel insurance cover?
2. Choosing a travel insurance policy
3. Be honest with your insurer
4. Travel insurance exclusions
5. Making a travel insurance claim
What does travel insurance cover?
Travel insurance policies typically cover the following:
1. Medical expenses from personal injury or illness
2. Loss of goods
4. Disruptions to your travel plans (e.g. cancelled flights)
The most important aspect of travel insurance relates to the need for urgent medical treatment or if your flights get cancelled. These things can cost you megabucks if you're not covered.
Choosing a travel insurance policy
Travel insurance requires you to pay an upfront premium to cover you for a set period of time. You can also purchase travel insurance for the whole year if you travel a lot.
Some credit cards provide travel insurance under certain conditions.
On top of the premium, you may have to pay an excess when you make a claim. Make sure you know what the excess is before deciding which travel insurance provider to go with.
When choosing a travel insurance policy find out:
1. The cost of the premium and the excess
2. What is included and what is excluded
3. The dollar limits for claims on individual items and as a whole
4. What proof you need to make a claim
5. How to contact your insurer if you are overseas
6. What paperwork you need to take with you on your holiday
Some airlines let you choose travel insurance when you're buying tickets online. It may seem convenient, but make sure the cover is what you want. Shopping around for the best cover is always wise. And watch out for websites that automatically select travel insurance for you, especially if you're travelling domestically.
Be honest with your insurer
You must 'tell it like it is':
1. When you buy or renew a policy
2. If you make a claim
3. If your circumstances change
If you don't 'tell it like it is', you may not be covered when you make a claim. Be truthful about your travel plans and medical history when applying for travel insurance.
Travel insurance exclusions
Travel insurance usually does not cover:
1. Injury from extreme sports (e.g. bungee jumping)
2. Illness or injury from pre-existing medical conditions
3. Loss or injury from acts of terrorism, war and some natural disasters
4. Loss or theft if you left your luggage unattended, so ask your insurer what 'unattended' means for your policy
Some insurance policies exclude losses incurred due to the financial failure of an airline, hotel or other travel operator.
If you're about to travel overseas and want insurance, checking the exclusions that apply to your policy is worthwhile. You can read the product disclosure statement or simply ring and ask what's covered and what's excluded, especially if you're planning any unusual activities. If you're not happy with the answers, shop around.
Making a travel insurance claim
Making a claim on your travel insurance is much like any other insurance claim. For example, you may need a police report for a claim on a stolen camera.
It always pays to register your claim or at the very least inform your insurer that a claim is coming as soon as possible. Some insurers require you to inform them of any claims within 24 hours.
Case study: Sarah's dodgy knee
Sarah went skiing in New Zealand and decided to get travel insurance in case she got injured. Unfortunately she crashed into another skier and broke her leg!
But when her insurer discovered she'd had a knee reconstruction 2 years earlier, they denied her claim because she hadn't informed them of her pre-existing condition. Always tell your insurer the whole truth.