The biggest travel insurance lessons for Australian travellers
Numerous headlines in 2015 told stories of Australians who had learned hard lessons about what travel insurance can provide cover for. A traveller could be hundreds or thousands of dollars out of pocket after a claim is denied because they didn’t adhere to the terms, conditions, exclusions and limits that apply to their policy.
“In the past year Fast Cover’s ten highest travel insurance claims have ranged from $20,000 to over $190,000.” said Mr Dean Van Es, the CEO of Fast Cover. “One traveller paid around $50 for a policy providing cover for a 16 day trip in Bali. It meant she saved over $23,000 in medical expenses when she tripped down a flight of stairs and broke her foot.”
Australians are expected to travel more and spend more on their travels in 2016. It is important to understand your travel insurance policy to avoid the surprise of realising you aren’t covered for the extra costs of an emergency. Here we summarise the five biggest lessons from 2015:
1. Get travel insurance early for cancellation cover
Ash clouds in Bali left thousands of Australians stuck on the island not just once this year, but twice. Flights were interrupted for weeks with people having to spend more than expected on extra nights of accommodation and food. Similarly on the 25th of April an earthquake in Nepal resulted in travellers being delayed and having their tours, accommodation and transport plans cancelled. These natural disasters became ‘known events’, with the disruptions they caused widely publicised.
As many travellers realised, travel insurers may not provide cover for a ‘known event’ where cancellations, delays and additional expenses are expected at the time a policy is purchased. If you don’t purchase travel insurance early, you run the risk of not having cover for an event that could interrupt your trip!
2. Know what medical conditions your insurer can cover
Numerous travellers make the mistake of assuming they are covered for any medical situation that may arise on their trip. Travel insurers will usually outline in their Product Disclosure Statement (PDS) what conditions they provide cover for, and what conditions they don’t. Pay close attention to any exclusions, especially relating to pre-existing medical conditions.
3. Pregnancy can be considered a pre-existing medical condition
Pregnancy is not always automatically covered in your travel insurance policy. As with pre-existing medical conditions, if a situation arises and you need to seek medical attention you may not be able to successfully claim for compensation if your insurer doesn’t provide cover for pregnancy.
4. Claims related to terrorism may be excluded
Terrorism has been in the forefront of many travellers minds in the past year. Many travel insurers don’t provide cover for cancellations and travel delays that result from an act of terrorism. This common exclusion came about after 9/11, when insurers recognised that the costs of claims related to terrorism could cause a significant increase in the price of insurance for all travellers. For the same reason acts of war and insurgency are often excluded as well.
The Australian Government does have means of compensating travellers affected by certain terrorist attacks. Prime Minister Malcolm Turnbull declared the November Paris attacks as a ‘terrorist act’, meaning those involved may be eligible for the Federal Government’s Australian Victim of Terrorism Overseas Payment scheme.
5. If luggage is unsupervised, it may not be covered
Every year Australians lose thousands of dollars’ worth of luggage and valuables overseas. Travel insurance can provide cover to reimburse you for the cost of lost or stolen luggage, but your claim is unlikely to be successful if your luggage was left unsupervised in a public place. That means if you leave your luggage out of your reach and/or sight on the beach or leave your bag in a taxi, your policy will likely not provide cover for your luggage.