Travel Insurance

Do You Need Travel Insurance? What Do I Need to Know?


There's nothing like fine print and legal language to put a dampener on a great adventure, but many argue that if you can't afford travel insurance, you can't afford to travel. They have a point, even though finding the best policy isn't always easy. Travel insurance exists to protect a traveler's investment in their journey and ensure they don't lose out, and get medical help, if things go wrong.

Whether it's your trip, your possessions, your luggage, or your health, travel insurance — and most important, the right kind of travel insurance — has become an essential item to pack for smart travelers. And if you don't buy travel insurance — or the right kind — more than your trip could be ruined.

Choosing a suitable policy will give you peace of mind. At best, it could save your life. So when considering which policy is right for you, it pays to look at the details. (Note: Many credit card companies offer travel insurance in conjunction with trip purchase. Contact your credit card company for more information.)

High prices don't always mean the best coverage. List what aspects of a policy are important to you. It's pointless paying a premium to reduce car rental excess if you won't be driving, or covering your luggage when all you have is a backpack. Removing options or lessening limits often reduces the premium you pay.

There are hundreds of circumstances that could cause you to cancel your trip, return home early or force you to seek emergency medical treatment while traveling.

What needs to be covered by travel insurance?

Emergency medical coverage is most important. Insurance policies vary, so read the fine print carefully to see exactly what is covered. Certain pre-existing medical conditions that increase the likelihood of a claim may be excluded. If you have a heart condition or terminal illness, you may need to provide additional information before you can be offered a policy.

Insurance premiums are calculated based on your origin, age, destination and duration of travel, with the world divided into different zones. When traveling to countries like the USA, where health insurance is a multi-billion dollar industry, or to less developed countries with a lower standard of healthcare to which you're accustomed, look for a policy with a high level of cover. Some providers will offer ‘unlimited' medical coverage for a higher premium, while a cheaper policy might cover up to US$10 million.

Other things to consider

Will a provider airlift you home? Do they have doctors on the staff of their emergency hotline? Will they pay to fly your family to you if you're unable to be moved? Read the fine print and choose what suits your needs.

Reciprocal healthcare agreements

Some countries have reciprocal healthcare agreements with others, meaning that if you're from a participating country and traveling in another, you'll be entitled to free or subsidized public healthcare to the same standard enjoyed by residents. Participating countries include (but are not limited to) Australia, New Zealand, the UK and Ireland; Sweden, Norway and Finland; Italy and The Netherlands. Refer to your government's traveler information homepage for details, noting that any reciprocal coverage will not be at the same level as facilitated by travel insurance. And if you're an EU citizen, don't forget to carry a European Health Insurance Card to entitle you to cut-price or free state-provided healthcare in EEA countries and Switzerland.

Are your belongings covered?

Next, confirm how your luggage is covered, particularly for theft or damage. Are there individual item limits? What are they? Are electronics included? If anything is unclear, phone your provider – insurers are legally obliged to unravel the fine print in simple terms.

Important inclusions for your policy

The other essential heavyweight inclusions to investigate are:

  • Cancellation. You can often nominate the amount of coverage in the event that something prevents you from traveling - this should equal the full cost of your trip and any extras, but the higher the amount, the more expensive the policy becomes.

  • Travel delay. Count on at least US$250 per day, and look for exclusions relating to strikes, natural disasters, war and terrorism. Please note that you are unlikely to be covered for delays less than 24 hours if it's the airline's fault.

  • Airline and end supplier insolvency. This is a relatively new addition to some policies, so you might have to shop around for this one.

  • Personal liability. In case someone trips on your luggage, injures themselves and sues you for damages, you'll need to be covered.