The questions you need to ask before buying travel insurance

Sixteen per cent of Aussies say they have travelled overseas in the past two years without purchasing travel insurance, according to new research, and the cost of living crisis isn't entirely to blame.

The cost of insurance was the second most common reason people named for not taking out travel cover.

The main reason? Confidence that nothing unexpected would happen.

What sort of travel insurance do you want?

Travelling without suitable travel insurance can be a big financial risk. Even the best-laid plans can go awry.

From lost luggage, cancelled flights to emergency medical treatment, travel insurance can provide support if something unexpected occured.

Choosing suitable cover can be confusing, with different categories, policy types, inclusions, and exclusions to consider.

Where you're going, how long for, what you'll be doing, and your age and health are key things to think about when selecting a policy.

For example, you'll need to make sure your policy covers you for every country you'll be visiting, including your stopovers. Some places will be considered higher risk than others by insurers, so you may need to check out country-specific cover.

If part of your trip involves a cruise, you're into extreme sports, or you're planning to drive, you may need to pay extra so that you're covered for that activity.

Don't forget to tell your insurer about any pre-existing medical conditions too. Even if you're unsure whether to declare something, make sure you ask. It's better to be safe than sorry!

How much coverage will you need?

Now that we've covered the basics, including what to consider when deciding on a policy, let's delve deeper into the potential costs.

Firstly, travel insurance is not 'one size fits all' by any means.

We know Aussies are trying to save wherever they can, but choosing a basic policy that covers medical emergencies for the lowest premium possible could be a mistake.

This level of cover won't help pay to replace your property if it's stolen or if any of your tours are cancelled. If you can, try to curb costs elsewhere if your travel budget is tight.

Think you can deal with a lost bag or two on your own dime? Sure, you can buy new clothes, but how would you fare if a valuable piece of jewellery were stolen while you were travelling?

In the 2022-23 financial year, the Department of Foreign Affairs and Trade assisted Australians in 157 cases of theft overseas. This was a huge increase of 241% compared to the previous financial year.

It's important to consider all your belongings when travelling, including any valuables.

You may not think twice about the diamond ring you've been wearing for years or your smartphone, but the cost to replace these kinds of items could be more than the price of a comprehensive travel insurance policy. Keep in mind that insurers may have payout limits, so make sure you check this before you leave.

While we're on the topic of property, did you know lost baggage due to 'inattention' may prevent you from making a claim? It's true. According to recent research, 93% of people who travelled with insurance were unaware or unsure of at least one common policy exclusion.

What does your travel insurance policy include and exclude?

Reading the Product Disclosure Statement (PDS) is crucial for travel insurance policies.

We've all read the horror stories of Aussies caught out underinsured, facing hundreds of thousands of dollars in medical bills following an unexpected mishap overseas. Often, it's because of a stipulation in the fine print.

You usually won't be covered for the cost of any medical treatment if you're injured while under the influence of excessive alcohol, and policies vary when it comes to blood alcohol content.

Depending on which country you're in, you also may not be covered if you have an accident while riding a moped or motorcycle without obeying the local road rules, or not wearing a helmet.

To give you an idea of how quickly medical costs can add up, in the United States, fixing a broken leg can cost up to $7500, and the average cost of a three-day hospital stay is around $30,000.

Do you have adequate insurance at home?

Preparing for a trip is both exciting and a bit stressful. Travel insurance, passports, currency exchange... it goes on and on!

Making sure your home will be safe and secure while you're away is probably lower on your checklist, but confirming you have adequate home and contents insurance could save you thousands of dollars if an unfortunate event occurs while you're enjoying your trip of a lifetime.

This can include theft or damage due to storms, floods or fire.

Maybe you've bought a new computer or a smart TV since you took out your policy, or perhaps you've done some home renovations. These types of things can change the value of your home and its contents.

Worrying about your house back home is the last thing you want to do while trying to enjoy a croissant in Paris or some fish and chips in England.

If the unexpected were to strike and your home or its contents were not covered for its true value, you could be up for higher out-of-pocket expenses at claim time - something no one wants after they've just spent big dollars on an overseas adventure!

There you have it, two key insurances to think about before jetting off. Coverage for the unexpected, both at home and overseas. Now, you can relax and fully immerse yourself in the new sights and sights around you.

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