When is the best time to purchase travel insurance?

It appears that Australians have grand plans to take to the skies and the roads in large numbers again this year, with a recent report revealing a strong desire for domestic and international travel.

More than three quarters of Australians surveyed as part of research undertaken by American Express said that they were planning to take up to three holidays this year.

In fact, the 2025 Global Travel Trends report notes that roughly one in three Australians (34%) are planning to travel more domestically and internationally compared to last year, while 51% will take as many domestic trips as they did in 2024 and 43% will do as much international travel.

Along with organising flights, accommodation and the others parts of any trip away, it seems as though the vast majority of travellers are also planning to take out travel insurance to cover their trips.

Research conducted by Allianz found that more than four in five travellers (82%) will be purchasing travel insurance for their next trip away.

Travellers highlighted the potential for illness (49%), insufficient cash (45%) and flight cancellations or delays (43%) as the major motivators for taking out insurance.

"You don't know what's going to happen when you travel. So having travel insurance can give you peace of mind that, if the worst goes wrong, you're not going to be left significantly out of pocket," says Phillip Portman, spokesperson for financial comparison website Compare The Market.

What should travellers look for in an insurance policy?

Cost will be one of the major considerations for travellers when it comes to choosing a travel insurance policy. Ultimately, that may be dictated by a travellers' needs on a specific trip though.

A basic insurance policy may be enough for some trips, while a more comprehensive level of cover or even additional addons may be needed for others.

"As a bare minimum with comprehensive cover, I'd say look out for 24/7 emergency assistance and make sure that you've got some great medical cover in there," Portman says.

"When you're traveling overseas, particularly to countries where we don't have reciprocal healthcare agreements, you may want to make sure that you've got cover for things like accidents or illness because we know that the cost of medical attention can be quite high.

"You may also want to make sure that the policy has cancelation cover for things like pre-booked travel or activities. And obviously lost luggage and personal liability cover."

While travel insurance policies typically have labels like 'basic' or 'comprehensive' cover attached to them, Portman recommends looking at each individual policy carefully.

"It's really important to know that even if different providers are offering comprehensive policies, they can have different inclusions. So you always want to make sure that you're looking at what those inclusions are," he says.

Does travel insurance cover cruises and adventure sports?

Electing for a decent level of cover for medical events, travel delays and even personal effects may fit the bill for a conventional sight-seeing trip to Japan or a family holiday to New Zealand, but Portman says that travellers can - and do - get caught out with more niche trips and activities.

"People think travel insurance is one-size-fits-all, but that's not the case. There are a few things you may need to do to make sure you've got the right level of cover for the type of holiday you're taking.

"Sky diving, surfing, hiking and skiing are not usually typical inclusions, so you may have to add those types of activities on as an extra with your policy.

"That will come at a little bit of an extra cost, but it may give you peace of mind that, if something goes wrong when you're doing one of those activities, you've got cover."

Another common misconception around travel insurance, Portman says, comes with cruise holidays - even those originating in Australia.

"A lot of people think that a standard travel insurance policy will cover them for a cruise, but that's not actually the case. You will need to add on that extra cruise cover to make sure you're covered.

"That's important even if you're taking a domestic cruise. A lot of people think, 'Oh, I'm just traveling in Australian waters, I'll be covered by Medicare or private health insurance.' But that's not the case."

Does it matter when you take out travel insurance?

Once the excitement of booking flights and accommodation is over, it may be tempting to leave travel insurance for another day. However, there may be benefits to purchasing cover immediately after.

"Our recommendation is to always take out cover as soon as you make those travel plans. Say that you've just put down a deposit for a holiday or you've just made a booking, that's usually the time you will want to lock in travel insurance," Portman says.

The reason behind this thinking is that by taking out insurance early, travellers may be covered in the event that something goes wrong before they even leave. As Portman explains, there are any number of things that can occur prior to departing.

"You or someone within your party could become sick or injured, so you may not be able to take the holiday as planned. Your travel documentation might not be up to date, or it could have been stolen.

"Then there are natural disasters. Or there may have been an update through Smartraveller that you might not be able to travel to your destination.

"So taking it out as early as possible really gives you that peace of mind that, if something goes wrong before the trip, you've got that cover if you need to change the day, change the time or make amendments so that you can still take that holiday."