[hr]Though overseas travel may broaden the mind, don’t let it broaden your wallet too much with unexpected expenses such as medical costs – make sure you pack your travel insurance too, writes Rob Whelan.[hr]
And, don’t expect the Federal Government to bail you out if you don’t have travel insurance.
If you incur medical expenses overseas and don’t have travel insurance, you are personally liable for covering these costs. The Government cannot pay for medical expenses overseas. Nor will Medicare or your domestic private health insurance.
The Department of Foreign Affairs and Trade assists more than 20,000 Australian travellers each year who find themselves in difficulty overseas, including more than 700 hospital admissions, 600 deaths and 100 evacuations of Australians to another location for medical purposes. However, the Australian Government does not pay any costs, such as legal fees, emergency flights or medical care. Its Smartraveller website makes it clear that “travel insurance is as essential as your passport, and if you can’t afford travel insurance, you can’t afford to travel” – www.smartraveller.gov.au.
But one in five Australians who travel overseas regularly do not take out travel insurance.
A Quantum survey of more than 500 Australian travellers commissioned for the Understand Insurance consumer awareness initiative found 19 per cent of Australians who travelled abroad in the past two years went without travel insurance.
Medical treatment in destinations such as the US and the Asian region can be very expensive where even a minor hospital visit can leave you thousands of dollars out of pocket. According to the Department of Foreign Affairs and Trade, daily hospital costs in Southeast Asia regularly exceed $800 and return of remains from Europe can cost in excess of $10,000. The cost of medical evacuations from the United States regularly range from $75,000 to $95,000 and sometimes up to $300,000. DFAT has also handled medical evacuations from Bali in which costs have exceeded $60,000. DFAT recently revealed 1372 Australians ended up in hospital overseas in 2012-13, an 8.5 per cent increase over the previous year, and the top five countries where Australians required hospital stays were Thailand, Indonesia, the US, China and Italy.
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Other key findings of Quantum’s Understand Insurance survey included:
- Despite travelling regularly, 17 per cent of Australians
- who travel abroad at least once a year admitted to not buying insurance
- Frequent travellers were also significantly more likely to underestimate the potential liability they faced travelling without insurance. Fifty-eight per cent of Australians who travel every year believed they would not incur significant debt if they got in trouble overseas while not insured, even in a worst-case scenario.
- Men were far more likely to travel without insurance than women. Nearly one in four (23 per cent) Australian men travelled aboard without insurance, compared with 16 per cent of women
- 23 per cent of Australian travellers did not know what was covered in their travel insurance, and one in three admitted to not reading their insurance policy in detail
- 44 per cent did not consider what their travel insurance policy excluded
So, what factors should you consider when it comes to travel insurance? Typically, your travel insurance will be assessed on the following:
- Your age – each insurer sets its own criteria so it is essential to shop around for the best value, especially if you are over 75 and require no medication
- Your destination – insurance for countries where medical costs are high, such as the United States, will cost more
- Your stay – the length of your stay overseas
- Your pre-existing conditions – whatever your age these will add to your insurance costs
The following travel insurance tips from Understand Insurance may help you find travel insurance for your needs:
[pullQuote]“If you have a pre-existing medical condition and you don’t tell your insurer about it when you take out insurance, the insurer may refuse to pay some or all of any claim you make later.” [/pullQuote]
Understand Insurance’s travel insurance tips
- Shop around for the policy that best suits your needs and compare products and features, not just price, between a few insurers (read Heather’s story)
- Most travel insurance policies have age limits or restrictions. However, several travel insurers offer policies specially designed for retirees or senior travellers – visit www.findaninsurer.com.au
- Your credit card may include travel insurance if you pay for your flights and accommodation with it, but check its inclusions and exclusions to ensure it meets your needs
- Make sure you understand all conditions and exclusions in your policy – read your Product Disclosure Statement
- Buying your insurance as soon as you pay the deposit for your trip does not cost any more, and the cancellation cover can start straight away
- For pre-existing medical conditions, your PDS will detail the types of pre-existing medical conditions that your insurer won’t cover or may cover for a higher premium. If you are not sure about whether you have a medical condition that needs to be declared, you should contact your insurer and discuss it. If you have a pre-existing medical condition and you don’t tell your insurer about it when you take out insurance, the insurer may refuse to pay some or all of any claim you make later. Many insurers will provide cover for travellers with pre-existing conditions, though they may exclude claims that arise from that particular illness or condition
- If your health circumstances change between the time you have purchased your policy and the time you leave for your trip, you need to let your insurer know before you depart
- For travel to the US, Japan and Europe, make sure you have unlimited hospital/medical cover
- Check that you will be covered for full medical evacuation in case you need to be transported home in a medical emergency
- If you become ill or injured, contact your travel insurance provider. Collect all medical and other related documentation that will be needed for making your claim. Get a signed statement from the Registrar of the hospital where you were treated
- If you are over a certain age, such as 65 years, some travel policies may only cover you for a certain length of travel time, such as three months. Check your policy to make sure you are covered for the entire duration of your trip
- Australia has reciprocal healthcare agreements for seniors with some countries, such as the United Kingdom, New Zealand, Italy, the Netherlands, Sweden, Finland, Norway and the Republic of Ireland, which means emergency care is available. However, travel health insurance is still needed. Check with Medicare for the latest information on countries participating in reciprocal healthcare agreements
- Discuss your travel plans with your doctor before making any bookings. If you are taking large amounts of medication you will need to take a letter of explanation from your doctor
- Visit Smartraveller before you leave, and familiarise yourself with advice about the destination to which you intend to travel
She advises travellers with a pre-existing medical condition to keep asking questions about other cover options – you will always find out something you didn’t know, which means you are better informed before you make your next call. And you may end up finding cover for what you want.
Heather relies on internet searches and calling insurers’ contact centres but recently she was referred to Vero by her mortgage provider. She has now bought travel insurance from Vero several times and though it added a load limit for her condition on her first two policies, as a returning customer this has now been waived.
Heather has only made one claim for a fall in Venice in which she broke her dentures, suffered bruising and a black eye. She says the claims process was straightforward and the staff helpful. And Heather intends to keep on travelling, so long as the walking is not too difficult.
Heather Lewis, 76, travels regularly overseas – Canada and Alaska, New Zealand, UK & Ireland and Europe – and makes a point of shopping around for the best policy for her needs. Though Heather has a heart condition, she has been able to obtain both general travel insurance (without medical cover) and also full medical cover.
Joan Nicholson, 78, travelled to the UK in 2012 on a six– week trip to visit family. She had booked her trip by paying with her credit card, and then spent one Sunday afternoon searching online for a travel insurance policy, speaking to several insurers about her pre-existing medical condition before choosing one that suited her best.
Unfortunately, a family tragedy meant she returned to Australia just one week into her trip – her husband had passed away unexpectedly. Luckily her sons and daughter were able to travel back with her to Australia and help with the funeral arrangements.
While sorting through paperwork for her travel insurance claim she realised that her credit card had travel insurance automatically included if it was used to pay for flights and accommodation. Importantly this did not include an age limit for a relative falling ill or dying (her husband was aged 78). She was able to claim on the credit card policy for the cost and disruption caused by her return to Australia, and used the funds to resume her trip later that year.
Her advice? “Check your credit card to see if travel insurance is included when paying for flights and accommodation, you may be surprised.”
To find an insurer that offers travel insurance, visit www.findaninsurer.com.au. This is a free service.
For more information:
- www.understandinsurance.com.au guides you in simple, easy-to-understand terms through the process of understanding your risk, buying travel insurance, finding the right policy, ensuring you have enough coverage, controlling your costs and making a claim
- Use the ICA’s Find an Insurer service – www.findaninsurer.com.au – to help you find a travel insurer. This is a free service
- Visit the Smartraveller website for more travel tips and to register your trip – www.smartraveller.gov.au
The ICA is the representative body of the general insurance industry in Australia, which is a significant part of the financial services industry. ICA members provide insurance products ranging from those usually purchased by individuals (such as home and contents insurance, travel insurance and motor vehicle insurance) to those purchased by small businesses and larger organisations. In November 2013, the ICA launched Understand Insurance, a national consumer financial literacy initiative that helps consumers make better, more informed decisions by demystifying insurance.
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