Travel insurance – or the lack of it – hits the headlines every time an adverse weather event (such as a volcanic ash cloud) causes major disruption to international lights.
Sadly, too often we hear tragic stories of families in distress because a loved one with no insurance has been left stranded in a hospital overseas with huge medical bills. Typically, not having insurance almost always means the family cannot cover the cost of a medical evacuation back to Australia.
Travel insurance is one of those things you hope you never have to use because it means that somewhere along the line, something went wrong during your holiday.
However, the fact is that sometimes the unexpected does happen; and when it does, far away from home, nothing is more comforting than to know that you and your loved ones are covered – that everything will be taken care of to bring you safely back home. Hopefully by the time you finish reading this advice you will have all the information you need to ensure you never find yourself caught out of pocket and far from home.
Did you know?
More than one in five Australian travellers (23 per cent) risk not having the insurance they need because they don’t read their policy document.
Before you buy…
- Shop around for the policy that best suits your specific needs.
- Compare products and features, not just prices, between a few different insurers.
- Check that you will be covered for full medical evacuation in case you need to be transported home in a medical emergency.
When to buy?
Organise travel insurance as soon as you have paid for your trip. That way you may be covered for unused travel and accommodation if you need to cancel your trip due to illness or natural disaster. For international journeys, travel insurance is as important as your passport regardless of your destination. If you incur medical expenses overseas and you don’t have travel insurance, you are personally liable for the costs. These cannot be paid by the government, Medicare or your domestic private health insurance.
Australia’s Reciprocal Health Care Agreement with certain countries is not designed to replace travel insurance. This is because it doesn’t provide full coverage for all health services, nor the costs of medical evacuation back to Australia, which can be hugely expensive. Also, reciprocal health care agreements generally only cover treatment provided in public hospitals, and not private medical centres.
To find an insurer that offers travel insurance, visit findaninsurer.com.au/category/36
What to look for when choosing a travel insurance policy
Things to consider:
- What is included in the policy?
- What is excluded, and how this compares with your intended activities?
- How many people are going to be covered by the insurance policy?
- Look at what coverage provided on specific pre-existing conditions.
- Are there any age limits that may apply to you and any other person covered by the policy? Different insurers may insure to different age limits, so it is important to shop around.
- The dollar limits for claims on individual items and as a whole – if you’re taking expensive items with you on your trip, you might need to list them separately.
- The cost of your insurance premium.
- The excess amount you would pay on a claim, including any additional excess you will pay to make a claim on a pre-existing medical condition.
- Read the Policy Document and Product Disclosure Statement (PDS)carefully to make sure that the risks that are important to you and your family are covered — and how much they are covered for.
For up-to-date travel advice, news, guidance and important information for Australians travelling overseas, visit smartraveller.gov.au
What to do if you have a preexisting medical condition
Before you purchase insurance, it is important to know whether your pre-existing medical condition is covered or not. The Product Disclosure Statement (PDS) (the document that describes the cover provided by an insurer) will detail the conditions that your insurer won’t cover, or may cover for a higher premium.
If you are unsure about whether you have a medical condition that needs to be declared, you should contact your insurer to discuss the issue. Discuss your travel plans with your doctor before making any bookings.
If you are taking large amounts of medication you should take a letter of explanation from your doctor, in case you require medical treatment while overseas. If your health circumstances change between the time you have purchased your policy and the time you leave for your trip, you should check your policy to ensure you still have appropriate coverage.
What to do if your travel plans are impacted while you are away from home
The grounding of flights between Australia and Bali in July this year because of safety concerns regarding volcanic ash from the eruption of Mt Raung, in East Java, provides an excellent example of what can happen while you are travelling… and also of how the impact of this kind of incident while travelling can be mitigated by having an appropriate travel insurance policy in place. Thousands of travellers were affected by the cancellation of lights intermittently throughout July. The Insurance Council of Australia issued guidance to travellers urging them as a matter of priority to contact their travel insurer – prior to incurring any additional costs – to clarify how their policy may be able to assist, particularly if their travel provider did not provide compensation or alternative arrangements.
“For international journeys, travel insurance is as important as your passport regardless of your destination”.
It is important to understand that travel insurance policies vary from company to company; some will compensate you for out-of-pocket costs incurred but it is important to familiarise yourself with the specific instances in which you are – and are not – covered before you travel.
It is also very important to understand the basic fundamental that insurance policies cover the traveller for financial losses – not for inconvenience. If you are in doubt about your policy inclusions and exclusions you should call your insurer to talk it through and carefully read your product disclosure statement before you depart.
Need more information on travel insurance? Visit understandinsurance.com.au for more useful tips.
Mr Rob Whelan
Rob Whelan is Executive Director and CEO of the Insurance Council of Australia (ICA). 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, larger organisations and not-for-profit 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.