Holidays are an exciting time regardless of how you like to enjoy them. You may prefer to head to the beach or prefer the tranquility of mountain views, maybe you’re a city lover or seek an escape to the country. Regardless of your travel preferences ALL travel comes with risk. No one likes to think of anything going wrong while on holiday but we’ve all heard the horror stories. It’s wise to make sure you’re prepared for every eventuality.
You may currently have insurance for your home and contents, your car, your health – basically anything that’s at risk of being damaged due to an event or an accident. It’s important to read the small print however as most of this cover only applies to events or accidents that happen in Australia. Once you leave the country, you’re not covered.
Travel insurance is designed to meet the potential risks you may have when overseas. You can travel without insurance and, depending on what happens, you may have a legal case against anyone who wrongs you while on holiday. But should something go wrong it’s worthwhile considering whether you’re going to be in the mental – and financial – state to be filing claims in another country. With travel insurance, you file a claim with the insurer and they handle the rest.
- Travel insurance needs to be taken out PRIOR to undertaking the travel. You will not be able to make a claim after the event has occurred.
- Travel insurance comes with an excess – an amount you will need to meet for the first specified level of a claim. The higher the excess you are willing to meet yourself the lower your premium is likely to be.
- Check with your credit card provider as you may already receive travel insurance as part of your contract. Check the fine print however as it might only apply to flights or items booked with said credit card.
- To make a claim you’ll need to call an international contact number which will be provided with your policy. Make sure you take it with you and keep it with a few things (so if your wallet gets stolen, you still have a record of it in the hotel room, or in your suitcase).
- Reputable airlines may reimburse you for losses incurred with misplaced or lost luggage, but you’ll need to submit a claim with no guarantee of result.
You will generally get what you pay for with travel insurance and you can get any level of cover, from basic to comprehensive with a premium to match. Prices are based on the level of excess, the value of the cover, what events are covered, the duration of the travel, the ages of those to be covered, and the destination. Comparison websites will give you an opportunity to see how each option measures up.
So, what does travel insurance cover?
Hospitalisation, illness or death – Health is always a major concern when travelling. Having an accident or injury can be worrying at the best of times; being in a foreign country where you don’t understand the procedures and don’t speak the language can be especially concerning and the cost of medical treatment is sky high in most countries of the world. You will want to be sure your medical costs or expense of returning your remains will be taken care of. Check if your policy will cover for pre-existing medical conditions also.
Rental cars – Although most rental companies offer an insurance option you will still need to be covered for the excess in the event of an accident or injury to another person. In this case you will want your own travel policy to make up the difference. It may be better to take a higher excess policy with the car company if your own insurance will cover the gap for much less cost.
Lost baggage – Airlines aren’t renown for taking care of your property! If your bag goes missing, even temporarily, this will see you without clothes or other necessities until the bag is returned. A good policy will provide you with an allowance to purchase replacement items to tide you over. It will also cover you in the event of damaged luggage by baggage handlers. You may have a claim against the airline in these circumstances but it may be a simpler course to claim under your travel insurance.
Theft – Sadly not everyone in the world is honest and travellers can be easy targets due to their lack of local knowledge and highly saleable items like cameras, jewellery and electronic equipment. Make sure your policy covers you for the fair cost of replacing anything you have of value with you, and consider leaving your diamond rings at home.
Flight cancellations/delays – If airlines are poor at handling baggage they can be even worse at flying on time. Delays and cancellations can see you missing connecting flights or forced to pay up for additional accommodation. Make sure you have adequate cover for the cost of disruptions to your trip.
Terrorism – Unfortunately most policies won’t cover you for terrorist events. The good news is statistically speaking you have a greater risk of being struck by lightning then getting caught in a terror related incident
Natural disasters – Floods, earthquakes and storms can all wreak havoc with travel plans. Be aware of the chances and plan accordingly. Choosing the right season to travel can heavily reduce this risk.
Determine your individual risks and choose a policy that will match it. Once you’re done sit back and enjoy the trip!
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The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a financial adviser or other finance professional.