Young Australians hit by cost of living crunch skimping on travel insurance this Christmas

Many Australians are opting not to take out travel insurance in an attempt to save money amid a cost of living crisis ahead of the busy Christmas holiday season.

Many Australians are opting not to take out travel insurance in attempt to save money amid a cost of living crisis ahead of the busy Christmas holiday season.

Data from the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade shows that high travel costs are a factor in 60 per cent of Australians under the age of 30 saying they would not take out insurance.

Individuals with a household income below $100,000 are significantly more likely to travel uninsured (46 per cent) and with less than $1000 in savings (30 per cent), compared to those with higher income.

Overall, 34 per cent of Australians travel without insurance, with the most common reason for not doing so being that they “couldn’t afford it”.

The survey of 1000 Australians found that 86 per cent of travellers were finding ways to keep costs down while on holiday.

ICA chief executive Andrew Hall said travelling without insurance is a gamble and that a GoFundMe page is not an alternative to taking out adequate protection.

“We need to remind young people that the services they are used to accessing here like public health care, will not be free or available overseas. A travel insurance policy is an important level of personal responsibility when planning a trip,” he said.

“Even a short trip can be disrupted by unexpected events, such as illness, accidents, or lost luggage. Without insurance, travellers could be left facing significant financial burdens.

“A GoFundMe page is not an alternative to travel insurance if the worst happens.”

Seat capacity on airlines travelling in an out of Australia remained well below pre-Covid with 3.89 million seats available in August compared to 4.97 million in December 2019, according to the Bureau of Infrastructure, Transport and Regional Economics.

This was contributing to higher airfares, which are 50 per cent more on some routes than in 2019. Industry analysts say prices are slowly coming down as more Chinese airlines ramp up flights into the country.

The Australian Bureau of Statistics reported that holiday travel and accommodation costs were 6.8 per cent more in the 12 months to the September, which was down from a cost increase of 17.2 per cent in the year to December 2022.

PassportCard CEO Peter Klemt said he wasn’t surprised by the prevalence of travel mishaps but was shocked more Australians weren’t protecting themselves when travelling home or abroad.

“Aussies love to meticulously plan their dream holiday – every detail, every moment, perfectly orchestrated, but as we see every day, some ‘adventures’ can never be predicted,” Mr Klemt said.

“For holiday-goers, travel hiccups can eat into precious holiday time and funds, with travellers

often waiting weeks for reimbursement and claim resolution.”

The travel insurance group’s own research shows that only 22 per cent of Australians took out a policy for every trip they made either domestically or overseas.

CommBank iQ Cost of Living Insights Report last month found that those aged under 30 were the hardest hit by the cost of living crunch, with spending down 5.1 per cent in the demographic, with many diverting cash to essentials and experiences such as travel.

Originally published as Young Australians hit by cost of living crunch skimping on travel insurance this Christmas