Travel insurance savings go both ways: don’t leave home without it

Travel insurance for holidaying Australians is more expensive than before Covid struck, but the cost of doing nothing can be devastating. Do not leave home without it.

Travel insurance copped criticism in 2020 after the fine print in many policies prevented pandemic-related payouts, but times have changed quickly for this vital form of financial protection.

Covid-related cover is now offered by many insurers, and as the holiday season prepares to take off consumers are being urged to not leave home without it.

Travel insurance, like other insurance, is viewed as the original form of crowd-funding – long before the emergence of GoFundMe online pleas for help following personal disasters.

“Insurance is crowd-funding except you do it before the terrible thing happens rather than waiting for someone to be lying in a hospital bed,” says Fast Cover Travel Insurance chief operating officer Craig Morison.

While insurance’s benefits can be huge if a holiday disaster happens, travellers can also save money by choosing their cover wisely, with recent research finding people may pay twice as much as they need to if they don’t shop around.

Overseas travellers can face astronomical medical bills if sickness strikes on holiday.

HOW IT SAVES YOU

Travel insurance covers more than just accident and injury claims. The federal government’s smarttraveller.gov.au website has information about what policies cover including lost baggage, theft, cancellations and delays.

“Medical bills in other countries can be significant, even for minor procedures,” Morison says.

“A travel insurance policy of a few hundred dollars could end up saving you thousands.”

It’s not just for overseas travel. People holidaying domestically and hiring a car may find it cheaper to take out a domestic travel insurance that covers the hirer’s expensive car insurance excess waiver fees.

New research from Finder.com.au shows flights and travel will be the biggest expense for most Australians this holiday season, and Finder spokesman Gary Hunter says some travel insurance policies cover you for up to $7500 of rental car excess.

“Rental car excess cover is often included with domestic travel insurance policies so you can avoid paying the pricey insurance dealerships often charge,” he says.

“If you’re travelling as a family, some policies will let you add your kids on to it for free. They’re usually covered up to the age of 20 or in a couple of cases 24.

“Make sure your trip covers Covid-related expenses. This doesn’t just include medical expenses you might incur. It can also cover you for flight cancellations and additional accommodation expenses.

“While it was true before Covid that most insurers wouldn’t cover you for pandemic, there’s been a huge shift in the market.”

Comparison website Mozo.com.au says more than 30 insurers offer a form of Covid-19 cover.

HOW YOU CAN SAVE

Mozo’s research has found the cost of travel insurance has climbed an average 57 per cent since 2019 for trips to Bali, Thailand, Britain and the US, and it says travellers could save up to $621 by comparing prices and policies.

“Rushing into a travel insurance policy without shopping around can be a very costly mistake and set holiday budgets back by hundreds of dollars,” says Mozo spokeswoman Claire Frawley.

“The price of travel insurance is greatly impacted by the destination, with factors like the cost of medical treatment, re-booking flight cancellations and destination-specific risks coming into play,” she says.

New Zealand is the cheapest popular destination for travel insurance, Mozo found.

Finder’s Hunter says people can also look for sign-up discounts and exclusives.

“Lots of insurers are offering them to try and gain more customers,” he says.

Fast Cover’s Morison says people with birthdays coming up can buy their travel insurance before their birthday, because premiums rise with age.

“Buying travel insurance with your fellow travellers may save you money and some policies don’t even require them to be family members,” he says.

Mozo.com.au's Claire Frawley says compare premiums before buying a policy.

Travellers can potentially save money by checking if their credit card has automatic travel insurance. When Covid-19 struck in 2020, credit card-linked policies were among the few that paid out pandemic claims.

Canstar group executive financial services Steve Mickenbecker says travellers heading overseas should seek quality cover for Covid risk, “but not to the point that they ignore other risks”.

“There are many other events outside of Covid, for which travel insurance provides financial protection,” Mickenbecker says.

“Travellers wanting to trim their costs might compromise on cover for cancellation costs and baggage, but should not skimp on overseas medical cover. The other costs are financially known, but medical care overseas is open-ended and can place a considerable burden on travellers caught out.”

TRAVEL INSURANCE TIPS

• Compare policies to help you get the best-value cover.

• Read the fine print to help ensure your policy covers all your holiday plans.

• Take out cover early, to protect yourself against events that may cause cancellation.

• Know where you stand if you catch Covid and must pay for an extended stay, cancel your flight or quarantine.

• Stay across any local government advice and regulations.

• Disclose pre-existing health conditions, as not doing so could see a claim denied.

Source: Mozo.com.au, Canstar.com..au

Originally published as Travel insurance savings go both ways: don’t leave home without it