Ultimate guide to travel insurance

FROM a snowboard crash to volcanic ash, here's all the information you need to decide what level of travel insurance will best suit you.  

Don't let hospital fees ruin your holiday. Picture: Supplied

NO ONE plans to break their leg skiing in Japan or lose their bags in London, but it happens.

That's why you buy travel insurance - to bet against the unthinkable.

Tailor your insurance
The best way to buy travel insurance depends on the type of traveller you are. If you're web-savvy, online travel insurance is the cheapest. Insurance through travel agents is generally more expensive but may better suit travellers who are not net-friendly, such as retirees going on a cruise.

Harry Senlitonga, financial analyst at Datamonitor in Sydney, said travel insurance through your credit card is another option. This cover is good but usually only comes with a platinum or gold card and not everyone has one.

"Surprisingly, premium credit cards offer very comparable travel insurance. A platinum card may cost you roughly $200 in an annual fee and you'll get free travel insurance," he said.

"If you went to the US for two months, an insurance policy may cost $300 to $400, so you can save money by using your card. But lots of different cards have different rules and some are strict that you have to pay for your entire airline tickets with the card."

Colin Bowman, general manager of marketing at Flight Centre, said you get what you pay for.

"Travel agents provide guidance but you can save money when you buy online. However, I would encourage travellers to know exactly what they are getting cover for," he said.

"Our insurance provider may not be the cheapest but you get assurance. People need to look closely to see if there are things excluded such as skiing, which won't be any good if you are going on a skiing holiday."

The chief executive officer of specialist travel insurance provider Mondial Assistance Australia, Brett Robinson, says where you purchase your travel insurance is a matter of personal choice - some people prefer a face-to-face experience via a travel agent.

But there is one non-negotiable - you absolutely must check the detail of your policy. Not all travel insurance is the same and it is important you understand exactly what you are covered for and what you are not. And the most important thing to check is your policy's emergency medical assistance cover should you become ill or be injured overseas.

You can always replace a suitcase or a camera but you can't replace your life.

Read everything
Steve Mickenbecker, head of research at Canstar Cannex, said it's boring but important to read the insurance "product disclosure statement" first. You are really looking to see what is not covered, what are the exclusions, specifically if you have an existing condition.

"Regardless of whether you travel overseas regularly, infrequently or on a once-in-a-lifetime trip, travel insurance is essential and can well mean the difference between fantastic and disaster," he said.

"Cancelled reservations, lost luggage, diverted flights, missed connections, bad weather and illness or accident can turn your well deserved holiday into a horror story.

"If you don't take out adequate travel insurance before you set foot out of Australia, you have rocks in your head.

"Medical insurance is at the top of the priority list as no one wants to arrive home after a trip with a longterm and very expensive financial burden to deal with."

Comprehensive travel insurance is the all-in-one package favoured by most people planning to go overseas. Many people, such as backpackers, travel light and are not so fussed about losing possessions but they do want cover for accidents and illness, offered by medical-only insurance.

The third type of travel insurance is domestic, which only covers theft since medical cover is unnecessary within Australia.

No travel insurance policy will cover you for every single thing that might happen on your holiday so it's important to get cover for what's important to you.

Insurance checklist
- Do you have unlimited cover where it counts - overseas medical, hospital, ambulance, emergency dental expenses? Also, is the medical cover adequate for possible expenses in the country you are visiting?
- Are you covered for emergency repatriation or evacuation? Do you have 24-hour emergency assistance? A team of experts who can help you with advice when you need it most is extremely valuable.
- What excess fees are involved? Read the product disclosure statement carefully to make sure you are aware of any excess and where it may apply.
- Are your travel documents, credit cards and cash covered? A good policy will cover the replacement costs if lost or stolen.
- Are you covered for activities you may participate in on your holiday? There are activities that are excluded from many policies or may require an additional premium to be paid, such as snowboarding, surfing and bungy jumping.
Source: Flight Centre

 For Your Information...

Best travel insurance by class
1. International: Southern Cross Travel Insurance and Worldcare Travel Insurance.
2. Domestic: Suncorp and Worldcare Travel Insurance.
3. Medical: Zuji online travel agency and Worldcare Travel Insurance
Source: Canstar Cannex

Cost of a night in intensive care at popular destinations
1. New York City, $16,000-$21,500
2. Hawaii, $10,500
3. Canada, $10,000
4. France, $9500-$12,500
5. Germany, $9500-$12,500
6. California, $8500
7. Florida, $8500
8. Thailand, $3000
9. Indonesia, $3000
10. Vietnam, $2000-$2500
Source: AAMI
 
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