Do I need travel insurance?
To insure or not to insure. Travel insurance is a topical issue for those regularly on the road: some say it’s a must-have, while others prefer to chance their arm and save the initial financial outlay.
Either way, travelling is one of life’s great experiences, whether it’s for leisure or business. With travel comes a certain amount of risk: flights are occasionally cancelled, baggage can get lost, and accidents happen while you’re on the road.
What’s more, these issues are generally compounded when you’re overseas.
The flipside is that insurance heaps additional expense to what is already a costly exercise, especially once flights, accommodation, food, shuttles and activities are taken into account.
Here, we look at whether travel insurance is a true necessity or a nice-to-have.
What is travel insurance?
In general terms, travel insurance is a type of insurance policy designed to cover losses and events that may occur while away from home.
These can vary from pickpockets targeting personal items to six-figure medical bills.
The Australian Government argues that travel insurance is just as important as remembering your passport during overseas travels.
What does travel insurance cover?
The number one reason for travel insurance is medical expenses, which can become very costly when abroad – especially in countries that don’t match Australia’s universal medical care scheme, known as Medicare.
A reciprocal healthcare arrangement exists between Australia and a handful of international countries: Belgium, Finland, Italy, Malta, the Netherlands, New Zealand, Norway, the Republic of Ireland, Slovenia, Sweden and the United Kingdom. This arrangement partially subsidises the cost of healthcare abroad for Medicare holders, but the reality is there are still out-of-pocket expenses which can become costly.
However, medical expenses aren’t the only reason for travel insurance. Trip cancellations, delays, lost luggage, natural disasters and even pandemics can all bring out-of-pocket expenses that insurance can make up for.
Travel insurance can also cover emergency medical evacuations or even stolen items.
Is travel insurance compulsory?
Travel insurance is not compulsory in most parts of the world, but as always, there are exceptions.
Singapore and the United Arab Emirates both require you to have travel insurance, not to mention all 29 European countries in the Schengen Area (those without internal border controls) if you’re applying for a visa to visit. The Smart Traveller website has a full rundown of what the requirements of entry are into each country.
Travel Insurance is not compulsory when you’re travelling within Australia.
That said, it can be handy for covering unforeseen events like the excess or deductible that you have to pay to the rental agency if your rental vehicle is damaged or stolen.
When should I purchase travel insurance?
If possible, it’s worthwhile purchasing travel insurance as soon as you’re booking your trip away.
This way, should something happen in the lead-up to your trip which means you can no longer travel, you’re still likely to be covered.
Where can I purchase travel insurance?
You can purchase travel insurance from airlines, credit card companies, online marketplaces, travel agencies and dedicated travel insurance companies.
Traditional insurance companies like the NRMA also offer travel insurance. And My NRMA members can save up to 10% on a new policy.
It is said that travel insurance generally costs about 5 per cent of your trip cost. So for a $5000 trip, expect to outlay around $250 for travel insurance for one traveller.
Exactly what you pay depends on the trip’s cost, your age and how much coverage you buy.
Does travel insurance cover adventure activities?
This is an important rule if you’re considering travel insurance: always read the fine print. Some insurers offer automatic coverage for a range of activities, while others require you to purchase additional cover or pay an extra premium.
This might mean your day of snowboarding or horseback ride through the wilderness is potentially not covered despite holding travel insurance.
As with any insurance product, it pays to thoroughly read the Product Disclosure Statement, or PDS, before agreeing to terms and conditions.
Do I need travel insurance?
Ultimately, the answer is down to the individual and the type of travel they’re doing.
It’s true that not purchasing travel insurance can help you avoid outlaying more money in the interim, but it can also help safeguard your travel plans and assist if things go awry.
