Do your bit and check the fine print: the major travel insurance pitfalls Aussies need to know

Ceyda Erem

29 Jan 2020

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  • Common conditions, such as asthma, diabetes and high blood pressure are not always automatically covered

  • 48% of travel insurers do not cover credit card theft

  • Pregnant women are only covered until 24 weeks on average, however a pregnancy conceived via IVF may not be covered

From sailing the high seas with the family to taking a solo trip around Europe, no Aussie travels the same. But if there’s one common interest most travellers share, it’s taking out travel insurance before kick starting their holiday.  

But according to Mozo research, while purchasing travel insurance may be on many traveller’s to do lists, failing to read the fine print could turn their long awaited holiday into an insurance nightmare. 

Following a review of product disclosure statements (PDS) from every underwriter in the Mozo database, a number of travel insurance grey areas came to light. 

Common medical conditions like asthma, diabetes, epilepsy, high blood pressure and cholesterol were not automatically covered under some policies. 

For example, epilepsy was not covered by 11% of policies. In order for a traveller to receive cover for their epilepsy, 2% of policies required it to be added as an optional extra for an additional premium, while 33% of policies would only provide cover at an additional cost following a medical assessment. 

“It absolutely pays to read the fine print, because things that you may assume you’re covered for are not always guaranteed,” said Mozo Director, Kirsty Lamont. 

“While researching flight prices and accommodation to stay in can be exciting elements of preparing for a holiday, it’s important to understand what a travel insurance policy will cover you for, before you purchase it. This can help you avoid crippling costs in the event of a medical mishap, theft or the need to fly home due to unforeseen circumstances.”

A note on the coronavirus: If you have an upcoming trip to China, it’s worth mentioning that cover for outbreaks and pandemics are excluded from many travel insurance policies. A travel insurer may also not provide cover if you have breached quarantine regulations or failed to follow government or media warnings. In any case, it’s best to check with your insurer to make sure you’re aware of the risks before flying out.

Pregnant and older travellers face cover restrictions 

Aussies planning to take a ‘babymoon’ before their little bundle of joy arrives may find it difficult to secure cover, as the data revealed that 12% of insurers do not cover pregnancy. 

For those insurers that did cover pregnancy, only ‘normal’ pregnancies of up till 24 weeks were covered - a normal pregnancy is defined as a single fetus that has no diagnosed complications and was not conceived via IVF. 

Half of the analysed policies did not cover childbirth in any circumstances and no insurers covered newborn or antenatal care. 

Older Aussies may also find it difficult to secure cover for their trip, with all travel insurance policies in the Mozo database imposing age restrictions. Despite the fact that 76 was the average age were cover was restricted, one insurer began restricting cover from the age of 70. The average age covered ceased entirely was 85. 

The four types of age restrictions insurers have in place 

When Mozo assessed the travel insurance policies offered to older Aussie travellers, there were four types of age restrictions insurers had in place: 

- 38% don’t provide cover over a certain age, which can be anywhere between 70 - 85 

- 46% do not sell basic policies to senior travellers and only offer comprehensive cover to senior travellers 

- 8% offer mature traveller policies catered to their needs 

- 8% impose a large excess when travellers over a certain age make a medical claim, which can be as much as $2,000 

Mental health yet to be recognised pre-existing condition by many insurers

In 2018, Mozo investigated the quality of mental health coverage across 47 travel insurers with a mystery shop. The analysis found that 51% of insurers did not cover incidents related to mental health and found a large inconsistency among insurers regarding how mental health conditions are defined and diagnosed. 

“The travel insurance industry is exhibiting a high level of discrimination against mental illness, with many insurers placing it in the ‘too hard’ basket,” said Lamont.

“While it’s feasible to cover for a range of conditions, from cancer to heart disease, mental illness falls into a murky area that many travel insurers don’t want to touch.”

And although it doesn’t mean taking out cover for mental illness is out of the question entirely, it’s another reminder for Aussie travellers to take care and read the fine print before jetting off.

The activities that are (and aren’t) covered  

Mozo uncovered that travellers were more likely to be covered for riskier activities like bungee jumping (95%), than jumping aboard a cruise (45%). In fact, 54% of insurers do not automatically offer cruise cover unless it’s added as an optional extra for an additional premium, while 21% do not offer any cover.  

Surprisingly, only 1% of insurers offer no cover for surfing and trekking. 

Other factors to consider before taking out travel insurance 

Travelling presents plenty of opportunities for excitement and exploration, but for many Aussies, too much fun can often leave them in a spot of trouble when the time comes to make a claim. So if you’ve got an upcoming trip, be aware of the following: 

- Drinking alcohol - There’s nothing wrong with having a cocktail (or two), however keep in mind that any incidents that occur while under the influence of drugs or alcohol will void your policy. 

Credit card theft - While it’s important to keep an eye on your spending during your trip, it’s also wise to keep your wallet hidden from prying eyes, as 48% of travel insurers do not cover credit card theft. 

STI’s and STD’s - Thinking of picking up more than just a souvenir in Spain? Remember to play it safe, as any sexually transmitted infections or diseases aren’t covered.    

Death cover - Having a cheap as chips policy is set to save you a few bucks, however, basic policies do not provide death coverage. Of the 374 policies in the Mozo database, only 70% cover death. 

So if you’ve got an upcoming holiday, having a great value travel insurance policy on your side can give you peace of mind if you find yourself in a sticky situation. You can compare more than 250 travel insurance policies by using Mozo’s travel insurance comparison tool