Travel insurance 101 guide

There's a common mantra: "If you can't afford travel insurance, you can't afford to travel." This might sound a bit narky, but the reality is travel insurance is really important. Hospital bills can reach into the millions and if you're in a country like America with no free medical care, you'll be in serious financial trouble if you don't have any travel insurance.

So if you're planning to jetset around the world you'll want to grab yourself some comprehensive travel insurance cover to ensure you don't end up neck high in debt!

In a nutshell: Travel insurance covers you for any unfortunate events that may occur, such as medical illness and personal liability when overseas.

Types of Travel Insurance:

  • Single/multi trip travel insurance: If you're a regular adventurer travelling two to three times a year, instead of purchasing travel insurance every time you go overseas think about multi trip cover. Not only will it save you some cash that you can put to better use on your trip, you'll be free to roam at a whim knowing that you have the right cover.
  • Snow travel insurance: Planning on hitting the slopes this winter? You'll want to look at getting yourself snow travel insurance because standard travel insurance policies usually don't cover snow related accidents. Snow travel insurance will cover you for any gnarly wipe-outs or unexpected snow storms!
  • Backpacker's travel insurance: Experiencing the unknown is one thing, being covered for the unknown is another thing all together. Backpacker's travel insurance is essential if you are planning on trekking the globe. Backpackers insurance generally covers you for longer periods of time than standard insurance and can include some extreme sport cover so you can do those fun activities like bungee jumping and hang gliding without a worry.
  • Seniors travel insurance: The golden years is the perfect time to discover the world and there are many travel insurance policies that cater specifically to seniors. Seniors travel insurance policies usually have top notch medical cover and include fun holiday activities like cruises and packaged multi-city tours which are sometimes an extra charge with regular insurance coverage.
  • Travel insurance for pregnancy: Thinking of a babymoon? Travel insurance generally covers pregnancies up to the end of the second trimester. There are some exceptions to pregnancy travel insurance , say you've had past complications or are expecting twins but even then you might be able to pay an extra premium and be covered.

What are you covered for?

Every travel insurance policy will have its quirks. The key is finding the right cover and understanding the limitations of the cover so that you can get the best cover for your trip at the best price.

Standard travel insurance policies usually cover:

  • Medical expenses: Travel insurance policies are generous when it comes to medical care with many offering unlimited cover or cover into the millions. However, it's important to note that most travel insurance policies don't cover pre-existing medical conditions, such as heart conditions or diabetes.
  • Dental: Chipped tooth? Emergency dental care is included in the majority of travel insurance policies but any ongoing dental work needed when you return to Australia is not covered.
  • Personal liability: Accidents happen! If you're found responsible for another person's injury while travelling you will seriously need personal liability cover ($2 million is the standard amount).
  • Luggage and personal belongings: Cover usually ranges from $2,000-$12,000 depending on your travel insurance cover. Any wise traveller should keep in mind that there is no cover for unattended personal belongings in a public place or unmanned vehicles.
  • Accidental Death and Injury: If you are permanently disabled as a result of an accident or you die while away, you or your estate will receive money to pay for repatriation or loss of income.
  • Cash: Not all travel insurance policies include cash reimbursement. The ones that do usually cover $100-$200 and most clauses state that you have to have the money on you at the time of theft.
  • Rental car excess: If you are planning on renting a car while you're on holiday your travel insurance will usually cover any rental car excess. So DON'T take out that expensive excess reduction insurance with the rental car company!
  • Cancellation and delays: If your flight is delayed or you have to cancel your trip you'll get reimbursed by your travel insurance provider. Generally your flight has to be delayed by over 24 hours for you to receive travel delay reimbursement.
  • Airline and holiday insolvency: What happens if one of your pre-paid holiday companies goes bust? By having airline and end supplier insolvency included as part of your travel insurance you'll be covered if the tour company goes belly-up and you've prepaid your expenses!

Tips for finding the right travel insurance policy:

  • Don't just grab the first (or cheapest) travel insurance policy you see. Read the fine print and know what you're covered and not covered for. This could save you big bucks, as well as an unnecessary holiday headache
  • Check which policy is best for you depending on your destination or holiday. If you are heading to America, gold cover might be essential but if you're going to New Zealand medical limits might not be quite so important, so you could go with lower budget cover.
  • Find out if the premium reflects what is included in the cover. No point paying top dollar if the medical or luggage limits are not adequate for your holiday.
  • Make sure that you are comfortable with the excess amounts you'll need to pay in the event of a claim. Some policies have different amounts depending on the claim type. For instance, you might have to pay $1000 excess for medical claims but only $200 for luggage delays.
  • If you have any pre-existing conditions be upfront about them so that you know you are covered in case of an emergency