How to read the travel insurance PDS (product disclosure statement)

No matter where you’re jet-setting, be it domestic or abroad, travel insurance can give you peace of mind so when the unexpected happens, you’re covered. But what exactly are you covered for? That’s where the product disclosure agreement (PDS) comes into play. 

Knowing how to read and understand these terms and conditions is vital pre-trip prep, so without further ado, here’s everything you need to know about the PDS.

The product disclosure statement (PDS) lays out terms and conditions of your insurance policy, including what you’re covered for (inclusions) and what you’re not (exclusions). By reading the PDS, you should get an idea of how much coverage the policy offers and whether it's enough to protect you. 

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The level of coverage you need from travel insurance will depend on where you're going on holiday, how long you'll be staying, and what risks may apply to your circumstances. This can be health risks like preexisting conditions or any extreme activities you'll be doing, like snow sports.

Firstly, check what type of policy you have. This includes single trip, multi-trip, international, and domestic.

This is different from the level of coverage, which usually comes in three tiers: basic, essentials, and comprehensive. 

• Basic coverage will usually only cover personal liability and medical emergencies. 

• Essential cover includes personal liability, medical emergencies, theft/loss/damage to your belongings, and flight delays/cancellations. 

• Comprehensive covers includes all of the above and more, and usually is the most thorough travel insurance available from a provider. This level typically offers additional add-ons, such as extreme sports, certain preexisting conditions, and so forth. 

Once you’ve found the type of policy and general level of cover that suits your circumstances, it’s time to read the fine print.

After you’ve checked that you're eligible for cover, it’s time to figure out what’s not covered in your policy. Exclusions outline which events, activities, or situations your travel insurance provider cover. These generally include:

• Not following official travel advice or warnings. Providers usually won’t cover trips to destinations that Smartraveller lists as either “Reconsider your need for travel” or “Do not travel”. These are usually highly dangerous areas and thus too much of a risk. Make sure you confirm official advice before you book. You can check out our guide on the safest travel destinations if you're looking for less risky options.

• Illegal activities. If it’s against the law and you try to file a claim, you’ll likely be denied. This can include something as simple as speeding in your rental car.

• Acting recklessly. Negligence is generally an insurance no-go. This includes anything that happens while you’re under the influence of alcohol/drugs, undertaking extreme activities without an instructor (such as diving), or leaving belongings unattended. 

In a nutshell, your insurance provider expects you to be aware of your situation and mitigate risk/liability as much as possible. For example, if a volcano erupts near Bali but you book the trip anyway, your insurance provider won’t reimburse you if your flights get cancelled. However, if you purchase your tickets/policy before the volcano erupts, you’re covered. Phew. 

There are some sneaky exclusions to keep an eye out for, too. While most policies offer emergency medical coverage, make sure it’s adequate for any preexisting conditions that you or anyone on your policy might have. Always declare any preexisting conditions to your provider. If you don’t, you may not get reimbursed if you experience a medical emergency related to your condition while travelling. 

Some preexisting conditions, like mild asthma/allergies, sensory impairments, or physical/cognitive disabilities, usually come included in your policy at no extra charge. Pregnancy cover is variable and often highly dependent how far along you are, and unfortunately, most insurances won’t cover mental illness. If you’re unsure if you’re covered, check the PDS or contact the insurance provider.

Most insurance providers have adjusted their official policies to a post-pandemic world, so coverage for emergency expenses relating to treating COVID-19 has expanded. However, not every policy offers coverage, making it crucial to read the PDS before purchasing a policy.

Usually, if you contract COVID-19 or a border unexpectedly closes while you’re travelling, your policy should cover any related quarantine, cancellation, or medical costs. However, these are riddled with exclusions. Some policies stipulate that they won’t reimburse cancellation costs if you buy your policy within 21 days of your trip and then contract COVID-19. Other policies won’t cover pandemic related costs at all.

Despite this, many countries now mandate that you must have a travel insurance policy in place before you arrive, usually at least covering any emergency medical costs associated with treating COVID-19. 

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This is particularly important if you’re planning on travelling to a country that does not have a reciprocal healthcare agreement with Australia. A reciprocal healthcare agreement basically means that citizens of either country can access necessary healthcare services in an emergency situation. 

Currently, Australia has a reciprocal healthcare agreement with 11 countries:

• Belgium
  
• Finland
  
• Italy
  
• Malta
  
• the Netherlands
  
• New Zealand
  
• Norway
  
• the Republic of Ireland
  
• Slovenia
  
• Sweden
  
• The United Kingdom.

Keep in mind you may still have to pay for treatment, so the agreement should not be viewed as a replacement for travel insurance.

If your PDS doesn’t have appropriate levels of cover for coronavirus, you may not be able to enter certain countries at all. Always check the destination country’s border entry requirements so that you understand what travel documentation is required and what rules you need to follow.

The PDS is usually linked on the insurance provider’s website. Check quick-links or keyword search “product disclosure statement” once you’re in. The PDS will also most likely be emailed to you once you’ve purchased a policy. 

If you’re in-store, a travel agent/broker will provide a copy of the PDS.

No one travel insurance policy is the best, because coverage varies wildly between travellers and trips. There are a range of covers available for every holiday, so it's all about finding what coverage is right for you.

A great value travel insurance policy could help cover:

• Medical costs (emergency expenses, preexisting conditions, etc.).

• Cancellations or delays.

• Additional expenses (rental car excess/liability, extreme activities like backpacking and snow sports, special cover for cruises, etc.).

• Theft, loss, or damage to your personal belongings and effects (there are sometimes special add-ons for smartphones and other expensive items).

Match what your policy does/doesn’t cover and compare to your circumstances. If you’d like extra coverage, you may need to purchase additional cover. 

Your travel insurance provider should have ways for you to get in contact if you require additional help or clarification with understanding your policy, including while you're overseas with an international web chat/hotline.

For more inspiration, check out our guide to the pros and cons of cheap travel insurance.

Looking for travel insurance? Compare international policies below and test your amazing new PDS-comprehension skills.