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What is holiday travel insurance?

Holiday travel insurance is essentially a helping financial hand for unpredictable mishaps which could occur while you’re on holiday. 

If your claim is accepted by your insurance provider, holiday insurance can swoop in to help cover some unforeseeable costs. Depending on the kind of policy you take out and the situation you’re claiming for, it could be to cover non-refundable cancellation costs, emergency medical care and lost or damaged luggage.

There are some events or scenarios which won’t be included on your insurance – more on that later – and you’ll need to specify exactly what you want covered by your policy when you take it out. This includes coverage for the destinations you’ll be travelling to, any specific items (like phones, laptops or cameras) you want insured while you’re travelling, and certain activities (like skiing or scuba diving) you might participate in during your holiday.

You’ll need to organise and pay for insurance before your trip, and there’s usually an excess you’ll have to pay (often between $50 and $300) before your coverage kicks in when you make a claim.

Here, we’re going to look at how holiday insurance works for international travellers. If you’re after holiday insurance for a trip in Australia, check out our guide to domestic travel insurance for answers to FAQs and policy options. Global explorers, read on… 

What does holiday travel insurance cover?

What’s included in holiday travel insurance can differ between policies, and each event or item will usually have a set cap on what the insurance company will pay out if you make a claim in these categories (and overall). The options below are some of the more common coverage points you’ll see in a holiday travel insurance policy, but this isn’t an exhaustive list. 

• Luggage and personal belongings

If your luggage is lost in transit, most policies will cover you for essential purchases like clothes and toiletries to use while you retrieve your belongings. If your travel items (including credit cards and a set amount of cash) are stolen or damaged, insurance can usually be used to cover the cost of replacing or repairing these, so long as it’s within the sub-limits for specific items laid out in your policy. 

• Cancellation and delays

This usually refers to non-refundable travel, accommodation and activities you’ve already paid for or put a deposit on. You’ll only be granted a claim if the circumstances which delayed you or caused you to cancel your trip were unforeseeable, like if a natural disaster or conflict occurs, if you are injured or fall ill, or if a relative unexpectedly dies or is hospitalised. 

• Medical and dental

This often includes costs related to emergency medical transportation and care, emergency dental treatment, and resuming your journey after these events (which could involve things like booking new flights or accommodation).

Holiday travel insurance is also there to help you prepare for unthinkable events that may cause you to become permanently disable or even die while on holiday. It can provide compensation if you’re permanently disable while travelling, cover the often exorbitant cost of bringing home your remains, and even reimburse some of your income if injuries prevent you from working once you get home.

• Personal liability

If you’re the one responsible for accidentally causing damage to other people’s property or injuring them, holiday insurance may provide some cover. It can help cover legal costs in case you get sued, as well as compensation claims settled outside the courts. But if it’s proven you caused damages on purpose, your insurance provider won’t have to cover these charges.

• Optional extras

You’ll usually find a trove of extra coverage types to include in your policy so all the activities on your itinerary are insured, as well as options for increasing sub-limits on certain items or events. Optional extras usually come with a premium increase when added. A few common extras include specialised cruise cover (for on and off-board events), packages for snow sports and other extreme adventures, and rental car excess reduction. 

Why might my holiday travel insurance claim get rejected?

If something unexpected does happen and you need to make a claim on your holiday travel insurance, it helps to know what can void your cover. Firstly, you’ll want to read the terms and conditions of your policy carefully and make sure you follow the instructions and procedures listed by your provider for making a claim. 

So you know what not to do, here are some common mistakes that can result in a rejected holiday insurance claim:

Leaving baggage unattended: One of the most common claims travellers make is related to loss of baggage or personal belongings. But what a lot of people don’t realise is that insurance companies won’t reimburse you for luggage left unattended. For instance, if you forgot your purse in a cab, in all likelihood, your provider would refuse to pay you for it. Even luggage that is left in a hotel concierge after check-out is generally considered unattended. Make sure you understand the meaning of ‘unattended’ as your insurance provider defines it.

Not mentioning pre-existing conditions: You must be completely honest with your provider about any pre-existing medical conditions when buying a holiday insurance policy. Depending on the conditions you have, there could be some rules you need to follow. In some cases you might need to provide a doctor’s certificate about your health and suitability to travel, take precautionary vaccinations, or pay an extra premium. Not disclosing pre-existing conditions could result in the insurance company rejecting your claim later.

Using alcohol or drugs: While no one is demanding you go on a dry holiday, if you get injured or into other costly situations and are found to be under the influence of drugs or alcohol, your insurance provider could reject your claim. This is especially important when you are participating in adventure activities or extreme sports.

Driving any vehicle without the appropriate licence: Most standard policies cover you for injuries and personal liability, the latter including damages to property or injuries you cause others. But if you hurt yourself or someone else while driving a vehicle you are not licenced to drive, your holiday insurance provider can decline your claim. For example, if you have an accident while driving a motor scooter in Bali which you do not have a licence for, your provider may not reimburse you for damages.

Not providing adequate proof: You need to provide evidence of exactly what went wrong to successfully claim on holiday travel insurance. For example, if you need medical care, you would need to save the doctor’s bills and medicine receipts. Or, if you lose your baggage, you will have to prove you actually owned the things that you claim are missing. You might have an invoice or manuals you can submit as proof, but photographs with you and the items may also suffice. In the case of a theft, you would also be required to file a police report within 24 hours and ideally also inform your provider.

Who needs holiday travel insurance?

Every traveller needs holiday insurance. Whether you like spontaneous holidays or well planned itineraries, there are always some circumstances that are out of your control. Anybody could experience a natural disaster or medical emergency that derails their holiday plans. However, different kinds of holidays could require different variations on insurance. 

So, we’ve listed a variety of holidaymakers and the features they should be looking for in their insurance:

Couples

It’s always fun to try new things and see new places as a couple, but you want a holiday insurance policy to match your activities. If you are about to enter parenthood and want to splurge on a babymoon, you should definitely think about getting a policy that covers your pregnancy. Most insurance companies cover pregnancy up to the end of the second trimester or till around the 27th week.

Mozo Tip: Travel insurance providers consider pregnancy as a pre-existing condition and you must mention it before you buy a policy, and be aware of any exclusions. For instance, you might have to pay an extra premium or even not be able to get coverage if you've had past complications or conceived through assisted reproductive services.

Families

The good news for families is most travel insurance companies don’t charge extra fees for children (generally up to 18 years of age) travelling with their parents. So depending on whether you make one international family trip in a year or travel multiple times annually, you can choose between a single family policy or multi-trip insurance for you and your brood. 

Mozo Tip: Make sure you add the complete details for all travellers, including the kids, while buying the policy.

Backpackers

When you are backpacking across the world, you may not be sure where you’re headed each morning. While this might make for a thrilling trip, it’s essential you check all the activities and destinations you might explore are covered by your holiday insurance. You could be backpacking for a long duration and might not want to carry too much cash or foreign currency. So, make sure you’re covered for things like medical care, lost baggage or adventure activities you plan to try to avoid major bills that could grind your trip to a halt.

Mozo Tip: Even if you’ve booked extended insurance for a longer holiday, there might be restrictions if you take a short break to visit home and then resume your expedition. Talk to your insurance provider about this possibility if you think this kind of situation may arise.

Seniors

When you are in your golden years, you can really take time to explore the world. But keep in mind holiday insurance premiums generally increase as your age bracket goes up. This is because older travellers are more likely to make claims which are often more costly to insurance providers (because let’s face it, you’ve actually got nice luggage now). There’s also an increased chance that you’ve developed health conditions, which in turn adds risk to your insurance customer profile and can increase premiums.

Mozo Tip: While an increasing number of Australian insurance providers are raising the age limit on seniors travel insurance policies, you must take a careful look at any exclusions that might apply to you. For instance, while asthma is a pre-existing condition that’s covered by most providers, it may not be covered if you are over 65.

Adventurers

Do you enjoy regular adrenaline infusions? It’s important to cover any high-impact sports or adventure activities you’re planning on trying during your holiday, as some might not be included automatically. For example, if you are going skiing you’d likely have to include a specific ski insurance option in your policy to make sure you are covered for any emergencies or loss of ski equipment.

Mozo Tip: If you make a claim connected to a sport or adventure activity and it’s found you were under the influence of alcohol or drugs when the incident occurred, the provider can reject your claim. Generally, this is the case for most events involving drugs or alcohol.