Is that a fare price? The true cost of travel insurance revealed

Today, financial comparison site Mozo has released its Travel Insurance Report for 2024, revealing Aussies could find cover for up to $167 cheaper than the average cost, by shopping around for a better deal.

“If you’re back at work and already planning your next holiday, you’re probably not thinking about travel insurance, but you should be,” warns Rachel Wastell, finance expert at Mozo..

"Choosing the right coverage isn’t the most thrilling part of planning a holiday, but Aussies could be leaving money on the table if they don’t shop around for the best deal.”

Mozo research shows that travel insurance costs have increased by 24% on average across essential, comprehensive, cruise and ski insurance policies in the past 12 months. 

Cruise travel insurance has increased the most (31.86%), ski travel insurance was the next biggest increase (25.85%), and comprehensive travel insurance came a close third, rising by 23.23%. Even essential travel insurance, which had the smallest cost increase, increased by 14.81% year-on-year.

“It takes a significant amount of time to compare travel insurance policies, so as part of the Mozo Experts Choice Awards our team does the hard work for you.”

“Mozo has compared 81 travel insurance policies from 37 different providers to find the average prices for travel cover, and potential savings on offer, across a range of cover levels and for the most popular global travel destinations.”

Find cover for up to $167 cheaper than the average policy  

According to the Australian Bureau of Statistics, travel is ramping back up, with the number of residents returning from short-term trips increasing fivefold in the 2022-23 financial year. 

The latest travel figures confirm Indonesia, New Zealand and the USA are the top travel destinations for short-term travellers, with Indonesia accounting for 14% of all returns.

Mozo research found Australians travelling to these tourist hot-spots could cut upwards of $100 off the average cost of travel insurance by comparing policies.

“Depending on where Aussies are travelling to and the type of coverage needed, there are potentially hundreds of dollars in savings on offer for savvy spenders,” Wastell continued.

“As the cost of insurance continues to rise, it’s more important than ever for consumers to understand the power that lies in comparing before you buy.”

When looking at travel insurance for trips to the USA, Mozo found the biggest destination savings on offer, calculating a $232 difference in travel insurance cost for comparable policies. The average policy price was $376, the cheapest policy was $145, and the most expensive came in at a whopping $727.

Bali (Indonesia) also offered significant savings of $148 when comparing the average cost of $248 to the lowest-priced policy of $100. In New Zealand, Mozo found Aussies could pocket an extra $101 by shopping around, and switching from the average policy cost of $175 to the cheapest of $74.

Price differences were also substantial depending on the level of cover. For those travellers looking for basic holiday cover, comparing essential travel insurance plans could save Aussies $102, while those opting for comprehensive cover could save $152. 

Holiday makers setting sail on a cruise or hitting the slopes could also pocket impressive savings by comparing policies, totaling $147 and $167 respectively.

Travelling uninsured could be a “financial nightmare”

The research informing the report was conducted as part of the 10th annual Mozo Experts Choice Awards for Travel Insurance 2024. 

Experts analysed 81 international travel insurance policies from 37 different insurance companies, to award the insurers offering exceptional value and/or the highest quality coverage as this year’s winners.

“The analysis showed travel insurance costs less than $20 or less a day on average, which in the scheme of things isn’t much, and the average cost of essential cover is just $13 a day.”

“When you think about it, that’s less than the cost of a meal these days, and well worth it if something does go wrong on holiday.”

Insurers that did not reduce coverage for COVID-related reasons were scored higher by Mozo experts in the awards, as despite a decline in the number of cases, there are still thousands of active cases.

“As COVID cases decline, traveller confidence is rising, but it’s crucial holiday makers don’t ditch insurance altogether,” Wastell stresses.

“Although the Australian Government has no COVID-19 requirements in place for travellers entering and departing Australia at present, there are still over a hundred thousand cases being reported globally each week.”

“Being stuck overseas with COVID could easily turn into a financial nightmare if you’re uninsured, especially in the USA where medical costs are significantly higher.”

“Travellers dusting off their passports need to remember that it's the memories you want to last a lifetime when you return home, not the debt.”

3 key things to check when comparing travel insurance

Before you buy travel insurance, Mozo experts urge Australians to look at the list of items covered closely, to ensure you are getting the best coverage for you.

“Every travel insurance policy will give you a page of cover information, which can be difficult to interpret, and can often have a long list of items you’re covered for.”

“However, just because it’s a long list doesn’t mean you’re going to be covered for critical things like hospital stays or lost luggage.”

When comparing travel insurance policies, checking you have sufficient coverage for the key three - medical cover, cancellation cover and luggage cover - can help ensure you’re not overpaying for cover you may not need.”

Purchasing travel insurance as soon as you book your holiday is another way to help ensure you’re covered for cancellation from the purchase date.

“Buying travel cover as soon as you book means that if something goes wrong and you have to cancel your trip you’re not left out of pocket,” Wastell explains.

“If you’ve already sorted flights for your mid-year trip to the US or Europe, buying insurance now can help cover you if something goes wrong before you leave.”