Don’t fall for the add on travel insurance trap

You know that moment when you book a flight and the airline pops up a million add-ons including the option to buy travel insurance. Compared to the price you’ve just paid for the flight, the travel insurance seems kind of reasonable. But a mystery shop by Mozo reveals that airline insurance is one of the most expensive options for purchasing travel insurance and simply not worth the extra cost for the convenience.

Here’s how airline insurance compared with some of the online travel insurance policies available via Mozo’s travel insurance comparison engine.

Scenario 1: 10-day family holiday to Bali: Saving $219*

We looked at travel insurance options for a 10-day trip to Bali for a family of four, with 2 kids under 10 years. Travel insurance with Jetstar cost $316 while the cheapest comprehensive policy cost just $97 with American Express Travel Insurance. That’s a saving of $219 or a day at the Waterbom Bali waterpark for the whole family.

What’s more, while the airline’s insurance gives you a cover of $1,000,000 for medical and $2,500 for luggage and personal effects, American Express offers unlimited medical cover and $15,000 for luggage.

Scenario 2: 7-day Bangkok adventure for a couple: Saving $33*

For our second scenario, we looked for travel insurance policies for a couple in their thirties travelling to Bangkok for a week. Our search showed that travel insurance for the trip with Tigerair cost $108.88 and includes a cover of $500,000 for medical and $10,000 for cancellation. A medium level standalone policy with Fastcover on the other hand, costs JUST $75.10 and offers unlimited medical and cancellation cover.

In addition to the cost savings that can be made by shopping around for your insurance, the Mozo Mystery Shop also showed just how important it is to compare the finer details of each policy to ensure that you’ve got the right level of cover for your needs.

Tips for being claims ready

Having travel insurance gives you peace of mind that if something does happen on your holiday, you’ll be covered and will be able to get the treatment you need and recoup some of your losses. But before you step foot on the plane, it’s important to know what to do in case you need to make a claim as you don’t want to find yourself back in Australia only to realise that you need an official police report from the district in Bangkok you were staying in.

Here are our top tips for being claims ready:

1. Read the fine print: This may be the oldest rule in the book, but that’s because it’s the most important! Many travellers get their claims rejected or delayed for not bothering to read through the inclusions and exclusions of their policy prior to going overseas. So make sure that doesn’t happen to you. You need to know before going bungee jumping if you’ll be covered not afterwards when you’re laid up in hospital with a broken leg.

2. Be honest: Be upfront with your travel insurance provider about any pre-existing medical conditions like a heart condition or pregnancy so you know exactly what you’re covered for while you’re away. Read our detailed guide to pre-existing conditions for more information.

3. Keep receipts: If you’re carrying any expensive items with you, keep receipts or take photographs of your belongings before you leave so you can prove that you had those items in case they are lost or stolen. Similarly, if you buy anything new during the trip, save your receipts as you may need them later. A good idea is to take a pic of the receipt with your phone and email it to yourself as a backup.

4. Report a situation: In the case of theft or loss, you’ll need to report it to the local police or relevant authorities within 24 hours. Keep a copy of the report to submit along with your claim application. Similarly, if you face a medical situation, keep the doctor’s invoice and other bills to submit later.

5. File your completed claim as soon as possible: Most providers need you to submit your claim within a month of returning from your holiday. So even if you’ve reported the matter over the phone, that’s not enough. Cover all bases by downloading and completing the application from the insurance provider's website and submit your claim as soon as you can.

*Given that travel bookings and insurance costs can vary depending on a number of factors such as your destination, time of booking, etc, the prices and savings mentioned here are subject to change.