This is something that I have been asked a million times! Okay, maybe not a million times but often enough that I thought I should investigate it a bit deeper.
Can you afford not to have travel insurance?
First, lets look at the financial aspects. Really think about it. Can you afford not to have travel insurance?
For example – you are going on a trip and it cost you $98.00, can you afford it. I mean, if something happened and you don’t get to go. Can you afford to lose that $98.00? Probably, yes. So, in that instance I would suggest that you don’t need travel insurance.
But what about if you’re going on a cruise? You’ve just shelled out $4000.00 for a European cruise and its non-refundable. Can you afford to lose that? If the answer is no then in that instance I would say yes, you probably should think about getting insurance.
So now let’s think about your health. You know, the medical aspect. Could you afford it if something happened to you or your loved ones while you were on holiday?
Health Insurance – Domestic Travel versus International Travel
Travelling within your own country, or domestic travel, you should be covered by your own health insurance. So, if something unfortunate happened and you needed medical treatment, optical or dental, more than likely your own medical insurance would cover it. If you don’t have private medical insurance you may be covered by your country’s national health scheme, such as Medicare in Australia.
However, if you travel internationally, your private health insurance, or your country’s health insurance such as Medicare does not normally cover you for accidents or incidents that happen overseas. So, if something happened and you needed medical treatment, that would be an immediate, out-of-pocket expense.
Can you afford to cover these expenses?
Or worst-case scenario, what if you or a loved one died? If you died while you were overseas could your family afford to bring you back home for a proper burial, or cremation, or funeral service? If you answered no, then I would suggest that travel insurance is a necessity.
What is covered by travel Insurance?
There are so many different kinds of insurance you can get, something for every budget. Starting from as little as a $1 a day to fully comprehensive there are literally thousands of different insurance companies out there, of which I have tried several. The cost also varies dependent of where you travel to, the duration of your trip and the age of the intended travellers.
So, let’s look at the basics –
• Cancellation – if your trip is cancelled for any reason (but not if you decide you just don’t want to go anymore)
• Medical emergencies
Comprehensive Insurance normally covers a much wider range of situations such as –
• Repatriation – If there was a tragedy and you died overseas this will cover the cost to fly your remains home and cover the funeral expenses.
. Lost or stolen documents or money.
• Lost or stolen Luggage – Now that might not seem like a big deal, especially if you only have carry on luggage. But what if you’re heading to Europe for 6 weeks and you’ve got a huge case full of clothes and other important belongings, maybe some duty-free, all the stuff that you need to take but can’t carry on the plane. All of this will be covered.
• Cancellation for any reason – your flight, your accommodation, if your grandma dies and you can’t go. If there’s a huge storm and you can’t fly home. Anything at all. You will be reimbursed for the full cost. If you do have to extend your stay for any reason, please remember to keep your receipts. You will need to provide proof of any additional expenditure that was caused by your delay. You can’t just say it cost you this much for accommodation, food, clothing etc. You will be required to provide evidence.
• Legal Liability – most cover is from $5 million up to a staggering $20 million depending on the insurance company and what insurance you purchase (this will not however cover you for doing something illegal!)
• Riding a motorbike or scooter, snow sports, jet skiing and water sports are standard with some companies or available as an extra with most.
Extras and Add Ons
Some things not normally covered can often be purchased – for a price!
• Pre-existing medical conditions – If you don’t tell them about a pre-existing medical condition when you purchase your insurance, and something happens, more than likely you will not be covered, regardless of whether you purchased insurance or not. Whereas if you have declared the illness or condition it may be one of the ones that are covered, with full disclosure. If it is not one of the ones that are covered you may still be able to cover it, for an additional premium. So, the smart thing would be full disclosure. If you have a chronic illness or pre-existing condition that you are fully aware of (and your medical history could testify to) please declare it.
• Extreme Sports – Insurance for Scuba Diving, Hang Gliding and Bungee Jumping may be available for an additional premium from some companies.
Things that aren’t normally covered by travel insurance
Whenever you enter into a contract for travel insurance you get a full product disclosure document. This clearly defines everything that will be covered under the terms of the insurance.
It also clearly states what will not be covered, which may include –
• Doing anything illegal especially in the Middle East or Asia – just don’t even go there! This can catch a few people out not because they are bad people but because they do not make themselves aware of the laws of the country they are in. Just because its legal back home does not automatically make it legal elsewhere.
• High risk countries or No-Go Zones – At the moment the No Go Zones or Do Not Travel list for Australia includes Syria, Iraq and the Democratic Republic of the Congo. This information is freely available for your own country.
• Extending your stay – unless it is due to circumstances beyond your control. You can’t choose to stay a bit longer and expect your insurance to cover it (you can however extend most policies).
• Any incident that occurs after or due to the consumption of alcohol.
• Natural disasters – this is a tricky one because you can actually be covered for this if you take out your insurance prior to the event, or knowledge of the event. In the case of the Mt Agung volcano ash cloud for instance. If you had taken out insurance for your Bali holiday prior to this event happening, then you would be covered. But you couldn’t book a holiday to Bali and then suddenly think, oh I’d better get insurance because of that stupid ash cloud get insurance while this was occurring, then claim on the insurance if something happened because of it. You wouldn’t be covered because you were fully aware of it and it had already happened.
• If you don’t report it to local police – if an incident, accident or theft occurs, please report it to the local authorities. This is consistent with the requirements of most car or household insurances back home. If you have an accident in your car, or a break in at your home, you must report it to police and you will then get an incident number that your insurance company requires when you lodge a claim. The same applies to travel insurance.
• Unattended items –So if you leave all your belongings on the beach and you go in for a quick dip only to find that someone has taken off with all your stuff, depending on your insurance company these may not be covered.
• Hazardous Pursuits – Driving or motorbike riding an uninsured vehicle and rock climbing
are things that I don’t think are covered by most travel insurance companies.
Make an informed decision
Now that you know a little more about it you can make an informed decision on whether Travel Insurance is right for you based on your requirements.
Remember, always read the fine print and the product disclosure information before you sign anything.